Form 8396 Mortgage Interest Credit

Form

8396

Mortgage Interest Credit

OMB No. 1545-0074

2009

(For Holders of Qualified Mortgage Credit Certificates Issued by
State or Local Governmental Units or Agencies)
© Attach to Form 1040 or 1040NR.
© See instructions on back.

Department of the Treasury
Internal Revenue Service (99)
Name(s) shown on your tax return

Attachment
Sequence No. 138
Your social security number

Enter the address of your main home to which the qualified mortgage certificate relates if it is different from the address shown on your tax return.
Name of Issuer of Mortgage Credit Certificate

Mortgage Credit Certificate Number

Issue Date

Before you begin Part I, figure the amounts of any of the following credits you are claiming: Credit for the elderly or the disabled,
alternative motor vehicle credit, qualified plug-in electric vehicle credit, and qualified plug-in electric drive motor vehicle credit.

Part I
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3

Current Year Mortgage Interest Credit

Interest paid on the certified indebtedness amount. If someone else (other than your spouse if
filing jointly) also held an interest in the home, enter only your share of the interest paid . . .

1

Enter the certificate credit rate shown on your mortgage credit certificate. Do not enter the
interest rate on your home mortgage . . . . . . . . . . . . . . . . . . . .

2

If line 2 is 20% or less, multiply line 1 by line 2. If line 2 is more than 20%, or you refinanced
your mortgage and received a reissued certificate, see the instructions for the amount to enter .
You must reduce your deduction for home mortgage interest on Schedule A (Form 1040)
by the amount on line 3.

3

4

Enter any 2006 credit carryforward from line 18 of your 2008 Form 8396 .

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5

Enter any 2007 credit carryforward from line 16 of your 2008 Form 8396 .

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6

Enter any 2008 credit carryforward from line 19 of your 2008 Form 8396 .

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6

7

Add lines 3 through 6 .

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7

8

Enter the amount from Form 1040, line 46, or Form 1040NR, line 43.

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1040 filers:

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Enter the total of the amounts from Form 1040, lines 47 through 50; line 12 of the line 11
Worksheet in Pub. 972 (see instructions); Form 5695, line 11; Form 8834, line 22; Form
8910, line 21; Form 8936, line 14; and Schedule R (Form 1040A or 1040), line 24.
1040NR filers: Enter the amount from Form 1040NR, lines 44 through 46; line 12 of the line
11 Worksheet in Pub. 972 (see instructions); Form 5695, line 11; Form 8834,
line 22; Form 8910, line 21; and Form 8936, line 14.

Subtract line 9 from line 8. If zero or less, enter -0- here and on line 11 and go to Part II . . .
Current year mortgage interest credit. Enter the smaller of line 7 or line 10. Also include this
amount in the total on Form 1040, line 52, or Form 1040NR, line 48, and check box a on that line .

Part II

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10
11

Mortgage Interest Credit Carryforward to 2010. (Complete only if line 11 is less than line 7.)

12

Add lines 3 and 4

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Enter the amount from line 7 .

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Enter the larger of line 11 or line 12 .

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Subtract line 14 from line 13 .

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16

2008 credit carryforward to 2010. Enter the smaller of line 6 or line 15 .

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Subtract line 16 from line 15 .

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2007 credit carryforward to 2010. Enter the smaller of line 5 or line 17 .

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2009 credit carryforward to 2010. Subtract line 11 from line 3. If zero or less, enter -0- .

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For Paperwork Reduction Act Notice, see back of form.

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Cat. No. 62502X

Form 8396 (2009)

Page 2

Form 8396 (2009)

General Instructions
Purpose of Form
Use Form 8396 to figure the mortgage
interest credit for 2009 and any credit
carryforward to 2010.

Who Can Claim the Credit
You can claim the credit only if you were
issued a qualified Mortgage Credit
Certificate (MCC) by a state or local
governmental unit or agency under a
qualified mortgage credit certificate
program.
Certificates issued by the
Federal Housing
Administration, Department
of Veterans Affairs, and
Farmers Home Administration, and
Homestead Staff Exemption Certificates
do not qualify for the credit.
The home to which the certificate
relates must be your main home and
also must be located in the jurisdiction
of the governmental unit that issued the
certificate.
If the interest on the mortgage was
paid to a related person, you cannot
claim the credit.

