Publication 17
taxmap/pub17/p17-188.htm#en_us_publink1000174891 | At the time this publication was prepared for printing, Congress was considering legislation that could affect many of the credits discussed in this chapter. To see if the legislation was enacted, go to
www.irs.gov/pub17. |
taxmap/pub17/p17-188.htm#en_us_publink1000272991taxmap/pub17/p17-188.htm#en_us_publink1000262520Excess withholding of social security and railroad retirement
tax.
(p243)Social security tax and tier 1 railroad retirement (RRTA) tax were both withheld during 2015 at a rate of 6.2% of wages up to $118,500. If you worked for more than one employer and had too much social security or RRTA tax withheld during 2015, you may be entitled to a credit for the excess withholding. See
Credit for Excess Social Security Tax or Railroad Retirement Tax
Withheld.
Alternative fuel vehicle refueling credit.
(p243)The credit for alternative fuel vehicle refueling property has expired. You can't claim this credit for alternative fuel vehicle refueling property placed in service after 2014. However, a partner in a fiscal year partnership or shareholder of a fiscal year S corporation may receive an alternative fuel vehicle refueling property credit that must be reported on a 2015 return.
Alternative motor vehicle credit.
(p243)The alternative motor vehicle credit has expired for vehicles purchased after 2014. However, if you purchased the vehicle before 2015, but placed it in service during 2015, you may still be able to claim the credit for 2015. Don't report vehicles purchased after 2014 on Form 8910 unless the credit is
extended.
Residential energy credit.
(p243)The nonbusiness energy property credit has expired. You can't claim this credit for nonbusiness energy property placed in service after 2014. You may, however, still be able to claim the residential energy efficient property
credit.
Plug-in electric drive motor vehicle credit.
(p243)The credit for qualified two- or three-wheeled plug-in electric vehicles acquired after 2013 has
expired.
Health coverage tax credit.
(p243)The
health coverage tax credit, which expired at the end of 2013 has been reinstated. For 2015, if you were an eligible trade adjustment assistance (TAA) recipient, alternative TAA recipient, reemployment TAA recipient, Pension Benefit Guarantee pension payee, or qualifying family member, you may be able to take the HCTC for health insurance coverage purchased through a Health Insurance Marketplace. Eligibility for the HCTC is generally the same as in 2013 with the following
changes.
- The HCTC is now an election. Once you make the election to take the HCTC for a month, the election will apply to all subsequent months during your tax year unless you no longer qualify to take the HCTC. See
How to take the credit under
Health Coverage Tax Credit, below.
- For 2015, you can take the HCTC for a qualified health plan purchased through a Health Insurance Marketplace. This insurance coverage also qualifies for the premium tax credit taken on Form 8962, Premium Tax Credit (PTC). You can’t take both the HCTC and PTC for the same qualified health plan in the same coverage month. For information on qualified health plans purchased through a Health Insurance Marketplace and the premium tax credit, see the Instructions for Form
8962.
This chapter discusses the following nonrefundable credits.
This chapter also discusses the following refundable credits.
Several other credits are discussed in other chapters in this publication.
The first part of this chapter,
Nonrefundable Credits, covers ten credits that you subtract from your tax. These credits may reduce your tax to zero. If these credits are more than your tax, the excess isn't refunded to
you.
taxmap/pub17/p17-188.htm#en_us_publink1000174904The second part of this chapter,
Refundable Credits, covers three credits that are treated as payments and are refundable to you. These credits are added to the federal income tax withheld and any estimated tax payments you made. If this total is more than your total tax, the excess may be refunded to
you.
taxmap/pub17/p17-188.htm#TXMP0b514dd7Useful items
You may want to see:
Publication 502 Medical and Dental Expenses 514 Foreign Tax Credit for
Individuals 530 Tax Information for Homeowners 590-A Contributions to Individual Retirement Arrangements (IRAs) 590-B Distributions from Individual Retirement Arrangements (IRAs) Form (and Instructions) 1116:
Foreign Tax Credit 2439:
Notice to Shareholder of Undistributed Long-Term Capital Gains 5695:
Residential Energy Credit 8396:
Mortgage Interest Credit 8801:
Credit For Prior Year Minimum Tax — Individuals, Estates, and
Trusts 8828:
Recapture of Federal Mortgage Subsidy 8839:
Qualified Adoption Expenses 8880:
Credit for Qualified Retirement Savings Contributions 8885:
Health Coverage Tax Credit 8910:
Alternative Motor Vehicle Credit 8911:
Alternative Fuel Vehicle Refueling Property Credit 8912:
Credit to Holders of Tax Credit Bonds 8936:
Qualified Plug-in Electric Drive Motor Vehicle Credit taxmap/pub17/p17-188.htm#en_us_publink1000174999The credits discussed in this part of the chapter can reduce your tax. However, if the total of these credits is more than your tax, the excess isn't refunded to
you.
taxmap/pub17/p17-188.htm#en_us_publink1000272996You may be able to take a tax credit of up to $13,400 for qualified expenses paid to adopt an eligible child. The credit may be allowed for the adoption of a child with special needs even if you don't have any qualified
expenses.
