16343: 8936 - Qualified Plug-in Electric Drive Motor Vehicle Credit

Form 8936 in 1040 or 1041

In a 1040 or 1041 return, use screens 8936 and 936A to enter clean vehicle information. Be sure to enter all relevant information in order for the credit to be calculated and display accurately. You can Page Down to create additional instances of screen 936A to enter additional vehicles. 

Note that if you are entering information for a New Clean Vehicle on screen 936A > Part II, the Tentative credit amount must be retrieved from the website (link included at the top right of the screen) and entered on the 936A screen > line 9.

Business or Investment Use

If the vehicle was used wholly or partially for business, enter the Business/investment use percentage. If no entry is made, this will default to 0% business use (100% personal use) and Part III will calculate the allowable amount based on tax liability.

Note: There is no carryover of a the disallowed amount for personal use. Per the instructions, "If you cannot use part of the personal portion of the credit because of the tax liability limit, the unused credit is lost. The unused personal portion of the credit cannot be carried back or forward to other tax years."

If used for business, the credit may be carried forward on Form 3800 along with any other business credits. See below for information about Qualified Plug-in Electric Drive Motor Vehicle Credit amounts if the taxpayer is a partner or shareholder in a partnership or S corp. 

1120

Use screen 8936 to enter information for a clean vehicle credit. Page Down to create additional screens as needed. In view mode, review Form 8936, 8936 - Sch A and Form 3800. 

Pass-through Credits in a 1040 or 1041

Individual taxpayers are not required to complete or file Form 8936 on their return if they received the credit from a partnership or s-corporation. If this is the case, enter the amount and code in the drop list on the K1P or K1S screen, as applicable. For a K1P, box 15, code PU. For a K1S, box 13, code PU. This entry is not limited by the program as it should have been determined at the partnership/S corp level. The amount will flow to Form 3800, page 3, part III, line 1y. Any amount that cannot be taken in the current year will be calculated and display on Wks 3800 to carryover to a future year. 

Form 8936 in 1120-S or 1065

Partnerships and S corporations must file Form 8936 to claim the credit. Drake Tax does not support the creation of Form 8936 in a 1065 or 1120-S return. You must manually complete Form 8936 from the IRS website to figure the amount that is allowed to be passed through to the partners or shareholders. Once you have figured the credit amount, enter this amount on the Schedule K screen > Credits tab > Line 15P for 1065 or Line 13P for 1120-S return.

This will then flow to Schedule K and be passed out to the partners or shareholders on Schedule K-1 based on their partnership or ownership percentages. 

Once the credit has been entered, Form 8936 needs to be attached to the return as a manual PDF attachment by using the PDF screen. See Related Links below for instructions on PDF attachments.