8936 Instructions for Form 8936

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Instructions for Form 8936

Department of the Treasury
Internal Revenue Service

(Rev. January 2023)

Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified
Two-Wheeled Plug-in Electric Vehicles and New Clean Vehicles)

DRAFT AS OF
December 16, 2022
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 IRS.gov/Form8936.

What’s New

Qualified plug-in electric drive motor vehicles. The
credit for these plug-in vehicles is not available for vehicles
placed in service after 2022. See Qualified Plug-in Electric
Drive Motor Vehicle, later.

New clean vehicles. The credit for new clean vehicles is
available for vehicles placed in service after 2022. See New
Clean Vehicle, later.
Two-wheeled vehicles. The credit for qualified
two-wheeled plug-in electric vehicles expired for vehicles
acquired after 2021. However, if you acquired the
two-wheeled vehicle in 2021, but placed it in service during
2022, you may still be able to claim the credit for 2022.
New qualified fuel cell motor vehicles. The credit for
these vehicles is now available under the credit for new clean
vehicles for vehicles placed in service after 2022. A credit for
these vehicles was formerly allowed on Form 8910,
Alternative Motor Vehicle Credit.
Phaseout for Toyota vehicles. See the instructions for
Line 4b.
Phaseout ending after 2022. Toyota, Tesla, and General
Motors (GM) vehicles sold after 2022 will no longer be
subject to a credit phaseout.
Transition rule. See the instructions for Line 3.

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 and
new clean vehicles discussed under What's New, earlier.
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.

Dec 16, 2022

Which Revision To Use

Use the January 2023 revision of Form 8936 for tax years
beginning in 2022 or later, until a later revision is issued. Use
prior revisions of the form for earlier tax years. All revisions
are available at IRS.gov/Form8936.

Qualified Plug-in Electric Drive Motor
Vehicle

This is a new vehicle with at least four wheels placed in
service before 2023 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;
• Is manufactured primarily for use on public streets, roads,
and highways;
• Has a gross vehicle weight of less than 14,000 pounds;
and
• Meets certain additional requirements discussed under
Certification and Other Requirements, later.

Qualified Two-Wheeled Plug-in
Electric Vehicle

This is a new vehicle with two wheels acquired before 2022
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;
• Is manufactured primarily for use on public streets, roads,
and highways;
• Has a gross vehicle weight of less than 14,000 pounds;
and
• Meets certain additional requirements discussed under
Certification and Other Requirements, later.

Certification and Other Requirements
Generally, for qualified plug-in electric drive motor vehicles
and qualified two-wheeled plug-in electric vehicles, 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 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 acquired after the date of
publication of the withdrawal announcement.
If you acquired a vehicle and its certification was
withdrawn on or after the date you acquired it, you can rely

Cat. No. 67912V

• Has a manufacturer's suggested retail price of not more
than $55,000 ($80,000 for a van, SUV, or pickup truck); and
• Meets certain additional requirements discussed under
New Clean Vehicle Certification and Other Requirements,
later.

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
acquired the vehicle on or before the date the IRS published
the withdrawal announcement.

New Clean Vehicle Certification and
Other Requirements

The following additional 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 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.
• For vehicles purchased after August 16, 2022, the final
assembly of the vehicle must occur within North America. For
more information, see the updated information for consumers
at IRS.gov/pluginvehiclecreditamounts.

DRAFT AS OF
December 16, 2022
Generally, for new clean vehicles (other than new qualified
fuel cell motor vehicles), the vehicle must have been
manufactured by a qualified manufacturer. A qualified
manufacturer is a manufacturer who has entered into a
written agreement with the IRS under which the manufacturer
agrees to make periodic written reports to the IRS providing
vehicle identification numbers (VINs) and other information
about their new clean vehicles. Information and certifications
contained in these reports will help identify which vehicles
qualify for the new clean vehicle credit. Manufacturers of fuel
cell vehicles were also encouraged to file these reports.

The seller of new clean vehicles (including fuel cell
vehicles) will provide a report to the purchaser (and send a
copy to the IRS) providing information needed to claim the
credit including the following.
• The purchaser’s name and taxpayer identification number.
• The vehicle’s VIN.
• Verification that the original use of the vehicle begins with
the purchaser.
• The maximum new clean vehicle credit allowable for the
vehicle.

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.

The following additional 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 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.

More information. For details, see the following.
• Notice 2009-89, 2009-48 I.R.B. 714, available at
IRS.gov/irb/2009-48_IRB#NOT-2009-89.
• Notice 2013-67, 2013-45 I.R.B. 470, available at
IRS.gov/irb/2013-45_IRB#NOT-2013-67.
• Notice 2016-51, 2016-37 I.R.B. 344, available at
IRS.gov/irb/2016-37_IRB#NOT-2016-51.

New Clean Vehicle

More information. For details, see the following.
• IRC 30D (as amended by the Inflation Reduction Act of
2022).
• Rev. Proc. 2022-42.

This is a new vehicle with at least four wheels placed in
service after 2022 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 7 kilowatt hours and is capable of being recharged from
an external source of electricity;
• Is manufactured primarily for use on public streets, roads,
and highways;
• Has a gross vehicle weight of less than 14,000 pounds;
• Had its final assembly within North America;
• Has a manufacturer's suggested retail price of not more
than $55,000 ($80,000 for a van, SUV, or pickup truck); and
• Meets certain additional requirements discussed under
New Clean Vehicle Certification and Other Requirements,
later.

