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Publication 17
taxmap/pub17/p17-188.htm#en_us_publink1000174891

Chapter 38
Other Credits(p243)


What's New(p243)


EIC
At the time this publication was prepared for printing, Congress was considering legislation that could affect many of the credits discussed in this chapter. To see if the legislation was enacted, go to www.irs.gov/pub17.
taxmap/pub17/p17-188.htm#en_us_publink1000272991
Adoption credit.(p243)
The maximum adoption credit is $13,400 for 2015. See Adoption Credit.
taxmap/pub17/p17-188.htm#en_us_publink1000262520
Excess withholding of social security and railroad retirement tax.(p243)
Social security tax and tier 1 railroad retirement (RRTA) tax were both withheld during 2015 at a rate of 6.2% of wages up to $118,500. If you worked for more than one employer and had too much social security or RRTA tax withheld during 2015, 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/p17-188.htm#en_us_publink100036050
Alternative fuel vehicle refueling credit.(p243)
The credit for alternative fuel vehicle refueling property has expired. You can't claim this credit for alternative fuel vehicle refueling property placed in service after 2014. However, a partner in a fiscal year partnership or shareholder of a fiscal year S corporation may receive an alternative fuel vehicle refueling property credit that must be reported on a 2015 return.
taxmap/pub17/p17-188.htm#en_us_publink100036051
Alternative motor vehicle credit.(p243)
The alternative motor vehicle credit has expired for vehicles purchased after 2014. However, if you purchased the vehicle before 2015, but placed it in service during 2015, you may still be able to claim the credit for 2015. Don't report vehicles purchased after 2014 on Form 8910 unless the credit is extended.
taxmap/pub17/p17-188.htm#en_us_publink100036052
Residential energy credit.(p243)
The nonbusiness energy property credit has expired. You can't claim this credit for nonbusiness energy property placed in service after 2014. You may, however, still be able to claim the residential energy efficient property credit.
taxmap/pub17/p17-188.htm#en_us_publink100036053
Plug-in electric drive motor vehicle credit.(p243)
The credit for qualified two- or three-wheeled plug-in electric vehicles acquired after 2013 has expired.
taxmap/pub17/p17-188.htm#en_us_publink100036054
Health coverage tax credit.(p243)
The health coverage tax credit, which expired at the end of 2013 has been reinstated. For 2015, if you were an eligible trade adjustment assistance (TAA) recipient, alternative TAA recipient, reemployment TAA recipient, Pension Benefit Guarantee pension payee, or qualifying family member, you may be able to take the HCTC for health insurance coverage purchased through a Health Insurance Marketplace. Eligibility for the HCTC is generally the same as in 2013 with the following changes.
  • The HCTC is now an election. Once you make the election to take the HCTC for a month, the election will apply to all subsequent months during your tax year unless you no longer qualify to take the HCTC. See How to take the credit under Health Coverage Tax Credit, below.
  • For 2015, you can take the HCTC for a qualified health plan purchased through a Health Insurance Marketplace. This insurance coverage also qualifies for the premium tax credit taken on Form 8962, Premium Tax Credit (PTC). You can’t take both the HCTC and PTC for the same qualified health plan in the same coverage month. For information on qualified health plans purchased through a Health Insurance Marketplace and the premium tax credit, see the Instructions for Form 8962.
taxmap/pub17/p17-188.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/p17-188.htm#en_us_publink1000174903

Nonrefundable credits.(p243)

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 isn't refunded to you.
taxmap/pub17/p17-188.htm#en_us_publink1000174904

Refundable credits.(p243)

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 may be refunded to you.

taxmap/pub17/p17-188.htm#TXMP0b514dd7

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-A Contributions to Individual Retirement Arrangements (IRAs)
 590-B Distributions from Individual Retirement Arrangements (IRAs)
Form (and Instructions)
 1116: Foreign Tax Credit
 2439: Notice to Shareholder of Undistributed Long-Term Capital Gains
 5695: Residential Energy Credit
 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
taxmap/pub17/p17-188.htm#en_us_publink1000174999

Nonrefundable Credits(p243)

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 isn't refunded to you.
taxmap/pub17/p17-188.htm#en_us_publink1000272996

Adoption Credit(p243)

rule
You may be able to take a tax credit of up to $13,400 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 don't have any qualified expenses.
If your modified adjusted gross income (AGI) is more than $201,010, your credit is reduced. If your modified AGI is $241,010 or more, you can't take the credit.
taxmap/pub17/p17-188.htm#en_us_publink1000272997

Qualified adoption expenses.(p243)

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/p17-188.htm#en_us_publink1000272998
Nonqualified expenses.(p244)
Qualified adoption expenses don't include expenses:
taxmap/pub17/p17-188.htm#en_us_publink1000272999

Eligible child.(p244)

rule
The term "eligible child" means any individual:
taxmap/pub17/p17-188.htm#en_us_publink1000273000
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 can't or shouldn't be returned to his or her parents' home.
  3. The state has determined that the child won't 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.
taxmap/pub17/p17-188.htm#en_us_publink1000273001

