What the Form Is For

Schedule A (Form 8936) is the worksheet you use to calculate the exact dollar amount of your clean vehicle tax credit. Think of Form 8936 as the summary sheet and Schedule A as the detailed calculator—you must complete a separate Schedule A for each vehicle you're claiming.

This schedule helps you figure three different types of clean vehicle credits for vehicles placed in service during the 2023 tax year:

• New Clean Vehicle Credit: Up to $7,500 for qualifying new electric vehicles (EVs) or fuel cell vehicles purchased after 2022
• Previously Owned Clean Vehicle Credit: Up to $4,000 for qualifying used EVs that are at least 2 model years old
• Qualified Commercial Clean Vehicle Credit: Up to $7,500 ($40,000 for heavy vehicles) for business-use vehicles

Schedule A walks you through vehicle details, qualification questions, and calculations to determine your specific credit amount. You'll enter the final credit amount from Schedule A onto your main Form 8936, which then flows to your tax return (Form 1040).

IRS.gov/Form8936

When You’d Use It (Late/Amended Filings)

Normal Filing: You must file Schedule A (Form 8936) with your tax return for the year you placed the vehicle in service—that's the date you took possession of the vehicle, not necessarily the purchase date.

Late or Missed Credits: If you forgot to claim the credit on your original 2023 return, you can file an amended return (Form 1040-X) to claim it retroactively. The clean vehicle credit doesn't carry forward, so you must claim it in the year you placed the vehicle in service or lose it permanently. File the amendment as soon as you discover the error—generally within three years of the original filing deadline.

Amended Returns for Corrections: You must also file an amended return if:

• You discover your vehicle doesn't qualify after claiming the credit (the IRS will recapture it)
• You made calculation errors on your original Schedule A
• Your income exceeded the limits and you transferred the credit to a dealer at purchase

Important Filing Requirement: Even if you transferred your credit to the dealer at the time of sale (getting an immediate discount), you still must file Form 8936 and Schedule A with your tax return to report the transfer. This is a reconciliation requirement that many taxpayers miss.

IRS Instructions for Form 8936

Key Rules for 2023

New Clean Vehicle Credit (Up to $7,500)

Vehicle Requirements:

• Battery capacity of at least 7 kilowatt hours
• Gross vehicle weight rating (GVWR) under 14,000 pounds
• Final assembly in North America
• MSRP caps: $55,000 for cars; $80,000 for vans, SUVs, and pickup trucks
• Manufactured by a qualified manufacturer who reports to the IRS

Buyer Requirements:

• You must be the original owner (if leasing, only the lessor qualifies)
• Purchased for use, not resale
• Used primarily in the United States
• Modified AGI limits: $300,000 (married filing jointly), $225,000 (head of household), or $150,000 (all other filers)
• You can use your 2022 or 2023 income, whichever is lower

Critical Timing Rule for 2023: For vehicles placed in service January 1–April 17, 2023, the full credit calculation is based on battery capacity. For vehicles placed in service April 18, 2023 onward, your vehicle must also meet critical minerals and battery component requirements:

• $3,750 if meeting critical minerals requirement only
• $3,750 if meeting battery components requirement only
• $7,500 if meeting both requirements

Previously Owned Clean Vehicle Credit (Up to $4,000)

Vehicle Requirements:

• Model year at least 2 years earlier than purchase year
• Sales price $25,000 or less
• Battery capacity of at least 7 kilowatt hours
• First transfer since August 16, 2022, to an eligible buyer
• Purchased from a dealer (not private party)

Buyer Requirements:

• Lower income limits: $150,000 (joint), $112,500 (head of household), or $75,000 (others)
• Can't be claimed as a dependent
• Haven't claimed another used EV credit in the past 3 years

Qualified Commercial Clean Vehicle Credit

For business vehicles with battery capacity of at least 15 kilowatt hours (7 for vehicles under 14,000 lbs), credit equals the lesser of:

• 30% of basis (15% if also gas/diesel powered), or
• The incremental cost over a comparable gas vehicle

Maximum: $7,500 (or $40,000 for vehicles 14,000+ lbs).

IRS Clean Vehicle Tax Credits

Step-by-Step: How to Complete Schedule A (High Level)

Part I: Vehicle Details (Lines 1-7)

• Enter your vehicle's year, make, and model
• Enter the 17-character VIN (critical—IRS uses this to verify eligibility)
• Enter the date you took possession of the vehicle (placed in service date)
• Answer whether the vehicle was used primarily outside the U.S. (disqualifies most vehicles)
• Identify your vehicle type: new clean vehicle (go to Part II), previously owned (go to Part IV), or commercial (go to Part V)

Part II: New Clean Vehicle—Business/Investment Use

• Line 9: Enter the tentative credit amount from your dealer's seller report
• Line 10: Enter your business-use percentage (divide business miles by total miles)
• Line 11: Multiply to get your business credit amount

Part III: New Clean Vehicle—Personal Use

• Line 12: Calculate the personal-use portion (difference between tentative credit and business credit)
  This amount is subject to your personal tax liability limit

Part IV: Previously Owned Clean Vehicle

• Answer qualification questions (sales price, not a dependent, etc.)
• Line 14: Enter sales price
• Line 15: Multiply by 30% (0.30)
• Line 17: Enter the lesser of line 15 or $4,000

Part V: Qualified Commercial Clean Vehicle

• Calculate based on vehicle basis, section 179 deduction, incremental cost
• Apply the 15% or 30% rate depending on fuel type
• Compare to maximum credit limits

Transfer this final credit amount to Form 8936, then to your Form 1040.

