Publication 17
taxmap/pub17/p17-186.htm#en_us_publink1000174891taxmap/pub17/p17-186.htm#en_us_publink1000250489Government retiree credit.(p247)
This credit has expired. It is not available for 2010.
taxmap/pub17/p17-186.htm#en_us_publink1000174893Adoption credit.(p247)
The maximum adoption credit increases to $13,170. This credit
is now refundable. Also, new documentation requirements apply. See
Adoption Credit for more information.
First-time homebuyer credit.(p247)
You generally cannot claim the credit for a home you bought after
April 30, 2010. However, you may be able to claim the credit if you entered into
a written binding contract before May 1, 2010, to buy the home before July 1,
2010, and actually bought the home before October 1, 2010. Also, certain members
of the Armed Forces and certain other taxpayers have additional time to buy a
home and take the credit. See
First-Time Homebuyer Credit.
Recapture of first-time homebuyer credit.(p247)
If you claimed the first-time homebuyer credit for a home you
bought in 2008, you generally must begin repaying it on your 2010 return. In
addition, you generally must repay any credit you claimed for 2008 or 2009 if
you sold your home in 2010 or the home stopped being your main home in 2010. See
First-Time Homebuyer Credit.
This chapter discusses the following nonrefundable credits.
- Alternative motor vehicle credit.
- Alternative fuel vehicle refueling property credit.
- Credit to holders of tax credit bonds.
- Foreign tax credit.
- Mortgage interest credit.
- Nonrefundable credit for prior year minimum tax.
- Plug-in electric drive motor vehicle credit.
- Plug-in electric vehicle credit.
- Residential energy credits.
- Retirement savings contributions credit.
This chapter also discusses the following refundable credits.
- Adoption credit.
- Credit for tax on undistributed capital gain.
- First-time homebuyer credit.
- Health coverage tax credit.
- Making work pay credit.
- Refundable credit for prior year minimum tax.
- Credit for excess social security tax or railroad retirement
tax withheld.
Several other credits are discussed in other chapters in this
publication.
- Child and dependent care credit (chapter 32).
- Credit for the elderly or the disabled (chapter 33).
- Child tax credit (chapter 34).
- Education credits (chapter 35).
- Earned income credit (chapter 36).
The first part of this chapter,
Nonrefundable Credits,
covers ten credits that you subtract from your tax. These credits
may reduce your tax to zero. If these credits are more than your tax, the excess
is not refunded to you.
taxmap/pub17/p17-186.htm#en_us_publink1000174904The second part of this chapter,
Refundable Credits,
covers seven credits that are treated as payments and are refundable
to you. These credits are added to the federal income tax withheld and any
estimated tax payments you made. If this total is more than your total tax, the
excess will be refunded to you.
taxmap/pub17/p17-186.htm#TXMP17cb5524Useful items
You may want to see:
Publication 502 Medical and Dental Expenses (Including the Health Coverage Tax
Credit) 514 Foreign Tax Credit for
Individuals 530 Tax Information for Homeowners 590 Individual Retirement Arrangements (IRAs) Form (and Instructions) 1116:
Foreign Tax Credit (Individual, Estate, or Trust) 2439:
Notice to Shareholder of Undistributed Long-Term Capital Gains 5405:
First-Time Homebuyer Credit and Repayment of the Credit 5695:
Residential Energy Credits 8396:
Mortgage Interest Credit 8801:
Credit For Prior Year Minimum Tax — Individuals, Estates,
and Trusts 8828:
Recapture of Federal Mortgage Subsidy 8834:
Qualified Plug-in Electric and Electric Vehicle Credit 8839:
Qualified Adoption Expenses 8880:
Credit for Qualified Retirement Savings Contributions 8885:
Health Coverage Tax Credit 8910:
Alternative Motor Vehicle Credit 8911:
Alternative Fuel Vehicle Refueling Property Credit 8912:
Credit to Holders of Tax Credit Bonds 8936:
Qualified Plug-in Electric Drive Motor Vehicle Credit taxmap/pub17/p17-186.htm#en_us_publink1000174905The credits discussed in this part of the chapter can reduce
your tax. However, if the total of these credits is more than your tax, the
excess is not refunded to you.
taxmap/pub17/p17-186.htm#en_us_publink1000174914You may be able to take a credit if you place an alternative
motor vehicle in service in 2010.
taxmap/pub17/p17-186.htm#en_us_publink1000174915An alternative motor vehicle is a new vehicle that qualifies
as one of the following four types of vehicles.
