Form 8396 Mortgage Interest Credit

Form

8396

Mortgage Interest Credit

OMB No. 1545-0074

2012

(For Holders of Qualified Mortgage Credit Certificates Issued by
State or Local Governmental Units or Agencies)
▶ Information about Form 8396 and its instructions is at www.irs.gov/form8396.
▶ Attach to Form 1040 or 1040NR.

Department of the Treasury
Internal Revenue Service (99)

Attachment
Sequence No. 138
Your social security number

Name(s) shown on your tax return

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 2009 credit carryforward from line 16 of your 2011 Form 8396 .

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4

5

Enter any 2010 credit carryforward from line 14 of your 2011 Form 8396 .

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5

6

Enter any 2011 credit carryforward from line 17 of your 2011 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 2013. (Complete only if line 9 is less than line 7.)

10

Add lines 3 and 4

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Enter the amount from line 7 .

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Enter the larger of line 9 or line 10 .

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12

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Subtract line 12 from line 11 .

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13

14

2011 credit carryforward to 2013. 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

2010 credit carryforward to 2013. Enter the smaller of line 5 or line 15 .

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16

17

2012 credit carryforward to 2013. 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 (2012)

Page 2

Form 8396 (2012)

General Instructions

Specific Instructions

Future Developments

Part I—Current Year Mortgage Interest
Credit

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 2012 and
any credit carryforward to 2013.

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
CAUTION
Exemption Certificates do not qualify for the credit.

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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.

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.

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 2013.

Part II—Mortgage Interest Credit
Carryforward to 2013
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 2013, keep a
copy of this form to figure your credit for 2013.
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
CAUTION
$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 32; Form 8834, line 23; Form 8910, line 22;
Form 8936, line 23; and Schedule R (Form
1040A or 1040), 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 32; Form 8834, line 23; Form 8910,
2.
line 22; and Form 8936, line 23. . . . .
3. Subtract line 2 from line 1. Enter this amount
on Form 8396, line 8. If zero or less, enter -0here 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.