Publication 17
taxmap/pub17/p17-186.htm#en_us_publink1000174891taxmap/pub17/p17-186.htm#en_us_publink1000262876First-time homebuyer credit.
(p254)You generally cannot claim the credit for a home you bought in 2011. However, certain members of the Armed Forces, other uniformed services, or Foreign Service and certain employees of the intelligence community can claim the credit for a home bought before May 1, 2011. Also, they may be able to claim the credit if they entered into a written binding contract before May 1, 2011, to buy the home before July 1, 2011. See
First-Time Homebuyer Credit.
Repayment of first-time homebuyer credit.
(p254)Alternative motor vehicle credit.
(p254)Alternative fuel vehicle refueling property credit.
(p254)Nonbusiness energy property credit.
(p254)The credit is figured differently than it was for 2010. The credit now has a lifetime limit of $500, of which only $200 can be for windows. Other limits and rules have also changed. See
Nonbusiness energy property credit under
Residential Energy Credits.
The maximum adoption credit increases to $13,360. See
Adoption Credit for more information.
Health coverage tax credit.
(p254)The credit decreases to 72.5% (.725) for amounts paid for qualified health insurance coverage after February 2011. See
Health Coverage Tax Credit.
This credit has expired. You cannot claim it on your 2011 return.
Excess withholding of social security and railroad retirement
tax.
(p254)Social security tax and tier 1 railroad retirement (RRTA) tax were both withheld during 2011 at a rate of 4.2% of wages up to $106,800. If you worked for more than one employer and had too much social security or RRTA tax withheld during 2011, you may be entitled to a credit for the excess withholding. See
Credit for Excess Social Security Tax or Railroad Retirement Tax
Withheld, later.
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.
- 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 31).
- Credit for the elderly or the disabled (chapter 32).
- Child tax credit (chapter 33).
- Education credits (chapter 34).
- Earned income credit (chapter 35).
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 six 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#TXMP074d9d72Useful 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 this credit if you place a qualified fuel cell vehicle in service in 2011. The credit is also allowed for the cost of converting a vehicle to a qualified plug-in electric drive
vehicle.
The credit has expired for advanced lean burn technology vehicles, qualified hybrid vehicles, and qualified alternative fuel vehicles purchased after 2010. You cannot claim the credit on your 2011 return for these vehicles. However, you may be able to claim the credit for one of these vehicles purchased in 2010 but not placed in service until
2011.
taxmap/pub17/p17-186.htm#en_us_publink1000174916Generally, you can rely on the manufacturer'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. In the case of a foreign manufacturer, you generally can rely on its domestic distributor's
certification.
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.
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
2011.
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 30% of the property's cost or $1,000. For business use property, the credit is generally the smaller of 30% of the property's cost or $30,000. The higher credit rate and limits that applied for 2009 and 2010 have
ended.
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 gross foreign source income was from interest and dividends and all of that income and the foreign tax paid on it were reported to you on Form 1099-INT, Form 1099-DIV, or Schedule K-1 (or substitute
statement).
- If you had dividend income from shares of stock, you held those shares for at least 16
days.
- You are not filing Form 4563 or excluding income from sources within Puerto
Rico.
- The total of your foreign taxes was not more than $300 (not more than $600 if married filing
jointly).
- All of your foreign taxes were:
- Legally owed and not eligible for a refund, and
- Paid to countries that are recognized by the United States and do not support
terrorism.
For more information on the credit and 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.
Your 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 2011 credit and any carryforward to 2012 on Form 8396, and attach it
to your Form 1040. Be sure to include any credit carryforward from 2008, 2009,
and 2010.
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 2012. 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.
For more information on the credit, see the instructions for Form
8828.
taxmap/pub17/p17-186.htm#en_us_publink1000174949The 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 2010 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 2011,
or
- An unallowed qualified electric vehicle credit.
Figure your 2011 nonrefundable credit (if any), and any carryforward to 2012 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 on 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
2011.
Generally, you can rely on the manufacturer's certification that a vehicle qualifies for the credit. In the case of a foreign manufacturer, you generally can rely on its domestic distributor's
certification.
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 to lease to others 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 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_publink1000260893For more information on the credit, see the instructions for Form
8936.
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 2011. 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 certification that a vehicle qualifies for the credit. In the case of a foreign manufacturer, you generally can rely on its domestic distributor's certification.
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 to lease to others 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 or 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
- Can be 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_publink1000260894For more information on the credit, see the instructions for Form
8834.
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 2011.
- 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 equal to the sum of:
- 10% of the amount paid or incurred for qualified energy efficiency improvements installed during 2011,
and
- Any residential energy property costs paid or incurred in
2011.
There is a lifetime limit of $500 for all years after 2005, of which only $200 can be for windows; $50 for any advanced main air circulating fan; $150 for any qualified natural gas, propane, or oil furnace or hot water boiler; and $300 for any item of energy efficient building
property.
 | If the total of nonbusiness energy property credits you have taken in previous years (after 2005) is more than $500, you cannot take this credit in
2011. |
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 electric 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 $28,250 ($42,375 if head of household; $56,500 if married filing
jointly).
- The person(s) who made the qualified contribution or elective deferral (a) was born after January 1, 1994, (b) is claimed as a dependent on someone else's 2011 tax return, or (c) was a student (defined
next).
You were a student if during any part of 5 calendar months of 2011 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.
taxmap/pub17/p17-186.htm#en_us_publink1000260895For more information on the credit, see the instructions for Form
8880.
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