- Qualified hybrid vehicle (must weigh 8,500 pounds or less).
- Advanced lean burn technology vehicle.
- Qualified alternative fuel vehicle.
- Qualified fuel cell vehicle.
A credit is also allowed for the cost of converting a vehicle
to a qualified plug-in electric drive vehicle.
 | At the time this publication went to print, Congress was
considering legislation that would extend this credit to certain qualified
hybrid vehicles weighing more than 8,500 pounds. To find out if this legislation
was enacted, and for more details, go to
www.irs.gov/formspubs. |
taxmap/pub17/p17-186.htm#en_us_publink1000174916Generally, you can rely on the manufacturer's (or, in the case
of a foreign manufacturer, its domestic distributor's) certification that a
specific make, model, and model year vehicle qualifies for the credit and the
amount of the credit for which it qualifies.
Ordinarily the amount of the credit is 100% of the manufacturer's
(or domestic distributor's) certification of the maximum credit allowable.
However, the credit for converting a vehicle to a qualified plug-in electric
drive vehicle is the smaller of (a) $4,000, or (b) 10% of the cost of the
conversion.
If you purchased a qualified hybrid vehicle weighing 8,500 pounds
or less or an advanced lean burn technology vehicle from a manufacturer who
previously sold at least 60,000 of these vehicles, the amount of your credit may
be reduced. Your manufacturer should give you the information you need to figure
your reduced credit. Also see the Form 8910 instructions.
| See the Form 8910 instructions for a list of vehicles for
which the credit is reduced or not allowed. |
taxmap/pub17/p17-186.htm#en_us_publink1000174921To take the credit, you must complete Form 8910 and attach it
to your Form 1040. Include the credit in your total for Form 1040, line 53.
Check box c and enter "8910" on the line next to that box.
taxmap/pub17/p17-186.htm#en_us_publink1000174922For more information on the credit, see the instructions for
Form 8910.
taxmap/pub17/p17-186.htm#en_us_publink1000174923You may be able to take a credit if you place qualified alternative
fuel vehicle refueling property in service in 2010.
taxmap/pub17/p17-186.htm#en_us_publink1000174924Qualified alternative fuel vehicle refueling property is any
property (other than a building or its structural components) used to store or
dispense alternative fuel into the fuel tank of a motor vehicle propelled by the
fuel, but only if the storage or dispensing is at the point where the fuel is
delivered into the tank.
The following are alternative fuels.
- Any fuel at least 85% of the volume of which consists of one
or more of the following: ethanol, natural gas, compressed natural gas,
liquefied natural gas, liquefied petroleum gas, or hydrogen.
- Any mixture which consists of two or more of the following:
biodiesel, diesel fuel, or kerosene, and at least 20% of the volume of which
consists of biodiesel determined without regard to any kerosene.
- Electricity.
For personal use property, the credit is generally the smaller
of 50% of the property's cost or $2,000. For business use property, the credit
is generally the smaller of 50% of the property's cost or $50,000. The amounts
are different for hydrogen refueling property.
taxmap/pub17/p17-186.htm#en_us_publink1000174927To take the credit, you must complete Form 8911 and attach it
to your Form 1040. Include the credit in your total for Form 1040, line 53.
Check box c and enter "8911" on the line next to that box.
taxmap/pub17/p17-186.htm#en_us_publink1000174928For more information on the credit, see the instructions for
Form 8911.
taxmap/pub17/p17-186.htm#en_us_publink1000174929Tax credit bonds are bonds in which the holder receives a tax
credit in lieu of some or all of the interest on the bond.
You may be able to take a credit if you are a holder of one of
the following bonds.
- Clean renewable energy bonds (issued before 2010).
- New clean renewable energy bonds.
- Qualified energy conservation bonds.
- Midwestern tax credit bonds.
- Qualified forestry conservation bonds.
- Qualified school construction bonds.
- Qualified zone academy bonds.
- Build America bonds.