When to take the credit.(p244)

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.
taxmap/pub17/p17-188.htm#en_us_publink1000273002
Foreign child.(p244)
If the child isn't a U.S. citizen or resident at the time the adoption process began, you can't 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.
taxmap/pub17/p17-188.htm#en_us_publink1000273007

How to take the credit.(p244)

rule
Figure your 2015 nonrefundable credit and any carryforward to 2016 on Form 8839 and attach it to your Form 1040. Include the credit in your total for Form 1040, line 54. Check box c and enter "8839" on the line next to that box.
taxmap/pub17/p17-188.htm#en_us_publink1000273008

More information.(p244)

rule
For more information, see the Instructions for Form 8839.
taxmap/pub17/p17-188.htm#en_us_publink1000174914

Alternative Motor Vehicle Credit(p244)

rule
An alternative motor vehicle is a vehicle with at least four wheels that qualifies as a qualified fuel cell vehicle. You may be able to take this credit if you are the owner of a qualified fuel cell vehicle and placed it in service in 2015.
EIC
The alternative motor vehicle credit has expired for vehicles purchased after 2014. However, if you purchased the vehicle before 2015, but placed it in service during 2015, you may still be able to claim the credit for 2015. At the time these instructions went to print, Congress had not enacted legislation on expired provisions. To find out if legislation has been enacted, go to www.irs.gov/pub17.
taxmap/pub17/p17-188.htm#en_us_publink100036057

Qualified fuel cell vehicle.(p244)

rule
A qualified fuel cell vehicle is a new vehicle propelled by power derived from one or more cells that convert chemical energy directly into electricity by combining oxygen with hydrogen fuel, and that meets certain additional requirements.
taxmap/pub17/p17-188.htm#en_us_publink1000174916

Amount of credit.(p244)

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.
taxmap/pub17/p17-188.htm#en_us_publink1000174921

How to take the credit.(p244)

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 54. Check box c and enter "8910" on the line next to that box.
taxmap/pub17/p17-188.htm#en_us_publink1000174922

More information.(p244)

rule
For more information on the credit, see the Instructions for Form 8910.
taxmap/pub17/p17-188.htm#en_us_publink1000174923

Alternative Fuel Vehicle Refueling Property Credit(p244)

rule
The credit for alternative fuel vehicle refueling property has expired. You can't claim this credit for alternative fuel vehicle refueling property placed in service after 2014. However, a partner in a fiscal year partnership or shareholder of a fiscal year S corporation may receive an alternative fuel vehicle refueling property credit that must be reported on a 2015 return.
taxmap/pub17/p17-188.htm#en_us_publink1000174924

Qualified alternative fuel vehicle refueling property.(p244)

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 that tank.
An alternative fuel is a fuel at least 85% of the volume of which consists of hydrogen.
EIC
The credit has expired for alternative fuel vehicle refueling property placed in service after 2014. At the time this publication went to print, Congress had not enacted legislation on expired provisions. To find out if legislation has been enacted, go to www.irs.gov/pub17.
taxmap/pub17/p17-188.htm#en_us_publink1000174926

Amount of the credit.(p244)

rule
For business use property, the credit is generally the smaller of 30% of the property's cost or $30,000.
taxmap/pub17/p17-188.htm#en_us_publink1000174927

How to take the credit.(p244)

rule
Recipients of these credits that are partnerships or S corporations must report these amounts on line 8 of Form 8911. See Form 8911 and its instructions for more information.
taxmap/pub17/p17-188.htm#en_us_publink1000174928

More information.(p244)

rule
For more information on the credit, see the Instructions for Form 8911.
taxmap/pub17/p17-188.htm#en_us_publink1000174929

Credit to Holders of Tax Credit Bonds(p244)

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 can't also claim a credit.
taxmap/pub17/p17-188.htm#en_us_publink1000174930

Interest income.(p244)

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/p17-188.htm#en_us_publink1000174931

How to take the credit.(p244)

rule
Complete Form 8912 and attach it to your Form 1040. Include the credit in your total for Form 1040, line 54. Check box c and enter "8912" on the line next to that box.
taxmap/pub17/p17-188.htm#en_us_publink1000174932

More information.(p244)

rule
For more information, see the Instructions for Form 8912.
taxmap/pub17/p17-188.htm#en_us_publink1000174933

Foreign Tax Credit(p244)

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 can't 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/p17-188.htm#en_us_publink1000174935

Limit on the credit.(p245)

rule
Unless you can elect not to file Form 1116 (see Exception), your foreign tax credit can't be more than your U.S. tax liability (line 47), 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 Pub. 514 for more information.
taxmap/pub17/p17-188.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 48.
taxmap/pub17/p17-188.htm#en_us_publink1000174938
Exception.(p245)
You don't 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. You held the stock or bonds on which the dividends and interest were paid for at least 16 days and weren't obligated to pay these amounts to someone else.
  3. You aren't filing Form 4563 or excluding income from sources within Puerto Rico.
  4. The total of your foreign taxes wasn't 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 or reduced tax rate under a tax treaty, and
    2. Paid to countries that are recognized by the United States and don't support terrorism.
taxmap/pub17/p17-188.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/p17-188.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/p17-188.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.
taxmap/pub17/p17-188.htm#en_us_publink1000174941

