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

Chapter 37
Other Credits(p244)

What's New(p244)


taxmap/pub17/p17-186.htm#en_us_publink1000272991
Adoption credit.(p244)
The maximum adoption credit is $12,970 for 2013. See Adoption Credit.
taxmap/pub17/p17-186.htm#en_us_publink1000307751
Plug-in electric vehicle credit.(p244)
This credit has expired.
taxmap/pub17/p17-186.htm#en_us_publink1000307752
Credit for prior year minimum tax.(p244)
The refundable portion of the credit for prior year minimum tax has expired.
taxmap/pub17/p17-186.htm#en_us_publink1000262520
Excess withholding of social security and railroad retirement tax.(p244)
Social security tax and tier 1 railroad retirement (RRTA) tax were both withheld during 2013 at a rate of 6.2% of wages up to $113,700. If you worked for more than one employer and had too much social security or RRTA tax withheld during 2013, you may be entitled to a credit for the excess withholding. See Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld.
taxmap/pub17/p17-186.htm#en_us_publink1000177264
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.(p244)

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.(p244)

rule
The second part of this chapter, Refundable Credits, covers three 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#TXMP124e8745

Useful items

You may want to see:


Publication
 502 Medical and Dental Expenses
 514 Foreign Tax Credit for
Individuals

 530 Tax Information for Homeowners
 590 Individual Retirement Arrangements (IRAs)
Form (and Instructions)
 1116: Foreign Tax Credit
 2439: Notice to Shareholder of Undistributed Long-Term Capital Gains
 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
 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
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Nonrefundable Credits(p244)

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.
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Adoption Credit(p244)

rule
You may be able to take a tax credit of up to $12,970 for qualified expenses paid to adopt an eligible child. The credit may be allowed for the adoption of a child with special needs even if you do not have any qualified expenses.
If your modified adjusted gross income (AGI) is more than $194,580, your credit is reduced. If your modified AGI is $234,580 or more, you cannot take the credit.
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Qualified adoption expenses.(p244)

rule
Qualified adoption expenses are reasonable and necessary expenses directly related to, and whose principal purpose is for, the legal adoption of an eligible child. These expenses include:
taxmap/pub17/p17-186.htm#en_us_publink1000272998
Nonqualified expenses.(p244)
Qualified adoption expenses do not include expenses:
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Eligible child.(p244)

rule
The term "eligible child" means any individual:
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Child with special needs.(p244)
An eligible child is a child with special needs if all three of the following apply.
  1. The child was a citizen or resident of the United States (including U.S. possessions) at the time the adoption process began.
  2. A state (including the District of Columbia) has determined that the child cannot or should not be returned to his or her parents' home.
  3. The state has determined that the child will not be adopted unless assistance is provided to the adoptive parents. Factors used by states to make this determination include:
    1. The child's ethnic background,
    2. The child's age,
    3. Whether the child is a member of a minority or sibling group, and
    4. Whether the child has a medical condition or a physical, mental, or emotional handicap.
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When to take the credit.(p245)

rule
Generally, until the adoption becomes final, you take the credit in the year after your qualified expenses were paid or incurred. If the adoption becomes final, you take the credit in the year your expenses were paid or incurred. See the Instructions for Form 8839 for more specific information on when to take the credit.
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Foreign child.(p245)
If the child is not a U.S. citizen or resident at the time the adoption process began, you cannot take the credit unless the adoption becomes final. You treat all adoption expenses paid or incurred in years before the adoption becomes final as paid or incurred in the year it becomes final.
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How to take the credit.(p245)

rule
Figure your 2013 nonrefundable credit and any carryforward to 2014 on Form 8839 and attach it to your Form 1040. Include the credit in your total for Form 1040, line 53. Check box c and enter "8839" on the line next to that box.
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More information.(p245)

rule
For more information, see the Instructions for Form 8839.
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Alternative Motor Vehicle Credit(p245)

rule
You may be able to take this credit if you place a qualified fuel cell vehicle in service in 2013.
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Amount of credit.(p245)

rule
Generally, you can rely on the manufacturer's certification to the IRS 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 to the IRS.
Ordinarily the amount of the credit is 100% of the manufacturer's (or domestic distributor's) certification to the IRS of the maximum credit allowable.
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How to take the credit.(p245)

