What Form 8936 Is For

Form 8936 for tax year 2019 was the IRS form used to claim a federal tax credit for purchasing qualified plug-in electric drive motor vehicles and certain two-wheeled plug-in electric vehicles. This credit was designed to encourage Americans to buy electric vehicles by reducing their tax bill, with credits ranging from $2,500 to $7,500 depending on the vehicle's battery capacity. The credit applied to new vehicles placed in service during 2019, including popular models like the Chevrolet Bolt, Nissan Leaf, and certain Tesla and BMW models (subject to manufacturer phase-out rules). IRS.gov

The form had two distinct components: a business/investment credit (treated as a general business credit reported on Form 3800) and a personal-use credit (reported directly on your Form 1040). If you used your electric vehicle partially for business and partially for personal purposes, you would calculate both portions separately on the same form. IRS.gov

When You’d Use Form 8936 (Including Late or Amended Returns)

You should have filed Form 8936 with your 2019 tax return if you purchased and placed a qualifying electric vehicle in service during the 2019 calendar year. “Placed in service” means the date you took delivery and started using the vehicle, not necessarily when you ordered it.

If you forgot to claim the credit on your original 2019 return, you can still file an amended return using Form 1040-X along with the corrected Form 8936. You generally have three years from the original filing deadline (which was July 15, 2020, for 2019 returns due to COVID-19 extensions) to claim a refund, meaning you had until July 15, 2023, to amend your 2019 return for this credit. If you're beyond that deadline, the credit is unfortunately lost and cannot be recovered.

For late filers who haven't yet filed their 2019 return at all, you can still include Form 8936 with your late return, though you may face penalties for filing late. The IRS doesn't penalize you for claiming a legitimate credit late—you just need to include all proper documentation. IRS.gov

Key Rules or Details for 2019

Eligibility Requirements

To qualify for the credit, you must have been the original owner of the vehicle—used electric vehicles didn't qualify. You had to purchase the vehicle for your own use (or to lease to others), not for resale. The vehicle must have been manufactured primarily for use on public roads, have at least four wheels (or two wheels for the motorcycle credit), and be powered significantly by an electric motor drawing from a rechargeable battery of at least 4 kilowatt-hours (2.5 kWh for two-wheeled vehicles). The vehicle's gross weight had to be under 14,000 pounds. IRS.gov

Credit Amounts

For four-wheeled vehicles, the credit was based on the manufacturer's certification to the IRS, with base credits typically ranging from $2,500 to $7,500 depending on battery capacity. Two-wheeled electric vehicles received 10% of the vehicle's cost, up to a maximum of $2,500. You generally relied on the manufacturer's certification letter stating the eligible credit amount for your specific make and model. IRS.gov

Phase-Out Rules

This was critical for 2019. Once a manufacturer sold 200,000 qualifying vehicles in the U.S. after 2009, the credit began phasing out. For Tesla vehicles, the credit was 50% of the full amount if purchased between January 1 and June 30, 2019, and 25% if purchased between July 1 and December 31, 2019. Tesla vehicles purchased after December 31, 2019, received no credit. For General Motors (including the Chevrolet Bolt), the credit was 100% through March 31, 2019, then 50% from April 1 through September 30, 2019, and 25% from October 1, 2019, through March 31, 2020. IRS.gov

Leased Vehicles

If you leased an electric vehicle, only the leasing company (lessor) could claim the credit, not you as the lessee. Many leasing companies passed the credit's value to consumers through reduced lease payments, but you couldn't personally claim it on your tax return. IRS.gov

Step-by-Step (High Level)

Step 1: Gather Your Documentation

Collect your vehicle's information including the 17-character Vehicle Identification Number (VIN) from your title or registration, the exact date you took delivery (placed in service), the year/make/model, and the manufacturer's certification letter showing the eligible credit amount. If you used the vehicle for business, track your business mileage versus total mileage.

Step 2: Complete Part I (Tentative Credit)

Enter your vehicle information on lines 1-3. On line 4a, enter the tentative credit amount from the manufacturer's certification (or cost for two-wheeled vehicles). On line 4b, enter the phase-out percentage: 100% for most manufacturers, but 50% or 25% for Tesla or GM depending on your purchase date. Line 4c calculates your tentative credit by multiplying lines 4a and 4b.

Step 3: Calculate Business vs. Personal Use

If you used the vehicle 100% for personal use, skip Part II and go straight to Part III. If you used it for business or investment purposes at all, you must complete Part II. Calculate your business-use percentage by dividing business miles by total miles driven during 2019. For partial-year business use, prorate accordingly.

Step 4: Complete Part II (Business/Investment Credit)

Enter your business-use percentage on line 5 and multiply by your tentative credit. For four-wheeled vehicles, this amount goes on line 11. For two-wheeled vehicles, you'll also factor in any Section 179 deduction and apply the $2,500 cap. The Part II credit flows to Form 3800 (General Business Credit) rather than directly reducing your personal tax.

Step 5: Complete Part III (Personal Credit)

Calculate the personal-use portion by subtracting your business portion from the tentative credit. This personal credit is subject to a tax liability limitation—you can only use it to reduce your tax to zero; it won't create a refund. The personal portion is entered on Schedule 3 of Form 1040, line 6. IRS.gov

Step 6: Reduce Your Vehicle's Tax Basis

Unless you elect otherwise, you must reduce your vehicle's basis (for depreciation purposes if used in business) by the credit amount claimed. This prevents “double dipping” on tax benefits.