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 
taxmap/pub17/p17-188.htm#en_us_publink1000174943

Limit based on credit rate.(p245)

rule
If the certificate credit rate is more than 20%, the credit you are allowed can't 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 Pub. 530 for more information.
taxmap/pub17/p17-188.htm#en_us_publink1000174944

Carryforward.(p245)

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 can't carry forward any amount more than $2,000 (or your share of the $2,000 if you must divide the credit).
taxmap/pub17/p17-188.htm#en_us_publink1000174945

How to take the credit.(p245)

rule
Figure your 2015 credit and any carryforward to 2016 on Form 8396, and attach it to your Form 1040. Be sure to include any credit carryforward from 2012, 2013, and 2014.
Include the credit in your total for Form 1040, line 54. Check box c and enter "8396" on the line next to that box.
taxmap/pub17/p17-188.htm#en_us_publink1000174946

Reduced home mortgage interest deduction.(p245)

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 2016. For more information about the home mortgage interest deduction, see chapter 23.
taxmap/pub17/p17-188.htm#en_us_publink1000174948

Recapture of federal mortgage subsidy.(p245)

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/p17-188.htm#en_us_publink1000260892

More information.(p245)

rule
For more information on the credit, see the Instructions for Form 8396.
taxmap/pub17/p17-188.htm#en_us_publink1000174949

Nonrefundable Credit for Prior Year Minimum Tax(p245)

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 2014 you had:
taxmap/pub17/p17-188.htm#en_us_publink1000174952

How to take the credit.(p245)

rule
Figure your 2015 nonrefundable credit (if any), and any carryforward to 2016 on Form 8801, and attach it to your Form 1040. Include the credit in your total for Form 1040, line 54, 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/p17-188.htm#en_us_publink1000174953

More information.(p245)

rule
For more information on the credit, see the Instructions for Form 8801.
taxmap/pub17/p17-188.htm#en_us_publink1000210768

Plug-in Electric Drive Motor Vehicle Credit(p245)

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 2015 and you meet some other requirements.
taxmap/pub17/p17-188.htm#en_us_publink1000296807

Qualified plug-in electric drive motor vehicle.(p245)

rule
This is a new vehicle with at least four wheels that:
taxmap/pub17/p17-188.htm#en_us_publink1000296897

Certification and other requirements. (p245)

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 can't 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/p17-188.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 54. Check box c and enter "8936" on the line next to that box.
taxmap/pub17/p17-188.htm#en_us_publink1000260893

More information.(p246)

rule
For more information on the credit, see the Instructions for Form 8936.
taxmap/pub17/p17-188.htm#en_us_publink1000174954

Residential Energy Credit(p246)

rule
You may be able to take the residential energy efficient property credit if you made energy saving improvements to your home located in the United States in 2015.
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.
taxmap/pub17/p17-188.htm#en_us_publink1000209301

Residential energy efficient property credit.(p246)

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.
EIC
At the time this publication was prepared for printing, Congress was considering legislation that would extend the nonbusiness energy property credit, which expired at the end of 2014. To see if the legislation was enacted, go to www.irs.gov/pub17.
taxmap/pub17/p17-188.htm#en_us_publink1000174957

Basis reduction.(p246)

rule
You must reduce the basis of your home by the amount of any credit allowed.
taxmap/pub17/p17-188.htm#en_us_publink1000174958

How to take the credit.(p246)

rule
Complete Form 5695 and attach it to your Form 1040. Enter the credit on Form 1040, line 53.
taxmap/pub17/p17-188.htm#en_us_publink1000174959

More information.(p246)

rule
For more information on the credit, see the Instructions for Form 5695.
taxmap/pub17/p17-188.htm#en_us_publink1000174960

Retirement Savings Contributions Credit (Saver's Credit)(p246)

rule
You may be able to take this credit if you, or your spouse if filing jointly, made:
However, you can't 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 $30,500 ($45,750 if head of household; $61,000 if married filing jointly).
  2. The person(s) who made the qualified contribution or elective deferral: (a) was born after January 1, 1998, (b) is claimed as a dependent on someone else's 2015 tax return, or (c) was a student (defined next).
taxmap/pub17/p17-188.htm#en_us_publink1000174961

Student.(p246)

rule
You were a student if during any part of five calendar months of 2015 you:
taxmap/pub17/p17-188.htm#en_us_publink1000174962
School.(p246)
A school includes a technical, trade, or mechanical school. It doesn't include an on-the-job training course, correspondence school, or school offering courses only through the Internet.
taxmap/pub17/p17-188.htm#en_us_publink1000174963

How to take the credit.(p246)

rule
Figure the credit on Form 8880. Enter the credit on your Form 1040, line 51, or your Form 1040A, line 34, and attach Form 8880 to your return.
taxmap/pub17/p17-188.htm#en_us_publink1000260895

More information.(p246)

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