Question regarding Alabama first time and second chance home buyer savings account

Forum|Forum|5 years ago
May 13, 2020
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VictoriaD75

What is your question? Per the website:

First-time homebuyers can now create a tax-free savings account to be used towards the purchase of their first home. This new resource in Alabama is exclusively for first-time buyers or those reentering the housing market if you haven’t owned a home in the last 10 years.

Individuals or couples can open one of these tax-free savings accounts at any local bank, credit union or other financial institution in Alabama. The principal deposits and earnings will be deductible on your state income taxes. Savings from the account can be used to pay for the down payment and/or closing costs for the purchase of a single-family dwelling.

Alabama Association of Realtors

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cecegrin

I never opened one but my return says I did. What should I do?

AmyC

Employee

I am assuming that your return is showing a deduction for saving the money rather than a penalty for cashing it out. Follow these steps:

Open your return
Edit AL
continue through to You've Finished Your Alabama Return
Select Income to update/ revisit
continue through until you reach First Time Second Chance Homebuyer Accounts
Select Yes
Make any corrections necessary

@cecegrin

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millerte

I am having the same issue. I go to complete my Alabama tax return and it finds an error on Schedule HBC - first time second chance and asks for me to put in my institution. I never put any information on this and never used this - however, it seems to have pulled in my interest from my 1098 from one of my banks which it completely unrelated. The box is checked next to "I am claiming a Alabama contribution, interest earned, and/or withdraw for this year", yet I never stated I was claiming anything.

"This schedule is required to be submitted with Form 40 if claiming a deduction for deposits made into any

First Time and Second Chance Home Buyer Savings Account or if excluding any interest earned on the

account. Any deduction or exclusion for deposits or interest is limited to the account holders only. Failure

to include this form with your return will result in an automatic denial of the deduction or exclusion.

? XI am claiming a Alabama contribution, interest earned, and/or withdraw for this year

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