In some instances, an issuer may elect to receive a credit for
interest paid on the bond. If the issuer makes this election, you cannot also
claim a credit.
taxmap/pub17/p17-186.htm#en_us_publink1000174930The amount of any tax credit allowed (figured before applying
tax liability limits) must be included as interest income on your tax return.
taxmap/pub17/p17-186.htm#en_us_publink1000174931Complete Form 8912 and attach it to your Form 1040. Include the
credit in your total for Form 1040, line 53. Check box c, and enter "8912" on
the line next to that box.
taxmap/pub17/p17-186.htm#en_us_publink1000174932For more information, see the instructions for Form 8912.
taxmap/pub17/p17-186.htm#en_us_publink1000174933You generally can choose to take income taxes you paid or accrued
during the year to a foreign country or U.S. possession as a credit against your
U.S. income tax. Or, you can deduct them as an itemized deduction (see
chapter 22).
You cannot take a credit (or deduction) for foreign income taxes
paid on income that you exclude from U.S. tax under any of the following.
- Foreign earned income exclusion.
- Foreign housing exclusion.
- Income from Puerto Rico exempt from U.S. tax.
- Possession exclusion.
Unless you can elect not to file Form 1116 (see
Exception, later), your foreign tax credit cannot be more than your U.S.
tax liability (Form 1040, line 44), multiplied by a fraction. The numerator of
the fraction is your taxable income from sources outside the United States. The
denominator is your total taxable income from U.S. and foreign sources. See
Publication 514 for more information.
Complete Form 1116 and attach it to your Form 1040. Enter the
credit on Form 1040, line 47.
taxmap/pub17/p17-186.htm#en_us_publink1000174938You do not have to complete Form 1116 to take the credit if all
of the following apply.
- All of your foreign source gross income was passive income,
which generally includes interest and dividends.
- All of your foreign source gross income and the foreign tax
paid on it were reported to you on a qualified payee statement, which includes
Form 1099-INT and Form 1099-DIV.
- The total of your creditable foreign taxes was not more than
$300 ($600 if married filing jointly).
- You elect this procedure for the tax year.
For more details on these requirements, see the instructions
for Form 1116.
taxmap/pub17/p17-186.htm#en_us_publink1000174939The mortgage interest credit is intended to help lower-income
individuals own a home. If you qualify, you can take the credit each year for
part of the home mortgage interest you pay.
taxmap/pub17/p17-186.htm#en_us_publink1000174940You may be eligible for the credit if you were issued a qualified
mortgage credit certificate (MCC) from your state or local government.
Generally, an MCC is issued only in connection with a new mortgage for the
purchase of your main home.
taxmap/pub17/p17-186.htm#en_us_publink1000174941Figure your credit on Form 8396. If your mortgage loan amount
is equal to (or smaller than) the certified indebtedness (loan) amount shown on
your MCC, enter on Form 8396, line 1, all the interest you paid on your mortgage
during the year.
If your mortgage loan amount is larger than the certified indebtedness
amount shown on your MCC, you can figure the credit on only part of the interest
you paid. To find the amount to enter on line 1, multiply the total interest you
paid during the year on your mortgage by the following fraction.
| | Certified indebtedness amount on your MCC | |
| | Original amount of your mortgage | |
taxmap/pub17/p17-186.htm#en_us_publink1000174943If the certificate credit rate is more than 20%, the credit you
are allowed cannot be more than $2,000. If two or more persons (other than a
married couple filing a joint return) hold an interest in the home to which the
MCC relates, this $2,000 limit must be divided based on the interest held by
each person. See Publication 530 for more information.
taxmap/pub17/p17-186.htm#en_us_publink1000174944Your credit (after applying the limit based on the credit rate)
is also subject to a limit based on your tax that is figured using Form 8396. If
your allowable credit is reduced because of this tax liability limit, you can
carry forward the unused portion of the credit to the next 3 years or until
used, whichever comes first.
If you are subject to the $2,000 limit because your certificate
credit rate is more than 20%, you cannot carry forward any amount more than
$2,000 (or your share of the $2,000 if you must divide the credit).
taxmap/pub17/p17-186.htm#en_us_publink1000174945
Figure your 2010 credit and any carryforward to 2011 on Form 8396, and attach it
to your Form 1040. Be sure to include any credit carryforward from 2007, 2008,
and 2009.