Credit Phaseout

The credit for qualified plug-in electric drive motor vehicles
sold before 2023 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. The phaseout
does not apply to vehicles sold after 2022.

Basis Reduction

New Qualified Fuel Cell Motor Vehicle

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.

This is a new vehicle with at least four wheels placed in
service after 2022 that:
• Is propelled by power derived from one or more cells that
convert chemical energy directly into electricity by combining
oxygen with hydrogen fuel;
• Is manufactured primarily for use on public streets, roads,
and highways;
• Had its final assembly within North America;

Coordination With Other Credits

A vehicle that qualifies for the credit on this form cannot be
used to claim the alternative motor vehicle credit on Form

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Instructions for Form 8936 (Rev. 1-2023)

• 100% if you purchased it after 2022.

8910 or the qualified commercial clean vehicle credit on
Form 8936-A.

General Motors. Enter the following percentage if the
vehicle was manufactured by GM.
• 0% if you purchased it before 2023.
• 100% if you purchased it after 2022.

Recapture of Credit

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).

Line 5

Enter the percentage of business/investment use.

DRAFT AS OF
December 16, 2022
Specific Instructions

Enter 100% if the vehicle is used solely for business
purposes or you are claiming the credit as the seller of the
vehicle.

Line 2

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.

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.

Line 3

Enter 08/15/2022 if you qualify and elect to apply the
transition rule discussed below.

Transition rule. If you purchased, or entered into a written
binding contract to purchase, a qualified plug-in electric drive
motor vehicle after 2021 and before August 16, 2022, you
may elect to treat such vehicle as having been placed in
service on August 15, 2022, the day before the enactment
date of the Inflation Reduction Act of 2022. Any additional
election guidance that is issued will be added to these
instructions at a later date.

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

Line 4a

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.
Tentative credit amounts acknowledged by the IRS for
qualified plug-in electric drive motor vehicles are available at
IRS.gov/pluginvehiclecreditamounts. Tentative credit
amounts for new clean vehicles are provided to the
purchaser by the seller at the time the vehicle is sold, and
later forwarded to the IRS. See New Clean Vehicle
Certification and Other Requirements, earlier.

!

CAUTION

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

Line 7

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

Line 13

For any vehicles subject to a reduced credit
(discussed next), enter the original unreduced credit
amount on line 4a.

Enter the total qualified plug-in electric drive motor vehicle
credits and any clean vehicle credits from:
• Schedule K-1 (Form 1065), Partner's Share of Income,
Deductions, Credits, etc., box 15 (code P); and
• Schedule K-1 (Form 1120-S), Shareholder's Share of
Income, Deductions, Credits, etc., box 13 (code P).

Line 4b

Enter 100% unless the vehicle was a vehicle with at least four
wheels manufactured by Toyota, Tesla, or General Motors
(Chevrolet Bolt EV, etc.).

Partnerships and S corporations report the above credits on
line 13. All other filers figuring a separate credit on earlier
lines 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.

Toyota. Enter the following percentage if the vehicle was
manufactured by Toyota.
• 100% if you purchased it before October 1, 2022.
• 50% if you purchased it after September 30, 2022, but
before 2023.
• 100% if you purchased it after 2022.

Line 18

Tesla. Enter the following percentage if the vehicle was
manufactured by Tesla.
• 0% if you purchased it before 2023.

Instructions for Form 8936 (Rev. 1-2023)

Use the Line 18 Modified Adjusted Gross Income (MAGI)
Limitation Worksheet to figure the amount to enter on line 18
for a vehicle placed in service after 2022.

-3-

Line 18 Modified Adjusted Gross Income (MAGI)
Limitation Worksheet

Keep for Your Records

1.

Enter $150,000 ($300,000 if married filing jointly or a qualifying surviving spouse; $225,000 if
head of household) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2a. Enter the amount from line 11 of your 2022 Form 1040, 1040-SR, or
1040-NR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a.
b. Enter any income from Puerto Rico you excluded . . . . . . . . . . . . . . . . . . . . . . . . . . . 2b.

DRAFT AS OF
December 16, 2022
c. Enter any amount from Form 2555, line 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

d. Enter any amount from Form 2555, line 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
e. Enter any amount from Form 4563, line 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.

2c.

2d.

2e.
Add lines 2a through 2e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4a. Enter the amount from line 11 of your 2021 Form 1040, 1040-SR, or
1040-NR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b. Enter any income from Puerto Rico you excluded . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4a.

c. Enter any amount from Form 2555, line 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4c.

d. Enter any amount from Form 2555, line 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
e. Enter any amount from Form 4563, line 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.

4b.
4d.

5.

4e.
Add lines 4a through 4e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.

6.

Enter the smaller of line 3 or line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.

7.

Subtract line 6 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

If line 7 is:
• Less than zero, enter -0- on line 18.
• Zero or more, enter the amount from line 15 on line 18.

Line 21

tax returns and return information are confidential, as
required by section 6103.

Enter the total, if any, credits from Schedule 3 (Form 1040),
lines 1 through 4, 6d, 6e, and 6I; and Form 5695, line 30.

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.

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.
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,

Recordkeeping . . . . . . . . . . . . . . . . . . .
Learning about the law or the form . . . . . . .
Preparing and sending the form to the IRS . .

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 (Rev. 1-2023)