If your modified adjusted gross income (AGI) is more than $201,010, your credit is reduced. If your modified AGI is $241,010 or more, you can't take the credit.
taxmap/pub17/p17-188.htm#en_us_publink1000272997Qualified adoption expenses are reasonable and necessary expenses directly related to, and whose principal purpose is for, the legal adoption of an eligible child. These expenses
include:
- Adoption fees,
- Court costs,
- Attorney fees,
- Travel expenses (including amounts spent for meals and lodging) while away from home,
and
- Re-adoption expenses to adopt a foreign child.
Qualified adoption expenses don't include expenses:
- That violate state or federal law,
- For carrying out any surrogate parenting arrangement,
- For the adoption of your spouse's child,
- For which you received funds under any federal, state, or local
program,
- Allowed as a credit or deduction under any other federal income tax rule,
or
- Paid or reimbursed by your employer or any other person or
organization.
The term "eligible child" means any individual:
- Under 18 years old, or
- Physically or mentally incapable of caring for himself or
herself.
An eligible child is a child with special needs if all three of the following apply.
- The child was a citizen or resident of the United States (including U.S. possessions) at the time the adoption process
began.
- A state (including the District of Columbia) has determined that the child can't or shouldn't be returned to his or her parents'
home.
- The state has determined that the child won't be adopted unless assistance is provided to the adoptive parents. Factors used by states to make this determination
include:
- The child's ethnic background,
- The child's age,
- Whether the child is a member of a minority or sibling group,
and
- Whether the child has a medical condition or a physical, mental, or emotional
handicap.
Generally, until the adoption becomes final, you take the credit in the year after your qualified expenses were paid or incurred. If the adoption becomes final, you take the credit in the year your expenses were paid or incurred. See the Instructions for Form 8839 for more specific information on when to take the credit.
taxmap/pub17/p17-188.htm#en_us_publink1000273002If the child isn't a U.S. citizen or resident at the time the adoption process began, you can't take the credit unless the adoption becomes final. You treat all adoption expenses paid or incurred in years before the adoption becomes final as paid or incurred in the year it becomes
final.
taxmap/pub17/p17-188.htm#en_us_publink1000273007Figure your 2015 nonrefundable credit and any carryforward to 2016 on Form 8839 and attach it to your Form 1040. Include the credit in your total for Form 1040, line 54. Check box c and enter "8839" on the line next to that
box.
taxmap/pub17/p17-188.htm#en_us_publink1000273008For more information, see the Instructions for Form 8839.
taxmap/pub17/p17-188.htm#en_us_publink1000174914An alternative motor vehicle is a vehicle with at least four wheels that qualifies as a qualified fuel cell vehicle. You may be able to take this credit if you are the owner of a qualified fuel cell vehicle and placed it in service in
2015.
| The alternative motor vehicle credit has expired for vehicles purchased after 2014. However, if you purchased the vehicle before 2015, but placed it in service during 2015, you may still be able to claim the credit for 2015. At the time these instructions went to print, Congress had not enacted legislation on expired provisions. To find out if legislation has been enacted, go to
www.irs.gov/pub17. |
taxmap/pub17/p17-188.htm#en_us_publink100036057A qualified fuel cell vehicle is a new vehicle propelled by power derived from one or more cells that convert chemical energy directly into electricity by combining oxygen with hydrogen fuel, and that meets certain additional
requirements.
taxmap/pub17/p17-188.htm#en_us_publink1000174916Generally, you can rely on the manufacturer's certification to the IRS that a specific make, model, and model year vehicle qualifies for the credit and the amount of the credit for which it qualifies. In the case of a foreign manufacturer, you generally can rely on its domestic distributor's certification to the
IRS.
