What the Form Is For

Form 8936 is the IRS form used to claim the Qualified Plug-in Electric Drive Motor Vehicle Credit, which gives taxpayers up to $7,500 in federal tax savings for purchasing a qualifying electric vehicle (EV).

The credit is based on your EV’s battery capacity:

• Base credit: $2,917 for the first 5 kilowatt-hours (kWh)
• Plus $417 for each additional kWh above 5

Vehicles with large batteries can reach the maximum $7,500 credit.

This credit is non-refundable — it can reduce your tax bill to zero, but it won’t generate a refund beyond what you owe. IRS.gov

When You’d Use It (Including Late and Amended Returns)

You must file Form 8936 with your 2022 federal tax return if you took possession of a qualifying EV during 2022.
The date of delivery, not the date of purchase, determines eligibility.

• If you missed claiming the credit:
  You can file an amended return (Form 1040-X) to claim it.
  The deadline to amend your 2022 return is April 15, 2026, or three years after you filed, whichever is later.
• Special timing rule for 2022:
  • If you signed a binding purchase contract between Jan 1 and Aug 15, 2022, but took delivery on or after Aug 16, you can still use the pre–Inflation Reduction Act rules (no North American assembly requirement).
  • If you purchased after Aug 16, 2022, your vehicle must have final assembly in North America to qualify. IRS.gov

Key Rules for 2022

Vehicle Requirements

• Must be new (original use begins with you)
• Must have 4 or more wheels and weigh under 14,000 lbs
• Must be rechargeable from an external electricity source
• Must have a battery capacity of at least 4 kWh

Purchase Requirements

• You must be the owner (not a lessee — only lessors can claim the credit)
• Vehicle must be for your own use, not for resale
• Must be used primarily in the U.S.

Manufacturer Phase-out

• Tesla: No credit for vehicles purchased after Dec 31, 2019
• General Motors (Chevrolet, Cadillac, etc.): No credit after Mar 31, 2020

August 16, 2022 Rule Change

For vehicles purchased and delivered after August 16, 2022, final assembly must occur in North America.
Check your vehicle’s VIN using the Department of Energy’s VIN Decoder Tool.

Step-by-Step: How to Complete Form 8936 (High Level)

Step 1: Gather Your Documentation

• Vehicle VIN (Vehicle Identification Number)
• Manufacturer’s certification letter showing your vehicle’s eligible credit
• Purchase documentation (contract and delivery date)

Step 2: Complete Part I (Tentative Credit)

• Enter the make, model, year, and VIN
• Line 4a: Enter the maximum credit from the manufacturer
• Line 4b: If Tesla or GM (phase-out), apply the reduced percentage (50% or 25%)
• Most 2022 vehicles not phased out = 100% credit

Step 3: Determine Business vs. Personal Use

• Line 5: Enter percentage of business use (0% for personal, 100% for business)
• Line 7: Include any Section 179 deduction claimed for the vehicle

Step 4: Calculate the Credit

• The credit splits into business and personal portions:
  • Business portion: Flows to Form 3800 (General Business Credit)
  • Personal portion: Goes to Schedule 3 (Form 1040)

Step 5: Attach and File

Attach Form 8936 to your Form 1040 by the tax deadline (April 15, 2023, or October 15 if extended).

Common Mistakes and How to Avoid Them

• Claiming ineligible manufacturers
  • Tesla and GM vehicles didn’t qualify in 2022.
  • Check the IRS list of manufacturers that have reached the 200,000-vehicle limit.
• Missing or incorrect VIN
  • The full 17-character VIN is required on line 2.
  • Double-check it from your title, registration, or insurance card.
• Ignoring the August 16 rule
  • Vehicles delivered after that date must have North American final assembly.
  • Verify your VIN through the DOE database.
• Claiming as a lessee
  • Only owners qualify. If you lease, the leasing company gets the credit.
  • Ask whether the lessor applied the credit to reduce your lease cost.
• Not reducing your vehicle’s basis
  • The vehicle’s cost must be reduced by the credit amount for depreciation.
  • Consult a tax professional for business vehicles.
• Expecting a refund larger than your tax owed
  • The credit is non-refundable — it only offsets taxes due.
  • If your tax bill is $3,000, you’ll get only $3,000 of a $7,500 credit.

What Happens After You File

• IRS Processing:
  • E-file refunds typically arrive within 21 days.
  • Paper filings take 6–8 weeks.
  • The credit will either reduce your tax bill or increase your refund (up to the amount owed).
• IRS Verification:
  • The IRS can cross-check your VIN and manufacturer certification.
  • They may request additional proof like your purchase agreement or delivery documentation.
• Recapture Rules:
  • If you sell or stop using the vehicle in the U.S. within 3 years, you might have to repay part of the credit.
• Recordkeeping:
  • Keep your purchase documents, VIN records, and certification for at least 3 years after filing.

Frequently Asked Questions (FAQs)

• Q1: Can I claim the credit if I lease my EV?
  No. The leasing company (lessor) claims the credit, not the lessee.
• Q2: What if my tax liability is less than $7,500?
  You can only use up to your total tax owed. The remaining amount cannot be carried forward.
• Q3: I bought my EV in 2022 but received it in 2023. Which year counts?
  Claim it in the year you took possession (2023 in this case).
• Q4: Does the credit apply to used EVs?
  Not for 2022. The used clean vehicle credit began in 2023 (up to $4,000).
• Q5: What if I use the EV for both business and personal driving?
  Allocate the credit based on business-use percentage (business miles ÷ total miles).
• Q6: Do I need documentation from the dealer?
  You need the VIN and manufacturer certification that your vehicle qualifies.
  (Seller reports weren’t required until 2023.)
• Q7: Can I claim the credit if I bought the car as a gift for someone else?
  No. The registered owner must claim it, and gifting could trigger recapture.

Important Note for Future Years

The Inflation Reduction Act of 2022 changed EV tax credit rules starting in 2023, adding:

• Income limits
• Vehicle price caps
• Battery component and mineral sourcing rules
• Credit transfer options to dealers

For current guidance, visit IRS.gov/CleanVehicle.

Key Takeaway

For 2022, Form 8936 lets you claim up to $7,500 for a qualifying new EV, as long as:

• You’re the original owner
• The vehicle meets all eligibility requirements
• You properly complete and file the form with your 2022 tax return

Always double-check manufacturer eligibility and IRS guidance before filing.