If the certificate credit rates are
different in the year you refinanced,
attach a statement showing separate
calculations for lines 1, 2, and 3 for the
applicable parts of the year when the
original MCC and the reissued MCC
were in effect. Combine the amounts
from both calculations for line 3. Enter
that total on line 3 of the form and enter
“see attached” on the dotted line next to
line 2.
For more details, see Regulations
section 1.25-3(p).

Recapture of Credit
If you buy a home using an MCC and
sell it within 9 years, you may have to
recapture (repay) some of the credit. See
Pub. 523, Selling Your Home, and Form
8828, Recapture of Federal Mortgage
Subsidy.

Additional Information
See Pub. 530, Tax Information for
Homeowners, for more details.

Specific Instructions
Part I—Current Year
Mortgage Interest Credit

Refinanced Mortgage

Line 1

You can refinance your mortgage
without losing this credit if your existing
MCC is reissued and the reissued
certificate meets all of the following
conditions.
● It must be issued to the holder(s) of the
existing certificate for the same property.
● It must entirely replace the existing
certificate. The holder cannot retain any
portion of the outstanding balance of the
existing certificate.
● The certified indebtedness on the
reissued certificate cannot exceed the
outstanding balance shown on the
existing certificate.
● The credit rate of the reissued
certificate cannot exceed the credit rate
of the existing certificate.
● The reissued certificate cannot result
in a larger amount on line 3 than would
otherwise have been allowable under the
existing certificate for any tax year.
For each tax year, you must determine
the amount of credit that you would
have been allowed using your original
MCC. To do this, multiply the interest
that was scheduled to be paid on your
original mortgage by the certificate rate
on your original MCC. The result may
limit your line 3 credit allowed when you
have a reissued MCC, even if your new
loan has a lower interest rate.

Enter the interest you paid during the
year on the loan amount (certified
indebtedness amount) shown on your
MCC. In most cases, this will be the
amount in box 1 on Form 1098,
Mortgage Interest Statement, or on a
similar statement you received from your
mortgage holder. If the loan amount on
your MCC is less than your total
mortgage loan, you must allocate the
interest to determine the part that relates
to the loan covered by the MCC. See
Pub. 530 for an example of how to
allocate the interest.

Line 2
The certificate credit rate cannot be less
than 10% or more than 50%.

Line 3
If you refinanced, see Refinanced
Mortgage on this page.
If the certificate credit rate shown on
line 2 is more than 20%, multiply line 1
by line 2, but do not enter more than
$2,000 on line 3. If you and someone
else (other than your spouse if filing
jointly) held an interest in the home, the
$2,000 limit must be allocated to each
owner in proportion to the interest held.
See Dividing the Credit in Pub. 530 for
an example of how to make the
allocation.
Reduction of home mortgage interest
deduction on Schedule A (Form 1040).
If you itemize your deductions on
Schedule A, you must reduce the
amount of home mortgage interest you

would otherwise deduct on Schedule A
by the amount on Form 8396, line 3,
and report the reduced amount on
Schedule A. You must do this even if
part of the amount on line 3 is carried
forward to 2010.

Line 9
If you are claiming the child tax credit,
include on this line the amount from line
12 of the Line 11 Worksheet in Pub. 972.
If you are not claiming the
child tax credit, you do not
need Pub. 972.

Part II—Mortgage Interest
Credit Carryforward to 2010
If the amount on line 11 is less than the
amount on line 7, you may have an
unused credit to carry forward to the
next 3 tax years or until used, whichever
comes first. The current year credit is
used first and then the prior year credits,
beginning with the earliest prior year.
If you have any unused credit to carry
forward to 2010, keep a copy of this
form to figure your credit for 2010.
If you are subject to the
$2,000 credit limit because
your certificate credit rate is
more than 20%, no amount
over the $2,000 limit (or your prorated
share of the $2,000 if you must allocate
the credit) may be carried forward for
use in a later year.
Paperwork Reduction Act Notice. We
ask for the information on this form to
carry out the Internal Revenue laws of
the United States. You are required to
give us the information. We need it to
ensure that you are complying with
these laws and to allow us to figure and
collect the right amount of tax.
You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB
control number. Books or records
relating to a form or its instructions must
be retained as long as their contents
may become material in the
administration of any Internal Revenue
law. Generally, tax returns and return
information are confidential, as required
by Internal Revenue Code section 6103.
The average time and expenses
required to complete and file this form
will vary depending on individual
circumstances. For the estimated
averages, see the instructions for your
income tax return.
If you have suggestions for making
this form simpler, we would be happy to
hear from you. See the instructions for
your income tax return.