TurboTax / Tax Calculators & Tips / All Tax Guides / General Tax Tips / Filing Tax Form 8936: Qualified Plug-in Electric Drive Motor Vehicle Credit

Filing Tax Form 8936: Qualified Plug-in Electric Drive Motor Vehicle Credit

Updated for Tax Year 2016


OVERVIEW

If you purchased a new vehicle that runs on electricity drawn from a plug-in rechargeable battery, you may be eligible to claim the qualified plug-in electric drive motor vehicle tax credit, which can reduce your tax bill. In order to take the credit, you must file IRS Form 8936 with your return and meet certain requirements.


Qualified plug-in vehicles

To qualify for the qualified plug-in electric drive motor vehicle tax credit your vehicle purchase must satisfy a number of criteria. First, only qualified vehicles you purchase after December 31, 2009 are eligible for the credit. Your plug-in electric vehicle must also be brand new, made by an eligible manufacturer under the Clean Air Act, have at least four wheels, be appropriate for driving on public streets and highways, and have a weight rating of less than 14,000 pounds. And most importantly, the vehicle must have an electric motor that uses a rechargeable battery to generate at least 4 kilowatt-hours of capacity. A listing of qualifying vehicles can be found at the IRS website: http://www.irs.gov/businesses/article/0,,id=219867,00.html.

Manufacturer's certification

The manufacturer of your qualified plug-in vehicle will provide you with a certification that your vehicle qualifies for the credit. The vehicle manufacturer’s certification will contain information on the make, model and year of your vehicle and which specific credit amount your vehicle qualifies for.

Be aware, however, that if the IRS publishes an official statement that certain vehicles no longer qualify for the credit, you cannot rely on subsequent certifications by the manufacturers of those vehicles. Also, the credit can phase out for specific manufacturers once they sell more than 200,000 of their plug-in electric vehicles. However, the IRS periodically posts information on its website listing the manufacturers that qualify for the credit and the production numbers for the qualifying models.

Form 8936 credit calculation

Form 8936 has three parts. Part I calculates your tentative credit amount, which, in many cases, the manufacturer will have provided with its certification. If the vehicle satisfies the at least the minimum requirements, the credit starts at $2,500 and goes to a maximum of $7,500.

After calculating your tentative credit in the first part of Form 8936, the remaining two parts allocate the credit between your business in Part II and personal use of the vehicle in Part III.

Tentative credit reduction

As a tax credit, the amount of your qualified plug-in electric drive motor vehicle tax credit reduces your tax bill on a dollar-for-dollar basis. In order to claim the credit, you have to have a tax liability you report on your return. It will not increase your refund beyond what is owed. Depending on your liability and other tax credits you take, you may not see the full tax savings of the tentative credit you calculate on Form 8936. This is because the credit is a nonrefundable credit. Nonrefundable tax credits cannot reduce your tax bill below zero and also reduce your tax bill for a number of other credits taken before reducing the remaining tax bill for your plug-in electric motor vehicle credit.

Get every deduction you deserve

TurboTax Deluxe searches more than 350 tax deductions and credits so you get your maximum refund, guaranteed.

For only $54.99$34.99*
Start for Free

Looking for more information?

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.


Security is built into everything we do
Here's how
* Important Offer Details and Disclosures
  • TURBOTAX ONLINE/MOBILE

  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Free 1040EZ/1040A + Free State offer only available with TurboTax Federal Free Edition; Offer may change or end at any time without notice. Actual prices are determined at the time of print or e-file and are subject to change without notice. Savings and price comparisons based on anticipated price increase expected in March. Special discount offers may not be valid for mobile in-app purchases.
  • QuickBooks Bonus Offer with TurboTax Self-Employed: File your 2016 federal return with TurboTax Self-Employed by 4/18/17 and receive a complimentary subscription to QuickBooks Self-Employed until 4/30/18 at no additional cost. After you file your taxes, you must activate your QuickBooks Self-Employed subscription by 7/15/2017 by logging into QuickBooks Self-Employed via mobile app or at https://selfemployed.intuit.com/login. Once activated, you will have access to QuickBooks Self-Employed until 4/30/2018.
    Offer valid only for new QuickBooks Self-Employed customers.
    • When you use TurboTax Self-Employed to file your 2017 taxes, you will have the option to renew your QuickBooks Self-Employed subscription. If you do not file with TurboTax Self-Employed by 4/30/2018, your QuickBooks Self-Employed subscription will automatically renew on 5/1/2018 for another year at the then-current annual subscription rate. You may cancel your subscription at any time from within the QuickBooks Self-Employed billing section.
  • Pays for itself: In order to pay for the price of TurboTax Self-Employed, you will need at least $600 in deductible business expenses. This calculation is based on the self-employment tax income rate for tax year 2016.
  • Anytime, anywhere: Internet access required; standard message and data rates apply to download and use mobile app.
  • Fastest refund possible: Fastest tax refund with e-file and direct deposit; tax refund time frames will vary.
  • Pay for TurboTax out of your federal refund: $X.XX Refund Processing Service fee applies to this payment method. Prices are subject to change without notice.
  • TurboTax Expert Help, Tax Advice and SmartLook: Included with Deluxe, Premier and Self-Employed (via phone or SmartLook); not included with Federal Free Edition. Feature availability varies by device. State tax advice is free. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2015 TurboTax products.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.
  • CompleteCheck: Covered under the TurboTax accurate calculations and maximum refund guarantees.
  • TurboTax Self-Employed Expense Finder: Available only in TurboTax Self-Employed. Not available for people with certain types of expenses and tax situations including paying contractors or employees, home office or vehicle actuals, inventory, self employed health insurance or retirement, asset depreciation, sale of property or vehicles, and farm income. Some financial institutions limit the timeframe for which historical transactions may be imported by ExpenseFinder. ExpenseFinder expected late January (late February for mobile app).
  • TURBOTAX CD/DOWNLOAD SOFTWARE

  • TurboTax CD/Download products: Price includes tax preparation and printing of federal tax returns and free federal e-file of up to 5 federal tax returns. Additional fees apply for e-filing state returns. E-file fees do not apply to New York state returns. Savings and price comparison based on anticipated price increase expected in March. Prices subject to change without notice.
  • Fastest refund possible: Fastest tax refund with e-file and direct deposit; tax refund time frames will vary.
  • Pay for TurboTax out of your federal refund: $X.XX Refund Processing Service fee applies to this payment method. Prices are subject to change without notice. This benefit is available with TurboTax Federal products except TurboTax Business.
  • About our TurboTax Product Experts: Customer service and product support vary by time of year.
  • About our credentialed tax experts: Live tax advice via phone is included with Premier and Home & Business; fees apply for Basic and Deluxe customers. State tax advice is free. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice. Not available for TurboTax Business customers.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2015 TurboTax products.
  • Data Import: Imports financial data from participating companies. Quicken and QuickBooks import not available with TurboTax installed on a Mac. Imports from Quicken (2015 and higher) and QuickBooks Desktop (2011 and higher); both Windows only. Quicken import not available for TurboTax Business. Quicken products provided by Quicken Inc., Quicken import subject to change.