Common Mistakes and How to Avoid Them

Mistake #1: Claiming Credit for Leased Vehicles

Many taxpayers mistakenly try to claim the credit when they've leased rather than purchased their electric vehicle. Remember: only the vehicle's owner (the leasing company) can claim the credit. Check your paperwork—if you have a lease agreement rather than a purchase contract, you cannot claim this credit. Your leasing company may have already factored the credit into your lower monthly payments.

Mistake #2: Ignoring Phase-Out Percentages

Tesla and GM buyers in 2019 frequently claimed the full credit amount without applying the required phase-out reduction. Always check line 4b carefully. If you bought a Tesla between January and June 2019, you multiply by 50%; July–December purchasers multiply by 25%. For GM vehicles, apply 100% before April, 50% April–September, and 25% October–December. Getting this wrong triggers IRS notices. IRS.gov

Mistake #3: Incorrect VIN Entry

The VIN must be exactly 17 characters. Some taxpayers accidentally leave off digits or add spaces. The IRS matches your VIN against manufacturer certifications, so errors cause processing delays and credit denials. Double-check your VIN from your registration or title document.

Mistake #4: Claiming Credit Beyond Tax Liability

The personal-use portion (Part III) is non-refundable and cannot be carried forward. If your tentative personal credit is $5,000 but your tax liability after other credits is only $3,000, you can only use $3,000 of the credit—the remaining $2,000 is lost forever. This surprises many taxpayers who assume all credits work like the Earned Income Credit (which is refundable). Plan accordingly or consider using more business use to capture the credit through Form 3800, where carryback and carryforward rules may apply. IRS.gov

Mistake #5: Neglecting Business-Use Documentation

If you claim any business use, the IRS expects mileage logs substantiating your business-use percentage. Many taxpayers estimate this figure, which can lead to adjustments during an audit. Maintain a contemporaneous mileage log showing business trips, miles driven, and purposes. Without proper documentation, the IRS may disallow the business portion entirely.

What Happens After You File

Once you file your Form 1040 with the attached Form 8936, the IRS processes your return and applies the credit to reduce your tax liability. For the business portion reported on Form 3800, the credit reduces your business tax and any excess may be carried back one year and forward up to 20 years. For the personal portion, it reduces your individual income tax dollar-for-dollar, but only down to zero—you won't receive any excess as a refund.

The IRS typically processes electric vehicle credits without additional verification if the VIN matches manufacturer certifications on file. However, you should keep thorough records including your purchase agreement, manufacturer certification letter, delivery documentation, and (for business use) mileage logs for at least three years after filing. The IRS recommends keeping records even longer if you're using the vehicle in business, as basis adjustments affect future depreciation and gain calculations. IRS.gov

If the IRS questions your credit, they'll send a notice requesting documentation. Respond promptly with copies of your paperwork. If your credit is denied, you have appeal rights through the IRS Office of Appeals.

FAQs

Q1: I bought a used Tesla Model 3 in 2019. Can I claim the credit?

No. The credit was only available for new vehicles where you were the original owner. Used electric vehicles did not qualify for Form 8936 credits in 2019. The used clean vehicle credit didn't exist until the Inflation Reduction Act created it for 2023 and later tax years.

Q2: I took delivery of my vehicle in December 2019 but didn't register it until January 2020. Which year do I claim the credit?

You claim the credit for 2019, the year you placed the vehicle in service (took delivery). “Placed in service” means when you first started using the vehicle, not when you registered it. Use your delivery date from your purchase paperwork. IRS.gov

Q3: My Nissan Leaf qualifies for a $7,500 credit, but my tax liability is only $4,000 after other credits. Can I carry forward the unused $3,500?

Unfortunately, no—not for the personal-use portion. The personal credit from Part III is non-refundable and cannot be carried forward. If your tax liability is only $4,000, you lose the remaining $3,500 permanently. The business portion (Part II), however, may be carried forward through Form 3800 if it exceeds your business tax liability. IRS.gov

Q4: Can married couples filing jointly each claim a credit if we each bought an electric vehicle?

Yes. The form accommodates multiple vehicles using separate columns. If you need more than two columns, you can attach additional Forms 8936 and total them on lines 12 and 19. Each vehicle must meet all eligibility requirements independently. IRS.gov

Q5: I'm a dealer who sold an electric vehicle to a tax-exempt organization. Can I claim the credit?

Yes. There's a special exception allowing dealers to claim the credit when selling to tax-exempt organizations, governmental units, or foreign purchasers who cannot use the credit themselves. You must provide written disclosure of the tentative credit amount to the purchaser, and you must reduce your cost of goods sold by the credit amount claimed. Report this credit as business/investment property. IRS.gov

Q6: I received a letter saying my manufacturer's certification was withdrawn. Can I still claim the credit?

If you purchased the vehicle before the IRS published the withdrawal announcement, you can still rely on the original certification even if you hadn't filed your return yet. The IRS will not collect any understatement based on a certification that was valid when you bought the vehicle. However, if you purchased after the withdrawal announcement, you cannot claim the credit for that vehicle. IRS.gov

Q7: Does claiming this credit increase my chances of being audited?

Not significantly. The IRS has robust data from manufacturers about certified vehicles and VINs, so legitimate claims are typically processed smoothly. However, ensure accuracy with your VIN entry, phase-out percentages, and business-use calculations. Keep thorough documentation to support your claim if questions arise. The credit itself doesn't trigger audits, but mismatches between your claimed credit and manufacturer data will generate notices.

This summary is based on the 2019 Form 8936 and official IRS instructions available at IRS.gov. For specific tax advice regarding your situation, consult a qualified tax professional.