Include the credit in your total for Form 1040, line 53. Check
box c on that line and enter "8396" in the space next to that box.
taxmap/pub17/p17-186.htm#en_us_publink1000174946If you itemize your deductions on Schedule A (Form 1040), you
must reduce your home mortgage interest deduction by the amount of the mortgage
interest credit shown on Form 8396, line 3. You must do this even if part of
that amount is to be carried forward to 2011. For more information about the
home mortgage interest deduction, see
chapter 23.
If you received an MCC with your mortgage loan, you may have
to recapture (pay back) all or part of the benefit you received from that
program. The recapture may be required if you sell or dispose of your home at a
gain during the first 9 years after the date you closed your mortgage loan. See
chapter 15 for more information.
The tax laws give special treatment to some kinds of income and
allow special deductions and credits for some kinds of expenses. If you benefit
from these laws, you may have to pay at least a minimum amount of tax in
addition to any other tax on these items. This is called the alternative minimum
tax.
The special treatment of some items of income and expenses only
allows you to postpone paying tax until a later year. If in prior years you paid
alternative minimum tax because of these tax postponement items, you may be able
to take a credit for prior year minimum tax against your current year's regular
tax.
You may be able to take a credit against your regular tax if
for 2009 you had:
- An alternative minimum tax liability and adjustments or preferences
other than exclusion items,
- A minimum tax credit that you are carrying forward to 2010,
or
- An unallowed qualified electric vehicle credit.
Figure your 2010 nonrefundable credit (if any), and any carryforward to 2011 on
Form 8801, and attach it to your Form 1040. Include the credit in your total for
Form 1040, line 53, and check box b. You can carry forward any unused credit for
prior year minimum tax to later years until it is completely used.
taxmap/pub17/p17-186.htm#en_us_publink1000174953For more information about the credit, see the instructions for
Form 8801.
taxmap/pub17/p17-186.htm#en_us_publink1000210768You may be able to take this credit if you placed in service
for business or personal use a qualified plug-in electric drive motor vehicle in
2010.
Generally, you can rely on the manufacturer's (or, in the case
of a foreign manufacturer, its domestic distributor's) certification that a
vehicle qualifies for the credit.
taxmap/pub17/p17-186.htm#en_us_publink1000210769The amount of the credit varies depending on the battery capacity
and ranges from $2,500 to $7,500 per vehicle.
taxmap/pub17/p17-186.htm#en_us_publink1000210770A qualified plug-in electric drive motor vehicle is a motor vehicle
the original use of which starts with you and that:
- Has at least four wheels,
- Is acquired for your use or lease and not for resale,
- Is made by a manufacturer,
- Is manufactured primarily for use on public streets, roads,
and highways,
- Has a gross vehicle weight rating of less than 14,000 pounds,
- Is a motor vehicle for purposes of the Clean Air Act, and
- Is propelled to a significant extent by an electric motor
that draws electricity from a battery that:
- Has a capacity of at least 4 kilowatt hours, and
- Is capable of being recharged from an external source of
electricity.
To take the credit, you must complete Form 8936 and attach it
to your Form 1040. Include the credit in your total for Form 1040, line 53.
Check box c and enter "8936" on the line next to that box.
taxmap/pub17/p17-186.htm#en_us_publink1000210772You may be able to take this credit if you acquired a qualified
plug-in electric vehicle in 2010. For this credit, the vehicle can have 2, 3, or
4 wheels. A vehicle with 4 wheels must be a low speed vehicle.
Generally, you can rely on the manufacturer's (or, in the case
of a foreign manufacturer, its domestic distributor's) certification that a
vehicle qualifies for the credit.
taxmap/pub17/p17-186.htm#en_us_publink1000210773The credit is 10% of the cost of the vehicle, limited to $2,500
per vehicle.
taxmap/pub17/p17-186.htm#en_us_publink1000210774A qualified plug-in electric vehicle is a motor vehicle the original
use of which starts with you and that:
- Is acquired for your use or lease and not for resale,
- Is made by a manufacturer,
- Is manufactured primarily for use on public streets, roads,
and highways,
- Has a gross vehicle weight rating of less than 3,000 pounds
if it has 4 wheels and less than 14,000 pounds if it has 2 or 3 wheels,
- Is a low speed vehicle if it has 4 wheels, and
- Is propelled to a significant extent by an electric motor
that draws electricity from a battery that:
- Has a capacity of at least 4 kilowatt hours (2.5 kilowatt
hours in the case of a vehicle with 2 or 3 wheels), and
- Is capable of being recharged from an external source of
electricity.
