Form 5405 - 2024

Form 5405: Repaying the 2008 first-time homebuyer credit

What is Form 5405 used for?

Form 5405 is the IRS form for the Repayment of the First-Time Homebuyer Credit. It has one main job now: to notify the IRS that a home you bought in 2008, and claimed the credit for, was sold or stopped being your main home, and to figure how much of the credit you must repay.

The form is no longer used to claim any credit. It exists solely to handle repayment of the original 2008 credit, which worked like an interest-free loan of up to $7,500 repaid over 15 years.

Who needs to file Form 5405?

Only people tied to the 2008 version of the credit ever need this form. If you bought in 2009 or 2010, the repayment requirement has expired and the form almost certainly does not apply to you.

You needed to file Form 5405 with your return if you claimed the 2008 credit and, during that tax year, one of these happened:

• You sold the home, including through foreclosure.
• You stopped using it as your main home.
• You converted the entire home to rental or business use.
• The home was destroyed, condemned, or transferred in a divorce.

How the 2008 first-time homebuyer credit repayment works

The 2008 credit was not free money. Taxpayers who claimed it agreed to pay it back in 15 equal annual installments, starting with the 2010 tax return.

For a full $7,500 credit, the minimum installment is $500 per year. Married couples who claimed the credit jointly repay $250 each. Repayment is reported as additional tax, which reduces your refund or increases your balance due for that year.

When you don't need to file Form 5405

Most people repaying the 2008 credit never had to attach this form at all. If you owned the home and used it as your main home for the full year, no triggering event occurred, so the form is not required.

In that situation, you simply report the annual installment directly on your return instead:

• Enter the repayment amount on Schedule 2 (Form 1040), line 10.
• Label it as the First-Time Homebuyer Credit repayment.
• Keep your original purchase records to confirm the credit and balance.

Exceptions that can reduce or eliminate repayment

Certain events let you stop repaying or limit what you owe, even if you no longer live in the home. These exceptions can save real money, so it is worth checking whether one applies before assuming you owe the full balance.

Common exceptions include:

• Sale at a loss to an unrelated buyer: Repayment is limited to your gain, so no gain means nothing to repay.
• Death of the person who claimed the credit: The remaining balance is generally forgiven, unless it was a joint return.
• Divorce transfer: The spouse who receives the home takes over the repayment.
• Military service: Members of the uniformed services, Foreign Service, or intelligence community on qualified official extended duty may owe nothing.

What happened to Form 5405?

This is the question most searchers now have, and the answer is straightforward. The 15-year repayment period for homes purchased in 2008 began with the 2010 tax return and ended with the 2024 tax return.

Because that schedule is complete, the IRS confirmed that Form 5405 will no longer be revised, and the 2024 version is the final one. For anyone who bought in 2008, kept the home, and made every installment, the 2024 return carried the last payment.

The form can still matter in a few narrow cases. You might need it if you are amending a prior-year return, reconciling a balance the IRS says is still open, or reporting a late-triggering event on a 2008 home. To confirm your exact balance and installment history, use the IRS First-Time Homebuyer Credit account look-up tool.

Where to file Form 5405

Form 5405 is not filed on its own. You attach it to your Form 1040 and file it the same way you file your full tax return, whether electronically or by mail.

If you mail a paper return, the address depends on your state and whether you are including a payment. Always use the current mailing address listed in the Form 1040 instructions for your state, since these addresses change and sending your return to the wrong service center can delay processing.

Need to file Form 5405? Our free fillable Form 5405 template lets you complete every part of the form online, fill in your credit details and repayment amounts, and download a clean, print-ready copy to attach to your return. There is no software to install and no account required. Try it today for free.