IRS Form 8936 – A Complete Overview
- Updated September 17, 2025 - 6.30 PM - Admin, Tax990
Table of Contents
What is Form 8936?
Form 8936, Clean Vehicle Credits, is used to claim credits for certain clean vehicles. This form, along with Schedule A (Form 8936), covers three types of credits:
New Clean Vehicle Credit - for qualifying new electric or fuel cell vehicles.
Previously Owned Clean Vehicle Credit - for qualifying used clean vehicles.
Qualified Commercial Clean Vehicle Credit - for businesses that purchase eligible clean vehicles for commercial use.
Individuals and businesses file Form 8936 to report the purchase of an eligible vehicle, calculate the credit they can claim, or reconcile credits transferred to a dealer.
Who must file Form 8936?
Generally, the following must file Form 8936:
Individuals who purchased a qualifying new clean vehicle or a previously owned clean vehicle for personal use.
Businesses or Corporations that acquired an eligible vehicle for business or commercial purposes and are claiming the Qualified Commercial Clean Vehicle Credit.
Tax-Exempt Organizations, in certain cases, such as when they elect to claim a direct payment (elective pay) of the credit.
Leasing companies (lessors) are generally the ones entitled to claim the credit for leased vehicles.
When should Form 8936 be attached along with Forms 3800 and 990-T?
Nonprofits or tax-exempt organizations required to file Form 990-T, Exempt Organization Business Income Tax Return, and eligible for certain clean vehicle credits must complete and attach Form 8936 with Form 3800, General Business Credit, to report and claim the credit.
What information is required to file Form 8936?
When completing Form 8936, the filer must provide specific details to establish eligibility for the clean vehicle credit and to calculate the amount of the credit. Key information includes:
Taxpayer details (name, address, TIN).
Vehicle details (make, model, year, VIN).
Date the vehicle was placed in service.
Vehicle eligibility certification or seller’s report.
Purchase details (sales price, assembly location, GVWR if applicable).
Income and price eligibility checks (MAGI limits, MSRP or sales price caps).
Credit calculation information (battery capacity, credit limits, or business use rules).
How to file Form 8936?
Form 8936 is structured to cater to different filers—individuals and businesses. Individuals will complete sections related to personal vehicle use, while businesses must fill out sections for vehicles used in business activities.
While filing Form 990-T with Tax990, you can claim clean vehicle credits by completing the required section of Form 8936 along with Form 3800, General Business Credit. The necessary fields will be auto-filled and automatically attached to your Form 990-T—no extra steps, no extra cost.
Part I - Personal Use of Vehicle
For individuals claiming the credit for personal use:
Enter the vehicle details (make, model, VIN, date placed in service).
Ensure the vehicle meets eligibility criteria, including battery capacity and vehicle type.
Calculate the credit based on factors like Modified Adjusted Gross Income (MAGI) limits and the vehicle’s battery capacity.
Previously owned clean vehicles can also qualify under similar rules.
Part II - Business/Investment Use of Vehicle
For businesses or tax-exempt organizations claiming the credit, must:
Enter the vehicle details as in Part I.
Calculate the credit based on the percentage of business use of the vehicle.
If applicable, report the credit on Form 3800 as part of the General Business Credit.
Part III - Tentative Credit
Summarize the total credit calculated from Parts I and II. This is the amount before applying any tax liability limitations. If you’re an individual, report the credit on Schedule 3 of Form 1040. If you’re a business, report it on Form 3800.
Part IV - Credit Limitations
Apply tax liability limitations to the tentative credit amount.
For personal-use credits, subtract other nonrefundable personal credits from the client’s tax liability to determine the allowable portion.
For previously owned clean vehicles, apply the same process using the client’s prior-year and current-year tax data.
For business-use credits, ensure amounts are correctly reported on Form 3800 as part of the General Business Credit.
Enter the final allowable credit on the appropriate line of the client’s tax return (Schedule 3 of Form 1040 for individuals or Form 3800 for business credits).
Part V - Qualified Commercial Clean Vehicle Credit
For commercial vehicles of businesses or tax-exempt organizations:
Calculate the credit as the lesser of 15% of the vehicle’s basis or the incremental cost.
Report the credit on Form 3800 for General Business Credit.
Note:
A separate Schedule A (Form 8936) must be completed for each clean vehicle placed in service.
Individuals transferring the credit to the dealer at the time of sale must still file Form 8936 and Schedule A.
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