Form 8936 (2019) Tax Year Checklist
Purpose
Form 8936 allows you to claim the federal nonrefundable credit for qualified plug-in electric vehicles placed in service during 2019. This includes both four-wheel vehicles and two-wheeled plug-in electric vehicles. The credit amount varies based on vehicle type, battery capacity, and manufacturer-specific phase-out rules that were in effect during 2019.
2019 Tax Year Overview
The 2019 tax year marked a significant transition period for the electric vehicle tax credit. Tesla and General Motors had each exceeded the 200,000 cumulative U.S. sales threshold, triggering manufacturer-specific phase-out schedules that reduced available credits. Two-wheeled plug-in electric vehicles remained eligible for a separate credit calculation, based on 10% of the vehicle's cost, with a maximum credit of $2,500. The introduction of Form 1040-SR provided an alternative filing option for senior taxpayers born before January 2, 1955.
Eligibility Requirements
Before completing Form 8936, verify that your vehicle meets all qualification criteria. You must be the original owner of the car, and the original use must have begun with you. The vehicle must be manufactured primarily for use on public streets, roads, and highways. You must have acquired the car for personal use or to lease to others, not for resale. The vehicle must be used primarily in the United States. If you leased the car, only the lessor is entitled to claim the credit, not the lessee.
For four-wheel vehicles, the vehicle must have at least four wheels and be propelled to a significant extent by an electric motor drawing electricity from a battery with a capacity of at least 4 kilowatt hours. The battery must be capable of being recharged from an external source of electricity. The vehicle’s gross vehicle weight must be less than 14,000 pounds.
For two-wheeled vehicles, the vehicle must have two wheels and be capable of achieving a speed of 45 miles per hour or greater. It must be propelled to a significant extent by an electric motor drawing electricity from a battery with a capacity of at least 2.5 kilowatt hours that can be recharged from an external source. The vehicle’s gross vehicle weight must be less than 14,000 pounds.
Step-by-Step Completion Guide
Step 1: Gather Vehicle Documentation and Certification
Collect all necessary documentation for each qualifying vehicle. Record the vehicle identification number, year, make, and model. Obtain the manufacturer’s certification letter, which acknowledges the IRS's acceptance of the vehicle’s qualification for the credit.
This certification should specify the credit amount for which the vehicle qualifies. The manufacturer or domestic distributor should provide this documentation. If the IRS has published a withdrawal announcement for your vehicle’s certification, verify that you purchased the car before the withdrawal publication date.
Step 2: Determine the Tentative Credit Amount
For two-wheeled vehicles, enter the actual purchase cost of the car on line 4a. For four-wheel vehicles, enter the credit amount allowable for your specific year, make, and model as certified by the manufacturer and acknowledged by the IRS.
This amount is based on battery capacity and typically ranges from $2,500 to $7,500 before applying phase-out percentages. You can verify eligible vehicles and their credit amounts on the IRS website under Qualified Vehicles Acquired After December 31, 2009.
Step 3: Apply Manufacturer Phase-Out Percentage
Determine whether your vehicle is subject to manufacturer-specific phase-out rules on line 4b. If your car was manufactured by Tesla, use 50% if purchased after December 31, 2018, but before July 1, 2019, or use 25% if purchased after June 30, 2019, but before January 1, 2020. No credit is available for Tesla vehicles purchased after December 31, 2019.
If General Motors manufactured your vehicle, it is 100% if purchased before April 1, 2019. Use 50% if purchased between March 31, 2019, and October 1, 2019. Use 25% if purchased between September 30, 2019, and April 1, 2020. No credit is available for General Motors vehicles purchased after March 31, 2020.
For all other manufacturers, enter 100%.
Step 4: Calculate Your Tentative Credit
Multiply line 4a by the phase-out percentage from line 4b to determine your tentative credit on line 4c. This calculation applies uniformly to both two-wheeled and four-wheeled vehicles at this stage. If you used your vehicle exclusively for personal purposes and did not receive a pass-through credit from a partnership or S corporation, skip Part II and proceed directly to Part III.
Step 5: Determine Business and Investment Use Percentage
Suppose you used the vehicle for business or investment purposes—complete Part II. Calculate your business and investment use percentage by dividing the number of miles driven for business purposes or production of income by the total miles driven for all purposes. Do not include commuting mileage in the business use calculation.
Enter this percentage on line 5. If you converted property from personal to business use or vice versa during the tax year, calculate the percentage only for the months of business use, multiply by the number of business use months, and divide by 12.
