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Publication 17
taxmap/pub17/p17-186.htm#en_us_publink1000174891

Chapter 36
Other Credits(p254)

What's New(p254)


taxmap/pub17/p17-186.htm#en_us_publink1000262876
First-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.
taxmap/pub17/p17-186.htm#en_us_publink1000262877
Repayment of first-time homebuyer credit.(p254)
If you have to repay the credit, you may be able to do it without filing Form 5405. See First-Time Homebuyer Credit.
taxmap/pub17/p17-186.htm#en_us_publink1000250489
Alternative motor vehicle credit.(p254)
You cannot claim this credit for a vehicle you bought in 2011, unless the vehicle is a new fuel cell motor vehicle. See Alternative Motor Vehicle Credit.
taxmap/pub17/p17-186.htm#en_us_publink1000260788
Alternative fuel vehicle refueling property credit.(p254)
Generally, this credit is less for property placed in service after 2010. See Alternative Fuel Vehicle Refueling Property Credit.
taxmap/pub17/p17-186.htm#en_us_publink1000259685
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.
taxmap/pub17/p17-186.htm#en_us_publink1000174893
Adoption credit.(p254)
The maximum adoption credit increases to $13,360. See Adoption Credit for more information.
taxmap/pub17/p17-186.htm#en_us_publink1000259684
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.
taxmap/pub17/p17-186.htm#en_us_publink1000259683
Making Work Pay Credit.(p254)
This credit has expired. You cannot claim it on your 2011 return.
taxmap/pub17/p17-186.htm#en_us_publink1000262520
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.
taxmap/pub17/p17-186.htm#TXMP51bd4fef
This chapter discusses the following nonrefundable credits.
This chapter also discusses the following refundable credits.
Several other credits are discussed in other chapters in this publication.
taxmap/pub17/p17-186.htm#en_us_publink1000174903

Nonrefundable credits.(p254)

rule
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_publink1000174904

Refundable credits.(p254)

rule
The 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#TXMP074d9d72

Useful 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_publink1000174905

Nonrefundable Credits(p254)

rule
The 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_publink1000174914

Alternative Motor Vehicle Credit(p254)

rule
You 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_publink1000174916

Amount of credit.(p254)

rule
Generally, 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_publink1000174921

How to take the credit.(p254)

rule
To 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_publink1000174922

More information.(p255)

rule
For more information on the credit, see the instructions for Form 8910.
taxmap/pub17/p17-186.htm#en_us_publink1000174923

Alternative Fuel Vehicle Refueling Property Credit(p255)

rule
You 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_publink1000174924

Qualified alternative fuel vehicle refueling property.(p255)

rule
Qualified 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.
taxmap/pub17/p17-186.htm#en_us_publink1000174926

Amount of the credit.(p255)

rule
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_publink1000174927

How to take the credit.(p255)

rule
To 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_publink1000174928

More information.(p255)

rule
For more information on the credit, see the instructions for Form 8911.
taxmap/pub17/p17-186.htm#en_us_publink1000174929

Credit to Holders of Tax Credit Bonds(p255)

rule
Tax 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.
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_publink1000174930

Interest income.(p255)

rule
The 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_publink1000174931

How to take the credit.(p255)

rule
Complete 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_publink1000174932

More information.(p255)

rule
For more information, see the instructions for Form 8912.
taxmap/pub17/p17-186.htm#en_us_publink1000174933

Foreign Tax Credit(p255)

rule
You 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.
  1. Foreign earned income exclusion.
  2. Foreign housing exclusion.
  3. Income from Puerto Rico exempt from U.S. tax.
  4. Possession exclusion.
taxmap/pub17/p17-186.htm#en_us_publink1000174935

Limit on the credit.(p255)

rule
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.
taxmap/pub17/p17-186.htm#en_us_publink1000174937

How to take the credit.(p255)

rule
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_publink1000174938
Exception.(p255)
You do not have to complete Form 1116 to take the credit if all of the following apply.
  1. 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).
  2. If you had dividend income from shares of stock, you held those shares for at least 16 days.
  3. You are not filing Form 4563 or excluding income from sources within Puerto Rico.
  4. The total of your foreign taxes was not more than $300 (not more than $600 if married filing jointly).
  5. All of your foreign taxes were:
    1. Legally owed and not eligible for a refund, and
    2. Paid to countries that are recognized by the United States and do not support terrorism.
taxmap/pub17/p17-186.htm#en_us_publink1000260891

More information.(p255)

rule
For more information on the credit and these requirements, see the instructions for Form 1116.
taxmap/pub17/p17-186.htm#en_us_publink1000174939

Mortgage Interest Credit(p255)

rule
The 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_publink1000174940

Who qualifies.(p255)

rule
You 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_publink1000174941

Amount of credit.(p255)

rule
Figure 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_publink1000174943

Limit based on credit rate.(p255)

rule
If 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_publink1000174944

Carryforward.(p255)

rule
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

How to take the credit.(p255)

rule
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_publink1000174946

Reduced home mortgage interest deduction.(p255)

rule
If 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.
taxmap/pub17/p17-186.htm#en_us_publink1000174948

