What Form 8936 (2019) Is For
U.S. taxpayers used IRS SCHEDULE A (Form 8936) (2019) to claim the federal electric vehicle tax credit for qualified plug-in electric drive motor vehicles placed in service during the 2019 tax year. This tax credit helped reduce a taxpayer’s overall tax liability when purchasing a new clean vehicle for personal or business use.
The form applied to electric vehicles, such as the Tesla, Chevrolet, BMW, and Nissan models, that met specific battery capacity and gross vehicle weight rating requirements. The credit encouraged the adoption of clean vehicles before the Inflation Reduction Act introduced a new clean vehicle credit for future tax years.
When You’d Use Form 8936
Taxpayers use IRS Form 8936 to claim the clean vehicle credit for qualifying new clean vehicles purchased for personal use, including electric cars, plug-in hybrid vehicles, and fuel cell vehicles. The credit amount depends on factors such as battery capacity, critical minerals, final assembly location, and manufacturer eligibility.
Form 8936 must be filed with the taxpayer’s federal tax return to reduce their overall tax bill for the tax year. Always review the latest IRS rules, eligible model lists, and income limits to confirm whether your vehicle and filing status qualify for the Clean Vehicle Tax Credit.
Key Rules or Details for 2019
For the 2019 tax year, taxpayers could claim the electric vehicle tax credit on Form 8936 for new clean vehicles that met IRS eligibility standards. Each qualifying vehicle had to be purchased for own use, primarily for driving on public roads, and placed in service during the year. The credit amount depended on the vehicle’s battery capacity, gross vehicle weight rating, and manufacturer certification, with a minimum credit of $2,500 and a maximum credit of $7,500 based on the vehicle’s specifications.
The manufacturer’s suggested retail price, final assembly location, and sales limits also affected eligibility. Once a manufacturer reached 200,000 qualifying vehicles, the credit phased out in accordance with IRS law. Personal credits could be used to reduce total taxes owed, while business credits were reported as part of the general business credit on Form 3800.
Step-by-Step (High Level)
Step 1: Gather Documentation
Taxpayers should collect the following before completing Form 8936:
- Vehicle title or registration to confirm the VIN
- Purchase agreement or vehicle’s window sticker for model details
- Manufacturer’s certification letter showing the eligible credit amount
- The delivery date indicates when the vehicle was first put into service.
- Mileage logs, if any business use was claimed
Step 2: Complete Part I – Tentative Credit
Taxpayers enter vehicle information on lines 1 through 3. The tentative credit amount from the manufacturer’s certification is entered on line 4a, and the phase-out percentage (100%, 50%, or 25%) is entered on line 4b. Multiplying these values provides the credit amount.
Step 3: Determine Business vs. Personal Use
Taxpayers calculate the business-use percentage by dividing business miles by total miles driven. The result determines how the credit is split between personal and business use.
Step 4: Complete Part II – Business or Investment Credit
The business portion is entered and transferred to Form 3800. Any applicable Section 179 deductions are considered when finalizing the amount.
Step 5: Complete Part III – Personal Credit
The personal portion is reported on Schedule 3 of Form 1040. The individual credit is nonrefundable and cannot exceed the total tax liability.
Step 6: Adjust Vehicle Basis
Taxpayers must reduce the vehicle’s basis by the amount of credit claimed to avoid duplicate deductions when the car is later depreciated or sold.
Learn more about federal tax filing through our IRS Form Help Center or explore IRS assistance options.
Common Mistakes and How to Avoid Them
- Miscalculating phase-out percentages: Verify the manufacturer’s phase-out schedule, especially for Tesla and GM vehicles, to ensure the correct credit amount is applied.
- Entering an incomplete or incorrect VIN: Ensure the vehicle identification number includes all 17 characters exactly as shown on the registration or title.
- Exceeding total tax liability: The clean vehicle credit cannot exceed your total tax liability for the year; unused portions are nonrefundable.
- Failing to document business use: Taxpayers claiming business use must maintain accurate mileage logs and related records for IRS verification.
Accurate VIN entry, verified manufacturer data, and proper documentation help ensure your clean vehicle tax credit claim is processed smoothly and fully compliant with IRS requirements.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File
Once Form 8936 is submitted with the tax return, the IRS matches the VIN and manufacturer data to verify eligibility. The credit is applied to reduce the taxpayer’s total tax due. Business credits can be carried forward for up to 20 years.
Taxpayers should retain all relevant documentation, including the purchase agreement, manufacturer’s certification, and mileage records, for a minimum of three years. If the IRS requires additional information, a notice will be sent requesting verification of the credit claim.
FAQs
What is IRS Form Schedule A Form 8936 (2019)?
IRS Form Schedule A Form 8936 (2019) allowed taxpayers to claim the electric vehicle tax credit for clean vehicles purchased and placed in service during the 2019 tax year. The credit amount depended on the vehicle type, battery capacity, and the manufacturer's eligibility.
How does the clean vehicle credit differ from the new clean vehicle credit?
The clean vehicle credit applied to new vehicles purchased before the Inflation Reduction Act, while the latest clean vehicle credit covers future tax years. Each program includes limits based on gross vehicle weight rating, final assembly, and manufacturer’s suggested retail price.
How can a taxpayer claim the credit for an electric vehicle?
A taxpayer can claim the credit by filing Form 8936 with the tax return. The vehicle must be purchased for own use, placed in service within the tax year, and meet all IRS clean vehicle eligibility rules.
What determines the credit amount for eligible vehicles?
The credit amount is determined by the vehicle’s battery capacity, purchase price, and manufacturer certification. Factors such as gross vehicle weight rating and kilowatt-hour capacity directly affect whether the car qualifies for the minimum credit or a higher amount of credit.
Can previously owned clean vehicles qualify for a credit?
Previously owned clean vehicles did not qualify under the 2019 credit. The Inflation Reduction Act created a separate program for previously owned clean vehicles in future tax years, allowing consumers to benefit from lower-cost electric vehicle purchases.
How do business and personal credits differ on Form 8936?
Business credits are reported on Form 3800 as part of the general business credit, while personal credits are claimed on Form 1040. A taxpayer may not use an individual credit to generate excess credit or deductions beyond their tax liability.
What documentation is needed to verify eligibility for Form 8936?
Taxpayers must retain the vehicle’s window sticker, sales contract, and manufacturer's certification for verification purposes. These documents confirm the vehicle’s eligibility, purchase price, battery capacity, and placed-in-service date for accurate reporting and IRS review.
For more resources on filing or understanding other IRS forms, visit our Form Summaries and Guides Library.
