Form 8396 Mortgage Interest Credit

Form

8396

Mortgage Interest Credit

OMB No. 1545-0074

2011

(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
1

2

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 2008 credit carryforward from line 16 of your 2010 Form 8396 .

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4

5

Enter any 2009 credit carryforward from line 14 of your 2010 Form 8396 .

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5

6

Enter any 2010 credit carryforward from line 17 of your 2010 Form 8396 .

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6

7

Add lines 3 through 6 .

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7

8

Limitation based on tax liability. Enter the amount from the Credit Limit Worksheet (see
instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8

Current year mortgage interest credit. Enter the smaller of line 7 or line 8. Also include this
amount in the total on Form 1040, line 53, or Form 1040NR, line 50. Check box c on that line and
enter "8396" in the space next to that box . . . . . . . . . . . . . . . . . . .

9

9

Part II

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Mortgage Interest Credit Carryforward to 2012. (Complete only if line 9 is less than line 7.)

10

Add lines 3 and 4

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10

11

Enter the amount from line 7 .

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11

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Enter the larger of line 9 or line 10 .

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12

13

Subtract line 12 from line 11 .

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13

14

2010 credit carryforward to 2012. Enter the smaller of line 6 or line 13 .

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14

15

Subtract line 14 from line 13 .

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15

16

2009 credit carryforward to 2012. Enter the smaller of line 5 or line 15 .

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16

17

2011 credit carryforward to 2012. Subtract line 9 from line 3. If zero or less, enter -0-

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17

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For Paperwork Reduction Act Notice, see your tax return instructions.

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Cat. No. 62502X

Form 8396 (2011)

Page 2

Form 8396 (2011)

General Instructions
What's New
Future developments. The IRS has
created a page on IRS.gov for more
information about Form 8396, at
www.irs.gov/form8396. Information
about any future developments affecting
Form 8396 (such as legislation enacted
after we release it) will be posted on that
page.

Purpose of Form
Use Form 8396 to figure the mortgage
interest credit for 2011 and any credit
carryforward to 2012.

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
CAUTION
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.

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▲

Refinanced Mortgage
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.
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
Line 1
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 2012.

Part II—Mortgage Interest
Credit Carryforward to 2012
If the amount on line 9 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 2012, keep a copy of this
form to figure your credit for 2012.
If you are subject to the
$2,000 credit limit because
your certificate credit rate is
CAUTION
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.

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▲

Line 8—Credit Limit Worksheet
Keep for Your Records
1. Enter the amount from Form 1040, line 46, or Form 1040NR, line 44

1.

2. Form 1040 filers: Enter the amounts from Form 1040, line 47 through
50; line 12 of the Line 11 Worksheet in Pub. 972*; Form 5695, line 14;
Form 8834, line 23; Form 8910, line 22; Form 8936, line 15; and
Schedule R (Form 1040 or 1040A), line 22.
Form 1040NR filers: Enter the amounts from Form 1040NR, lines 45
through 47; line 12 of the Line 11 Worksheet in Pub. 972*; Form 5695,
line 14; Form 8834, line 23; Form 8910, line 22; and Form 8936,
line 15.
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3. Subtract line 2 from line 1. Enter this amount on Form 8396, line 8. If
zero or less, enter -0- here and on Form 8396, lines 8 and 9, and go
to Part II of Form 8396. . . . . . . . . . . . . . . . 3.
*If you are not claiming the child tax credit, you do not need Pub. 972.