Recapture of federal mortgage subsidy.(p256)

rule
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.
taxmap/pub17/p17-186.htm#en_us_publink1000260892

More information.(p256)

rule
For more information on the credit, see the instructions for Form 8828.
taxmap/pub17/p17-186.htm#en_us_publink1000174949

Nonrefundable Credit for Prior Year Minimum Tax(p256)

rule
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 2010 you had:
taxmap/pub17/p17-186.htm#en_us_publink1000174950

Refundable credit.(p256)

rule
If you had a minimum tax credit carryforward to 2009 (on your 2008 Form 8801, line 31), you may qualify for a refund of that credit amount. For more information, see Refundable Credit for Prior Year Minimum Tax, later.
taxmap/pub17/p17-186.htm#en_us_publink1000174952

How to take the credit.(p256)

rule
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_publink1000174953

More information.(p256)

rule
For more information on the credit, see the instructions for Form 8801.
taxmap/pub17/p17-186.htm#en_us_publink1000210768

Plug-in Electric Drive Motor Vehicle Credit(p256)

rule
You 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_publink1000210769

Amount of credit.(p256)

rule
The 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_publink1000210770

Qualified vehicle.(p256)

rule
A qualified plug-in electric drive motor vehicle is a motor vehicle the original use of which starts with you and that:
  1. Has at least four wheels,
  2. Is acquired for your use or to lease to others and not for resale,
  3. Is made by a manufacturer,
  4. Is manufactured primarily for use on public streets, roads, and highways,
  5. Has a gross vehicle weight of less than 14,000 pounds,
  6. Is a motor vehicle for purposes of the Clean Air Act, and
  7. Is propelled to a significant extent by an electric motor that draws electricity from a battery that:
    1. Has a capacity of at least 4 kilowatt hours, and
    2. Is capable of being recharged from an external source of electricity.
taxmap/pub17/p17-186.htm#en_us_publink1000210771

How to take the credit.(p256)

rule
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_publink1000260893

More information.(p256)

rule
For more information on the credit, see the instructions for Form 8936.
taxmap/pub17/p17-186.htm#en_us_publink1000210772

Plug-in Electric Vehicle Credit(p256)

rule
You 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_publink1000210773

Amount of credit.(p256)

rule
The credit is 10% of the cost of the vehicle, limited to $2,500 per vehicle.
taxmap/pub17/p17-186.htm#en_us_publink1000210774

Qualified vehicle.(p256)

rule
A qualified plug-in electric vehicle is a motor vehicle the original use of which starts with you and that:
  1. Is acquired for your use or to lease to others and not for resale,
  2. Is made by a manufacturer,
  3. Is manufactured primarily for use on public streets, roads, and highways,
  4. 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,
  5. Is a low speed vehicle if it has 4 wheels, and
  6. Is propelled to a significant extent by an electric motor that draws electricity from a battery that:
    1. 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
    2. Can be recharged from an external source of electricity.
taxmap/pub17/p17-186.htm#en_us_publink1000210775

How to take the credit.(p256)

rule
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_publink1000260894

More information.(p256)

rule
For more information on the credit, see the instructions for Form 8834.
taxmap/pub17/p17-186.htm#en_us_publink1000174954

Residential Energy Credits(p256)

rule
You 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.
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_publink1000209300

Nonbusiness energy property credit.(p256)

rule
You may be able to take a credit equal to the sum of:
  1. 10% of the amount paid or incurred for qualified energy efficiency improvements installed during 2011, and
  2. 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.
EIC
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.
Residential energy property is any of the following.
taxmap/pub17/p17-186.htm#en_us_publink1000209301

Residential energy efficient property credit.(p257)

rule
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_publink1000174957

Basis reduction.(p257)

rule
You must reduce the basis of your home by the amount of any credit allowed.
taxmap/pub17/p17-186.htm#en_us_publink1000174958

How to take the credit.(p257)

rule
Complete Form 5695 and attach it to your Form 1040. Enter the credit on Form 1040, line 52.
taxmap/pub17/p17-186.htm#en_us_publink1000174959

More information.(p257)

rule
For more information on this credit, see the instructions for Form 5695.
taxmap/pub17/p17-186.htm#en_us_publink1000174960

Retirement Savings Contributions Credit (Saver's Credit)(p257)

rule
You may be able to take this credit if you, or your spouse if filing jointly, made:
However, you cannot take the credit if either of the following applies.
  1. 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).
  2. 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).
taxmap/pub17/p17-186.htm#en_us_publink1000174961

Student.(p257)

rule
You were a student if during any part of 5 calendar months of 2011 you:
taxmap/pub17/p17-186.htm#en_us_publink1000174962
School.(p257)
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_publink1000174963

How to take the credit.(p257)

rule
Figure 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_publink1000260895

More information.(p257)

rule
For more information on the credit, see the instructions for Form 8880.