8936 Instructions for Form 8936

2016

Instructions for Form 8936

Department of the Treasury
Internal Revenue Service

Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified
Two-Wheeled Plug-in Electric Vehicles)
Section references are to the Internal Revenue Code unless
otherwise noted.

Future Developments

For the latest information about developments related to Form
8936 and its instructions, such as legislation enacted after they
were published, go to www.irs.gov/form8936.

What's New

The credit for qualified two-wheeled plug-in electric vehicles is
scheduled to expire for vehicles acquired after 2016. Do not
claim a credit for these vehicles on Form 8936 unless the credit
is extended.

General Instructions
Purpose of Form

Use Form 8936 to figure your credit for qualified plug-in electric
drive motor vehicles you placed in service during your tax year.
Also use Form 8936 to figure your credit for certain qualified
two-wheeled plug-in electric vehicles.
The credit attributable to depreciable property (vehicles used
for business or investment purposes) is treated as a general
business credit. Any credit not attributable to depreciable
property is treated as a personal credit.
Partnerships and S corporations must file this form to claim
the credit. All other taxpayers are not required to complete or file
this form if their only source for this credit is a partnership or S
corporation. Instead, they can report this credit directly on line 1y
in Part III of Form 3800, General Business Credit.

Qualified Plug-in Electric Drive Motor
Vehicle

This is a new vehicle with at least four wheels that:
Is propelled to a significant extent by an electric motor that
draws electricity from a battery that has a capacity of not less
than 4 kilowatt hours and is capable of being recharged from an
external source of electricity, and
Has a gross vehicle weight of less than 14,000 pounds.

Qualified Two-Wheeled Plug-in
Electric Vehicle

This is a new vehicle with two wheels that:
Is capable of achieving a speed of 45 miles per hour or
greater,
Is propelled to a significant extent by an electric motor that
draws electricity from a battery that has a capacity of not less
than 2.5 kilowatt hours and is capable of being recharged from
an external source of electricity, and
Has a gross vehicle weight of less than 14,000 pounds.

Certification and Other Requirements

Generally, you can rely on the manufacturer’s (or, in the case of
a foreign manufacturer, its domestic distributor’s) certification to
the IRS that a specific make, model, and model year vehicle
qualifies for the credit and, if applicable, the amount of the credit

Dec 08, 2016

for which it qualifies. The manufacturer or domestic distributor
should be able to provide you with a copy of the IRS letter
acknowledging the certification of the vehicle.
If, however, the IRS publishes an announcement that the
certification for any specific make, model, and model year
vehicle has been withdrawn, you cannot rely on the certification
for such a vehicle purchased after the date of publication of the
withdrawal announcement.
If you purchased a vehicle and its certification was withdrawn
on or after the date of purchase, you can rely on such
certification even if you had not placed the vehicle in service or
claimed the credit by the date the withdrawal announcement
was published by the IRS. The IRS will not attempt to collect any
understatement of tax liability attributable to reliance on the
certification as long as you purchased the vehicle on or before
the date the IRS published the withdrawal announcement.
The following requirements must be met to qualify for the
credit.
You are the owner of the vehicle. If the vehicle is leased, only
the lessor and not the lessee, is entitled to the credit.
You placed the vehicle in service during your tax year.
The vehicle is manufactured primarily for use on public
streets, roads, and highways.
The original use of the vehicle began with you.
You acquired the vehicle for use or to lease to others, and not
for resale.
You use the vehicle primarily in the United States.
Exception. If you are the seller of a qualified plug-in electric
drive motor vehicle or qualified two-wheeled plug-in electric
vehicle to a tax-exempt organization, governmental unit, or a
foreign person or entity, and the use of that vehicle is described
in section 50(b)(3) or (4), you can claim the credit, but only if you
clearly disclose in writing to the purchaser the amount of the
tentative credit allowable for the vehicle (from line 11 of Form
8936). Treat all vehicles eligible for this exception as business/
investment property. If you elect to claim the credit, you must
reduce cost of goods sold by the amount you entered on line 11
for that vehicle.
More information. For details, see the following.
Section 30D.
Notice 2009-89, 2009-48 I.R.B. 714, available at www.irs.gov/
irb/2009-48_IRB/ar09.html.
Notice 2013-67, 2013-45 I.R.B. 470, available at www.irs.gov/
irb/2013-45_IRB/ar05.html.
Notice 2016-51, 2016-37 I.R.B. 344, available at www.irs.gov/
irb/2016-37_IRB/ar06.html.

Credit Phaseout

The credit for vehicles with at least four wheels is subject to a
phaseout (reduction) once the vehicle manufacturer (or, for a
foreign manufacturer, its U.S. distributor) sells 200,000 of these
vehicles to a retailer for use in the United States after 2009. The
phaseout begins in the second calendar quarter after the quarter
in which the 200,000th vehicle was sold. Then the phaseout
allows 50% of the full credit for 2 quarters, 25% of the full credit
for 2 additional quarters, and no credit thereafter.