Common Mistakes and How to Avoid Them

Mistake #1: Missing or Incorrect VIN

The IRS will deny your credit if the VIN is missing, incomplete, or doesn't match their database. Always double-check the 17-character VIN from your seller report against your Schedule A.

Mistake #2: Not Filing When You Transferred the Credit

Many taxpayers think they're done when they transfer the credit to the dealer at purchase. You must still file Form 8936 and Schedule A to reconcile the transfer, even though you're not claiming the credit again on your return.

Mistake #3: Income Miscalculation

Taxpayers often misjudge their Modified AGI. Remember: you can use 2022 or 2023 income (whichever is lower), and you must add back certain foreign income exclusions. If you're close to the limit, consult a tax professional before claiming.

Mistake #4: Missing the Dealer Report

Never leave the dealership without your IRS Clean Vehicle Seller Report (Form 15400). This is your proof that the vehicle qualifies. If the dealer doesn't provide it, the vehicle may not be eligible for the credit. The dealer submits these through the IRS Energy Credits Online (ECO) portal—ask for your copy immediately.

Mistake #5: Assuming Your Vehicle Qualifies

Not all EVs qualify. Check the official IRS-approved list at FuelEconomy.gov (a U.S. Department of Energy website referenced in IRS instructions) before purchasing. Some vehicles are ineligible due to MSRP caps, assembly location, or manufacturer reporting issues. A specific VIN might not qualify even if the model generally does—the manufacturer must report that exact VIN to the IRS.

Mistake #6: Wrong Tax Year

Claim the credit in the year you placed the vehicle in service (took possession), not the year you ordered or signed the contract. If you took delivery in December 2023 but file your taxes in April 2024, it's a 2023 credit.

Mistake #7: Not Completing a Separate Schedule A for Each Vehicle

If you purchased multiple qualifying vehicles in 2023, you must complete a separate Schedule A for each vehicle and attach all of them to Form 8936.

IRS Form 8936 Instructions

What Happens After You File

Processing: The IRS will verify your VIN against their database of qualified vehicles reported by manufacturers and dealers. If everything matches, your credit reduces your tax liability dollar-for-dollar.

Nonrefundable Credit: The new and previously owned clean vehicle credits are nonrefundable personal credits. If your credit exceeds your tax liability, you lose the excess—it doesn't carry forward to future years or result in a refund. For example, if you qualify for $7,500 but only owe $6,000 in taxes, you get $6,000 off your bill and the remaining $1,500 is lost.

Business Portion: The business/investment portion of the new clean vehicle credit flows to Form 3800 (General Business Credit) and may carry forward if unused.

Basis Reduction: Unless you elect not to claim the credit, you must reduce the vehicle's tax basis by the credit amount. This affects future depreciation or gain/loss calculations if you sell the vehicle.

Recapture Risk: If your vehicle later doesn't qualify (e.g., you sell it quickly or use it primarily for business when you claimed personal use), the IRS may recapture part or all of the credit. This typically happens during an audit or if the vehicle is converted to ineligible use within three years.

Audit Considerations: Keep your dealer's seller report, purchase documents, and mileage logs (if claiming business use) for at least three years. The IRS may request these during verification.

FAQs

Q1: Can I claim the credit if I lease an electric vehicle?

A: No, only the lessor (the leasing company) can claim the credit. However, many leasing companies pass the savings to you through lower monthly payments. Ask your dealer about this option.

Q2: What if my income was too high in 2022 but will be lower in 2023?

A: Good news—you can use whichever year's Modified AGI is lower. Plan your vehicle purchase accordingly. If you're uncertain about 2023 income, consider waiting until you can estimate it more accurately.

Q3: I bought a qualifying EV but forgot to claim it on my 2023 return. Can I still get the credit?

A: Yes, file an amended return (Form 1040-X) with Form 8936 and Schedule A attached. You generally have three years from the original filing deadline to amend.

Q4: What's "Modified AGI" and how do I calculate it?

A: For this credit, Modified AGI is your regular Adjusted Gross Income (Form 1040, line 11) plus any amounts you excluded for foreign earned income (Form 2555), income from Puerto Rico, or income from American Samoa. Most U.S. taxpayers use their regular AGI.

Q5: The dealer gave me a discount by transferring the credit. Do I need to do anything else?

A: Yes! You must still file Form 8936 and Schedule A with your tax return to report the transfer. This is a reconciliation step many taxpayers miss, which can trigger IRS notices.

Q6: My vehicle qualifies according to the IRS list, but the dealer's report says it doesn't. Why?

A: The manufacturer may not have reported your specific VIN to the IRS yet. Ask your dealer to contact the manufacturer immediately to resolve this. Don't complete the purchase until you have an accepted Clean Vehicle Seller Report from the IRS ECO portal.

Q7: Can I claim both the new vehicle credit and the used vehicle credit in the same year?

A: Yes, if you purchase both a new and a previously owned qualifying vehicle in 2023, you can claim both credits—complete a separate Schedule A for each vehicle. However, you can only claim one previously owned vehicle credit every three years.

Additional Resources

• IRS Form 8936 and Instructions: IRS.gov/Form8936
• IRS 2023 Form Instructions (PDF): IRS.gov/pub/irs-prior/i8936--2023.pdf
• Clean Vehicle Tax Credits Overview: IRS.gov/CleanVehicles
• New Clean Vehicles (2023+): IRS.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after
• Previously Owned Clean Vehicles: IRS.gov/credits-deductions/used-clean-vehicle-credit
• Frequently Asked Questions: IRS.gov FAQ on Clean Vehicle Credits

This guide is based on 2023 tax rules and authoritative IRS publications. Always consult the current year's instructions and consider seeking professional tax advice for your specific situation.