Ordinarily the amount of the credit is 100% of the manufacturer's (or domestic distributor's) certification to the IRS of the maximum credit
allowable.
taxmap/pub17/p17-188.htm#en_us_publink1000174921To take the credit, you must complete Form 8910 and attach it to your Form 1040. Include the credit in your total for Form 1040, line 54. Check box c and enter "8910" on the line next to that
box.
taxmap/pub17/p17-188.htm#en_us_publink1000174922For more information on the credit, see the Instructions for Form
8910.
taxmap/pub17/p17-188.htm#en_us_publink1000174923The credit for alternative fuel vehicle refueling property has expired. You can't claim this credit for alternative fuel vehicle refueling property placed in service after 2014. However, a partner in a fiscal year partnership or shareholder of a fiscal year S corporation may receive an alternative fuel vehicle refueling property credit that must be reported on a 2015
return.
taxmap/pub17/p17-188.htm#en_us_publink1000174924Qualified alternative fuel vehicle refueling property is any property (other than a building or its structural components) used to store or dispense alternative fuel into the fuel tank of a motor vehicle propelled by the fuel, but only if the storage or dispensing is at the point where the fuel is delivered into that
tank.
An alternative fuel is a fuel at least 85% of the volume of which consists of
hydrogen.
| The credit has expired for alternative fuel vehicle refueling property placed in service after 2014. At the time this publication went to print, Congress had not enacted legislation on expired provisions. To find out if legislation has been enacted, go to
www.irs.gov/pub17. |
taxmap/pub17/p17-188.htm#en_us_publink1000174926For business use property, the credit is generally the smaller of 30% of the property's cost or
$30,000.
taxmap/pub17/p17-188.htm#en_us_publink1000174927Recipients of these credits that are partnerships or S corporations must report these amounts on line 8 of Form 8911. See Form 8911 and its instructions for more
information.
taxmap/pub17/p17-188.htm#en_us_publink1000174928For more information on the credit, see the Instructions for Form
8911.
taxmap/pub17/p17-188.htm#en_us_publink1000174929Tax credit bonds are bonds in which the holder receives a tax credit in lieu of some or all of the interest on the
bond.
You may be able to take a credit if you are a holder of one of the following
bonds.
- Clean renewable energy bonds (issued before 2010).
- New clean renewable energy bonds.
- Qualified energy conservation bonds.
- Qualified school construction bonds.
- Qualified zone academy bonds.
- Build America bonds.
In some instances, an issuer may elect to receive a credit for interest paid on the bond. If the issuer makes this election, you can't also claim a
credit.
taxmap/pub17/p17-188.htm#en_us_publink1000174930The amount of any tax credit allowed (figured before applying tax liability limits) must be included as interest income on your tax
return.
taxmap/pub17/p17-188.htm#en_us_publink1000174931Complete Form 8912 and attach it to your Form 1040. Include the credit in your total for Form 1040, line 54. Check box c and enter "8912" on the line next to that
box.
taxmap/pub17/p17-188.htm#en_us_publink1000174932For more information, see the Instructions for Form 8912.
taxmap/pub17/p17-188.htm#en_us_publink1000174933You generally can choose to take income taxes you paid or accrued during the year to a foreign country or U.S. possession as a credit against your U.S. income tax. Or, you can deduct them as an itemized deduction (see
chapter 22).
You can't take a credit (or deduction) for foreign income taxes paid on income that you exclude from U.S. tax under any of the
following.
- Foreign earned income exclusion.
- Foreign housing exclusion.
- Income from Puerto Rico exempt from U.S. tax.
- Possession exclusion.
Unless you can elect not to file Form 1116 (see
Exception), your foreign tax credit can't be more than your U.S. tax liability (line 47), multiplied by a fraction. The numerator of the fraction is your taxable income from sources outside the United States. The denominator is your total taxable income from U.S. and foreign sources. See Pub.
514 for more information.
Complete Form 1116 and attach it to your Form 1040. Enter the credit on Form 1040, line 48.
taxmap/pub17/p17-188.htm#en_us_publink1000174938You don't have to complete Form 1116 to take the credit if all of the following apply.
- All of your gross foreign source income was from interest and dividends and all of that income and the foreign tax paid on it were reported to you on Form 1099-INT, Form 1099-DIV, or Schedule K-1 (or substitute
statement).
- You held the stock or bonds on which the dividends and interest were paid for at least 16 days and weren't obligated to pay these amounts to someone
else.
- You aren't filing Form 4563 or excluding income from sources within Puerto
Rico.
- The total of your foreign taxes wasn't more than $300 (not more than $600 if married filing
jointly).
- All of your foreign taxes were:
- Legally owed and not eligible for a refund or reduced tax rate under a tax treaty,
and
- Paid to countries that are recognized by the United States and don't support
terrorism.
