What is Form 8859?
Form 8859 is a tax form designed for first-time homebuyers in the District of Columbia seeking to claim a carryforward of the first-time homebuyer credit. This form allows you to apply any unused credit from prior years if you were unable to claim it because of income restrictions. By completing this form, you can benefit from the credit—potentially up to $5,000—in future years when your income may be lower, ensuring you don’t miss out on valuable savings.
What is Form 8859 used for?
Form 8859 is important for first-time homebuyers in the District of Columbia. Here's what it helps with:
- Claiming Carryforward Credit: To claim any unused credit from previous years.
- Calculating Limitations: To determine limits based on your tax liability.
- Current-Year Credit: To report the smaller of the carryforward credit or your tax limitation.
- Carrying Forward Unused Credit: To carry forward any unused credit to future years.
How to fill out Form 8859?
- 1
Enter the carryforward credit amount from the previous year on line 1.
- 2
Calculate your tax liability limit using the Tax Liability Limit Worksheet and enter it on line 2.
- 3
Determine your current year credit by entering the smaller value of line 1 or line 2 on line 3.
- 4
Subtract line 3 from line 1 to find the amount to carry forward to next year.
- 5
Attach the current year credit amount to Schedule 3 (Form 1040), line 6h.
Who is required to fill out Form 8859?
First-time homebuyers in the District of Columbia are responsible for completing Form 8859. They must do so if they have unused credits from prior years that they need to carry forward.
These homebuyers use the form to report carryforward amounts and determine their current year’s allowable credit, ultimately reducing their tax liability.
When is Form 8859 not required?
You don’t need to file Form 8859 if you have already claimed the full District of Columbia first-time homebuyer credit in prior years. Additionally, if your adjusted gross income exceeds $90,000 for single filers or $130,000 for married couples filing jointly, you cannot claim the credit, making Form 8859 unnecessary.
When is Form 8859 due?
The deadline for Form 8859 is the same as your tax return, typically April 15th each year. You should attach it to your Form 1040, 1040-SR, or 1040-NR when filing. If you have any unused credit from previous years, you can carry it forward if income limitations prevented you from using it.
How to get a blank Form 8859?
To access a blank Form 8859, Carryforward of District of Columbia First-Time Homebuyer Credit, simply visit our website. The Internal Revenue Service (IRS) issues this form, and we have it pre-loaded in our editor for you to fill out. Remember, our platform aids in filling and downloading but not filing forms.
Do you need to sign Form 8859?
No, you do not need to sign Form 8859 as it is attached to your federal income tax return, such as Form 1040, 1040-SR, or 1040-NR. This form contains all the required information and calculations. However, it's wise to check for any updates to ensure compliance. Once you've filled out the form using PDF Guru, you can download it for your records and proceed with the submission process elsewhere.
Where to file Form 8859?
To submit Form 8859, attach it to your federal tax return. This could be Form 1040, 1040-SR, or 1040-NR, depending on your situation.
You can file your return online using tax software that supports this form, or you can mail it to the address listed for your state on the IRS website.
