E-FILE REJECT DUE TO FIRST TIME HOME BUYER REPAYMENT

[Tax Prep by Deb]

I just had a return reject because I included on the return the 500 repayment amount for the first time home buyer credit for a home purchased in 2008. We paid the 500 last year, however when I try to include the 500 this year it is rejecting with an error code MEFFDF1040-394 Form 1040 line 59b first time home buyer repayment amount must not be greater than the first time homebuyer credit amount in the e-file data base.

Any idea's?

Thanks,

Deb

[Jack from Ohio]

Look it up!!

http://www.irs.gov/individuals/article/0,,id=252351,00.html?portlet=105

[Tax Prep by Deb]

I had already tried that, however it says it can't give me any information.

Deb!

[Jack from Ohio]

I had already tried that, however it says it can't give me any information.

Deb!

Did he give you the letter he received from the IRS? It will have the information you need to make it match. The total amount borrowed is probably what is not matching.

[Tax Prep by Deb]

Did he give you the letter he received from the IRS? It will have the information you need to make it match. The total amount borrowed is probably what is not matching.

She received a letter last year, however I haven't seen any letters for any of the paybacks. Has anyone else seen letters this year?

[grandmabee]

they are not sending letters this year. Was it a joint return when credit received?

[grandmabee]

did you use the form 5405? if so you should not. this year hop from line on page 2 of 1040 and imput the 500 there? only use 5405 if sold or not in home now

[Tax Prep by Deb]

Thanks to all who chimed in.

I had a strong suspicion about this particular client. Turns out she received a letter denying her the loan and asking for the repayment immediately. ( I had already told her that she did not qualify for the 7500 because she purchased her home a few days before the start date) I had even prepared and sent her an ammended return to file and pay the money back, however she chose to ignore it. She just informed me this afternoon that last year they kept her refund and that was what she expected this year. Which is fine, however I cannot file the return without putting the correct repayment figure, so she is calling to try and get that for me.

As to using the 5405, I knew that normally it wasn't required and so it was not a part of this return originally. So I will wait until I hear back from her, but my gut feeling is that we will have to paper file this one.

Thanks again to all who chimmed in!

Deb!