To take the credit, you must complete Form 8834 and attach it
to your Form 1040. Include the credit in your total for Form 1040, line 53.
Check box c and enter "8834" on the line next to that box.
taxmap/pub17/p17-186.htm#en_us_publink1000174954You may be able to take one or both of the following credits
if you made energy saving improvements to your home located in the United States
in 2010.
- Nonbusiness energy property credit.
- Residential energy efficient property credit.
If you are a member of a condominium management association for
a condominium you own or a tenant-stockholder in a cooperative housing
corporation, you are treated as having paid your proportionate share of any
costs of the association or corporation for purposes of these credits.
taxmap/pub17/p17-186.htm#en_us_publink1000209300You may be able to take a credit of 30% of the costs paid or
incurred in 2010 for any qualified energy efficiency improvements and any
residential energy property.
The credit is limited to a total of $1,500 over 2009 and 2010.
Qualified energy efficiency improvements are the following improvements
that are new, can be expected to remain in use at least 5 years, and meet
certain requirements for energy efficiency.
- Any insulation material or system that is specifically and
primarily designed to reduce heat loss or gain of a home.
- Exterior windows (including skylights).
- Exterior doors.
- Any metal or asphalt roof that has appropriate pigmented coatings
or cooling granules specifically and primarily designed to reduce heat gain of
the home.
Residential energy property is any of the following.
- Certain heat pump water heaters; electric heat pumps; central
air conditioners; natural gas, propane, or oil water heaters; and stoves that
use biomass fuel.
- Qualified natural gas, propane, or oil furnaces; and qualified
natural gas, propane, or oil hot water boilers.
- Certain advanced main air circulating fans used in natural
gas, propane, or oil furnaces.
You may be able to take a credit of 30% of your costs of qualified
solar electric property, solar water heating property, fuel cell property, small
wind energy property, and geothermal heat pump property. The credit amount for
costs paid for qualified fuel cell property is limited to $500 for each one-half
kilowatt of capacity of the property.
taxmap/pub17/p17-186.htm#en_us_publink1000174957You must reduce the basis of your home by the amount of any credit
allowed.
taxmap/pub17/p17-186.htm#en_us_publink1000174958Complete Form 5695 and attach it to your Form 1040. Enter the
credit on Form 1040, line 52.
taxmap/pub17/p17-186.htm#en_us_publink1000174959For more information on this credit, see the instructions for
Form 5695.
taxmap/pub17/p17-186.htm#en_us_publink1000174960You may be able to take this credit if you, or your spouse if
filing jointly, made:
- Contributions (other than rollover contributions) to a traditional
or Roth IRA,
- Elective deferrals to a 401(k) or 403(b) plan (including designated
Roth contributions) or to a governmental 457, SEP, or SIMPLE plan,
- Voluntary employee contributions to a qualified retirement
plan (including the federal Thrift Savings Plan), or
- Contributions to a 501(c)(18)(D) plan.
However, you cannot take the credit if either of the following
applies.
- The amount on Form 1040, line 38, or Form 1040A, line 22,
is more than $27,750 ($41,625 if head of household; $55,500 if married filing
jointly).
- The person(s) who made the qualified contribution or elective
deferral (a) was born after January 1, 1993, (b) is claimed as a dependent on
someone else's 2010 tax return, or (c) was a student (defined next).
You were a student if during any part of 5 calendar months of
2010 you:
- Were enrolled as a full-time student at a school, or
- Took a full-time, on-farm training course given by a school
or a state, county, or local government agency.
A school includes a technical, trade, or mechanical school. It
does not include an on-the-job training course, correspondence school, or school
offering courses only through the Internet.
taxmap/pub17/p17-186.htm#en_us_publink1000174963Figure the credit on Form 8880. Enter the credit on your Form
1040, line 50, or your Form 1040A, line 32, and attach Form 8880 to your return.
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