Form 8859: The DC First-Time Homebuyer Credit Carryforward
Published November 5, 2026
Form 8859 is the District of Columbia first-time homebuyer credit carryforward form. The 2025 version is used for one thing: to claim the unused part of the credit carried forward from your 2024 Form 8859. You cannot start a new DC homebuyer credit on this form. IRS: Form 8859 (2025)
What the original credit was
The credit was the smaller of $5,000, or $2,500 if married filing separately, or the cost of the home. The credit began to phase out when modified adjusted gross income was above $70,000 ($110,000 if married filing jointly). No credit was allowed when modified AGI was $90,000 or more ($130,000 or more if married filing jointly). These are the limits that applied to the original claim. IRS: Form 8859, General Instructions
The lines you fill in
- Line 1: the credit carryforward from 2024. Copy line 4 of your 2024 Form 8859.
- Line 2: the tax liability limit. Use the Tax Liability Limit Worksheet in the instructions.
- Line 3: the current-year credit. This is the smaller of line 1 or line 2. Include it on Schedule 3 (Form 1040), line 6h.
- Line 4: the carryforward to 2026. Subtract line 3 from line 1.
The tax liability limit
The worksheet on line 2 starts with your 2025 tax before credits. It then subtracts the other credits you claim on your 2025 return, including the ones listed in the form's instructions. This is why a carryforward is sometimes only partly used in a year. The limit is what decides how much you can use.
Keep your records
Keep your 2024 Form 8859 and your home purchase records with your tax records. You need the 2024 line 4 number to start this form. Line 4 carries the unused part forward to 2026, as the form shows.
Related reading
If you file separately, read Married filing jointly or separately before you finish line 2. Filing status changes the income limits.
Who needs this form
You need Form 8859 only if you have a carryforward from your 2024 Form 8859, line 4. If you had no carryforward, this form does not apply to your 2025 return. The form does not start a new credit, and the instructions say you may claim only a carryforward of unused credit.
Filing separately
The original credit limit was $2,500 if you filed separately, instead of $5,000. The original income limits were $70,000, or $110,000 if married filing jointly. If you file separately in 2025, check the instructions for the 2024 form before you rely on any number.
What the tax liability limit includes
The worksheet for line 2 lists credits you take on your 2025 return. The list in the instructions includes the foreign tax credit, the child and dependent care credit, the education credits, the retirement contributions credit, and the clean vehicle credits. Add up the items that apply to you, then follow the worksheet steps in order.
Where the current-year amount goes
Line 3 is the amount you carry onto Schedule 3 (Form 1040), line 6h. Line 4 is the amount that moves forward to 2026. Keep both numbers so the 2026 return can start from the correct line 1.
Before you start line 1
Pull your 2024 Form 8859 and find line 4. Confirm that the amount is the unused carryforward and not the original credit. Also gather your 2025 tax return draft, because line 2 depends on your 2025 tax. Doing these steps first keeps the worksheet from being redone.
Keep a copy of the worksheet
Keep a copy of the completed worksheet with your 2025 return. If the 2026 return asks where the carryforward came from, the worksheet and your 2024 Form 8859 will show it. Write the amounts you used on each line so the next year starts from the right number.
General information, not advice about your situation.
Sources: Sources: IRS, Form 8859 (2025), Carryforward of the District of Columbia First-Time Homebuyer Credit (https://www.irs.gov/pub/irs-pdf/f8859.pdf) This is general information, not advice about your specific return.