Step 6: Calculate Business Portion Credit for Two-Wheeled Vehicles
For two-wheeled vehicles used in business, multiply line 4c by the business use percentage from line 5 and enter the result on line 6. Enter any Section 179 expense deduction claimed for the vehicle on line 7. Subtract line 7 from line 6 and enter the result on line 8. Multiply line 8 by 10% and enter the result on line 9. Enter $2,500 as the maximum credit per vehicle on line 10. Enter the smaller of line 9 or line 10 on line 11.
For four-wheel vehicles, skip lines 7 through 10 and enter the amount from line 6 directly on line 11.
Step 7: Aggregate Business Credits
Add the amounts from line 11 for all vehicles listed in columns a and b, and enter the total on line 12. If you received qualified plug-in electric drive motor vehicle credits from partnerships or S corporations as shown on Schedule K-1 Form 1065 box 15 code P or Schedule K-1 Form 1120-S box 13 code P, enter the total pass-through credits on line 13.
Add lines 12 and 13 and enter the total on line 14. This represents your business and investment use portion of the credit.
Step 8: Report Business Credit
Partnerships and S corporations should stop at line 14 and report this amount on Schedule K. All other taxpayers must report the line 14 amount on Form 3800 Part III line 1y. The business portion of the credit is treated as a general business credit and may be subject to carryback and carryforward provisions under general business credit rules.
Step 9: Calculate Personal Use Portion
Complete Part III to determine the credit for personal use. If you skipped Part II, enter the amount from line 4c on line 15. If you completed Part II, subtract line 6 from line 4c and enter the result on line 15.
For four-wheel vehicles, skip lines 16 and 17 and enter the amount from line 15 directly on line 18.
Step 10: Apply Personal Use Limitations for Two-Wheeled Vehicles
For two-wheeled vehicles only, multiply line 15 by 10% and enter the result on line 16. If you skipped Part II, enter $2,500 on line 17. If you completed Part II, subtract line 11 from line 10 and enter the result on line 17.
Enter the smaller of line 16 or line 17 on line 18. This ensures two-wheeled vehicles do not exceed the statutory maximum credit of $2,500.
Step 11: Calculate Total Personal Use Credit
Add the amounts from line 18 for all vehicles in columns a and b, and enter the total on line 19. This represents the total personal use portion of your credit before applying tax liability limitations.
Step 12: Determine Tax Liability Limitation
Enter the amount from Form 1040 or Form 1040-SR line 12b, or Form 1040-NR line 45 on line 20. This represents your total income tax before credits.
On line 21, enter the total of all personal credits you are claiming from Schedule 3 Form 1040 or 1040-SR lines 1 through 4, Form 1040-NR lines 46 through 48, Form 5695 line 30, Form 8910 line 15, and Schedule R line 22.
Subtract line 21 from line 20 and enter the result on line 22. This is your remaining tax liability available for the electric vehicle credit.
Step 13: Finalize Personal Use Credit
Enter the smaller of line 19 or line 22 on line 23. This is your allowable personal use credit. Report this amount on Schedule 3 Form 1040 or 1040-SR line 6, or Form 1040-NR line 51. Check box c on that line and enter 8936 in the space next to the box.
If line 22 is smaller than line 19, the unused personal portion of the credit is lost and cannot be carried back or forward to other tax years.
Step 14: Reduce Vehicle Basis
Unless you elect not to claim the credit, reduce the basis of each vehicle by the sum of the amounts entered on lines 11 and 18 for that vehicle. This basis reduction affects your depreciation calculations and potential gain or loss if you later sell the car. Consult IRS Publication 463 for detailed guidance on basis adjustments and depreciation.
Step 15: Attach Form and Maintain Records
Attach the completed Form 8936 to your tax return. If you claimed credits for more than two vehicles, use additional Form 8936 sheets and consolidate totals on lines 12 and 19 of the final page.
Maintain written documentation to support your business and investment use percentage calculations, including manufacturer certifications, purchase receipts, and vehicle identification information. The IRS may request verification of your vehicle’s eligibility and the credit amount claimed during examination.
Key Points for 2019 Filers
The credit is nonrefundable, meaning it can only reduce your tax liability to zero but cannot generate a refund. The personal portion of any unused credit due to insufficient tax liability is permanently lost with no carryback or carryforward provisions. The business portion follows general business credit rules and may be carried to other tax years.
Vehicles purchased from Tesla or General Motors in 2019 were subject to reduced credits due to phase-out schedules. Two-wheeled plug-in electric vehicles remained eligible through 2020, with distinct calculation rules limiting the credit to 10% of the cost, with a maximum of $2,500.
Form 1040-SR filers should use the same line references as Form 1040 filers when reporting the credit. The credit cannot be claimed for the same vehicle on both Form 8936 and Form 8910 for alternative motor vehicles.
Need Help With Your Tax Filing?
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
We offer:
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Call now before filing: (888) 260-9441
Fast transcript pull available
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