Cat. No. 67912V

Basis Reduction

last 6 months of the year, you would enter 25% on line 5 (50%
multiplied by 6 divided by 12).

Unless you elect not to claim the credit, you may have to reduce
the basis of each vehicle by the sum of the amounts entered on
lines 11 and 18 for that vehicle.

For more information, see Pub. 463, Travel, Entertainment,
Gift, and Car Expenses.

Coordination With Other Credits

Line 7

A vehicle that qualifies for the qualified plug-in electric drive
motor vehicle credit on this form cannot be used to claim the
alternative motor vehicle credit on Form 8910.

Enter any section 179 expense deduction you claimed for the
vehicle from Part I of Form 4562, Depreciation and Amortization.

Line 13

Recapture of Credit

Enter total qualified plug-in electric drive motor vehicle credits
from:

If the vehicle no longer qualifies for the credit, you may have to
recapture part or all of the credit. For details, see section 30D(f)
(5).

Schedule K-1 (Form 1065), Partner's Share of Income,
Deductions, Credits, etc., box 15 (code P); and
Schedule K-1 (Form 1120S), Shareholder's Share of Income,
Deductions, Credits, etc., box 13 (code P).

Specific Instructions
Line 2

Partnerships and S corporations must always report the above
credits on line 13. All other filers figuring a separate credit on
earlier lines must also report the above credits on line 13. All
others not using earlier lines to figure a separate credit can
report the above credits directly on Form 3800, Part III, line 1y.

Enter the vehicle's vehicle identification number (VIN) on line 2.
The VIN of a vehicle can be obtained from the registration, title,
proof of insurance, or actual vehicle. Generally, the VIN is 17
characters made up of numbers and letters.

Line 21

Line 4

Enter the total, if any, credits from Form 1040, lines 48 through
51 (or Form 1040NR, lines 46 through 48); Form 5695, line 30;
Form 8910, line 15; and Schedule R, line 22.

Cost or Tentative Credit

For two-wheeled vehicles, enter the cost of the vehicle you
entered on line 1. For vehicles with at least four wheels, enter
the credit allowable for the year, make, and model of vehicle you
entered on line 1. You can generally rely on the manufacturer’s
(or domestic distributor’s) certification to the IRS of the credit
allowable as explained above.

Line 23

If you cannot use part of the personal portion of the credit
because of the tax liability limit, the unused credit is lost. The
unused personal portion of the credit cannot be carried back or
forward to other tax years.

Tentative credit amounts acknowledged by the IRS are
available at www.irs.gov/Businesses/Qualified-VehiclesAcquired-after-12-31-2009. Or you can visit IRS.gov and search
for “Plug-In Electric Drive Vehicle Credit (IRC 30D).”

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.

Line 5

Enter the percentage of business/investment use.

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 section 6103.

Enter 100% if the vehicle is used solely for business
purposes or you are claiming the credit as the seller of the
vehicle.
If the vehicle is used for both business purposes and
personal purposes, determine the percentage of business use
by dividing the number of miles the vehicle is driven during the
year for business purposes or for the production of income (not
to include any commuting mileage) by the total number of miles
the vehicle is driven for all purposes. Treat vehicles used by your
employees as being used 100% for business/investment
purposes if the value of personal use is included in the
employees’ gross income, or the employees reimburse you for
the personal use. If you report the amount of personal use of the
vehicle in your employee’s gross income and withhold the
appropriate taxes, enter “100%” for the percentage of business/
investment use.

The time needed to complete and file this form will vary
depending on individual circumstances. The estimated burden
for individual and business taxpayers filing this form is approved
under OMB control number 1545-0074 and 1545-0123 and is
included in the estimates shown in the instructions for their
individual and business income tax return. The estimated burden
for all other taxpayers who file this form is shown below.
Recordkeeping . . . . . . . . . . . . . . . . .
Learning about the law or the form . . . . .
Preparing and sending the form to the IRS

If during the tax year you convert property used solely for
personal purposes to business/investment use (or vice versa),
figure the percentage of business/investment use only for the
number of months you use the property in your business or for
the production of income. Multiply that percentage by the
number of months you use the property in your business or for
the production of income and divide the result by 12. For
example, if you converted a vehicle to 50% business use for the

. . .
. . .
. . .

4 hr., 4 min.
35 min.
41 min.

If you have comments concerning the accuracy of these time
estimates or suggestions for making this form simpler, we would
be happy to hear from you. See the instructions for the tax return
with which this form is filed.

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Instructions for Form 8936 (2016)