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.
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More information.(p245)

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(p245)

rule
You may be able to take a credit if you place qualified alternative fuel vehicle refueling property in service in 2013.
taxmap/pub17/p17-186.htm#en_us_publink1000174924

Qualified alternative fuel vehicle refueling property.(p245)

rule
Qualified alternative fuel vehicle refueling property is any property (other than a building or its structural components) used for either of the following.
The following are alternative fuels.
taxmap/pub17/p17-186.htm#en_us_publink1000174926

Amount of the credit.(p245)

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.
taxmap/pub17/p17-186.htm#en_us_publink1000174927

How to take the credit.(p245)

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.(p245)

rule
For more information on the credit, see the Form 8911 instructions.
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Credit to Holders of Tax Credit Bonds(p245)

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.
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Interest income.(p245)

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.(p245)

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.(p245)

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

Foreign Tax Credit(p245)

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.
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Limit on the credit.(p245)

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.(p245)

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.(p245)
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.(p245)

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(p245)

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.(p245)

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.
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Amount of credit.(p245)

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 
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Limit based on credit rate.(p246)

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.
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Carryforward.(p246)

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.(p246)

rule
Figure your 2013 credit and any carryforward to 2014 on Form 8396, and attach it to your Form 1040. Be sure to include any credit carryforward from 2010, 2011, and 2012.
Include the credit in your total for Form 1040, line 53. Check box c and enter "8396" on the line next to that box.
taxmap/pub17/p17-186.htm#en_us_publink1000174946

Reduced home mortgage interest deduction.(p246)

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 2014. 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.(p246)

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 the Instructions for Form 8828 and chapter 15 for more information.
taxmap/pub17/p17-186.htm#en_us_publink1000260892

More information.(p246)

rule
For more information on the credit, see the Form 8396 instructions.
taxmap/pub17/p17-186.htm#en_us_publink1000174949

Nonrefundable Credit for Prior Year Minimum Tax(p246)

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 2012 you had:
taxmap/pub17/p17-186.htm#en_us_publink1000174952

How to take the credit.(p246)

rule
Figure your 2013 nonrefundable credit (if any), and any carryforward to 2014 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.(p246)

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(p246)

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 or a qualified two- or three-wheeled plug-in electric vehicle in 2013 and you meet some other requirements.
taxmap/pub17/p17-186.htm#en_us_publink1000296807

Qualified plug-in electric drive motor vehicle.(p246)

rule
This is a new vehicle with at least four wheels that:
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Qualified two- or three-wheeled plug-in electric vehicle.(p246)

rule
This is a new vehicle with two or three wheels that:
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Certification and other requirements. (p246)

rule
Generally, you can rely on the manufacturer's (or, in the case of a foreign manufacturer, its domestic distributor's) certification to the IRS that a specific make, model, and model year vehicle qualifies for the credit and, if applicable, the amount of the credit for which it qualifies. However, if the IRS publishes an announcement that the certification for any specific make, model, and model year vehicle has been withdrawn, you cannot rely on the certification for such a vehicle purchased after the date of publication of the withdrawal announcement.
The following requirements must also be met to qualify for the credit.
taxmap/pub17/p17-186.htm#en_us_publink1000210771

How to take the credit.(p246)

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.(p246)

rule
For more information on the credit, see the Form 8936 instructions.
taxmap/pub17/p17-186.htm#en_us_publink1000174954

Residential Energy Credits(p246)

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 2013.
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_publink1000296821

Nonbusiness energy property credit.(p246)

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 2013, and
  2. Any residential energy property costs paid or incurred in 2013.
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 2013.
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.(p247)

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.(p247)

rule
You must reduce the basis of your home by the amount of any credit allowed.
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How to take the credit.(p247)

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.(p247)

rule
For more information on these credits, see the Form 5695 instructions.
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Retirement Savings Contributions Credit (Saver's Credit)(p247)

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 $29,500 ($44,250 if head of household; $59,000 if married filing jointly).
  2. The person(s) who made the qualified contribution or elective deferral (a) was born after January 1, 1996, (b) is claimed as a dependent on someone else's 2013 tax return, or (c) was a student (defined next).
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Student.(p247)

rule
You were a student if during any part of 5 calendar months of 2013 you:
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School.(p247)
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.(p247)

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.(p247)

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