For more information on the credit and these requirements, see the Instructions for Form
1116.
taxmap/pub17/p17-188.htm#en_us_publink1000174939The mortgage interest credit is intended to help lower-income individuals own a home. If you qualify, you can take the credit each year for part of the home mortgage interest you pay.
taxmap/pub17/p17-188.htm#en_us_publink1000174940You may be eligible for the credit if you were issued a qualified Mortgage Credit Certificate (MCC) from your state or local government. Generally, an MCC is issued only in connection with a new mortgage for the purchase of your main
home.
taxmap/pub17/p17-188.htm#en_us_publink1000174941Figure your credit on Form 8396. If your mortgage loan amount is equal to (or smaller than) the certified indebtedness (loan) amount shown on your MCC, enter on Form 8396, line 1, all the interest you paid on your mortgage during the
year.
If your mortgage loan amount is larger than the certified indebtedness amount shown on your MCC, you can figure the credit on only part of the interest you paid. To find the amount to enter on line 1, multiply the total interest you paid during the year on your mortgage by the following fraction.
| | Certified indebtedness amount on your MCC | |
| | Original amount of your mortgage | |
If the certificate credit rate is more than 20%, the credit you are allowed can't be more than $2,000. If two or more persons (other than a married couple filing a joint return) hold an interest in the home to which the MCC relates, this $2,000 limit must be divided based on the interest held by each person. See Pub.
530 for more information.
Your credit (after applying the limit based on the credit rate) is also subject to a limit based on your tax that is figured using Form 8396. If your allowable credit is reduced because of this tax liability limit, you can carry forward the unused portion of the credit to the next 3 years or until used, whichever comes first.
If you are subject to the $2,000 limit because your certificate credit rate is more than 20%, you can't carry forward any amount more than $2,000 (or your share of the $2,000 if you must divide the
credit).
taxmap/pub17/p17-188.htm#en_us_publink1000174945Figure your 2015 credit and any carryforward to 2016 on Form 8396, and attach it to your Form 1040. Be sure to include any credit carryforward from 2012, 2013, and 2014.
Include the credit in your total for Form 1040, line 54. Check box c and enter "8396" on the line next to that
box.
taxmap/pub17/p17-188.htm#en_us_publink1000174946If you itemize your deductions on Schedule A (Form 1040), you must reduce your home mortgage interest deduction by the amount of the mortgage interest credit shown on Form 8396, line 3. You must do this even if part of that amount is to be carried forward to 2016. For more information about the home mortgage interest deduction, see
chapter 23.
If you received an MCC with your mortgage loan, you may have to recapture (pay back) all or part of the benefit you received from that program. The recapture may be required if you sell or dispose of your home at a gain during the first 9 years after the date you closed your mortgage loan. See the Instructions for Form 8828 and
chapter 15 for more information.
For more information on the credit, see the Instructions for Form
8396.
taxmap/pub17/p17-188.htm#en_us_publink1000174949The tax laws give special treatment to some kinds of income and allow special deductions and credits for some kinds of expenses. If you benefit from these laws, you may have to pay at least a minimum amount of tax in addition to any other tax on these items. This is called the alternative minimum tax.
The special treatment of some items of income and expenses only allows you to postpone paying tax until a later year. If in prior years you paid alternative minimum tax because of these tax postponement items, you may be able to take a credit for prior year minimum tax against your current year's regular tax.
You may be able to take a credit against your regular tax if for 2014 you had:
- An alternative minimum tax liability and adjustments or preferences other than exclusion
items,
- A minimum tax credit that you are carrying forward to 2015,
or
- An unallowed qualified electric vehicle credit.
Figure your 2015 nonrefundable credit (if any), and any carryforward to 2016 on Form 8801, and attach it to your Form 1040. Include the credit in your total for Form 1040, line 54, and check box b. You can carry forward any unused credit for prior year minimum tax to later years until it is completely used.
taxmap/pub17/p17-188.htm#en_us_publink1000174953For more information on the credit, see the Instructions for Form
8801.
taxmap/pub17/p17-188.htm#en_us_publink1000210768You may be able to take this credit if you placed in service for business or personal use a qualified plug-in electric drive motor vehicle in 2015 and you meet some other requirements.
taxmap/pub17/p17-188.htm#en_us_publink1000296807This is a new vehicle with at least four wheels that:
- Is propelled to a significant extent by an electric motor that draws electricity from a battery that has a capacity of not less than 4 kilowatt hours and is capable of being recharged from an external source of electricity, and
- Has a gross vehicle weight of less than 14,000 pounds.
Generally, you can rely on the manufacturer's (or, in the case of a foreign manufacturer, its domestic distributor's) certification to the IRS that a specific make, model, and model year vehicle qualifies for the credit and, if applicable, the amount of the credit for which it qualifies. However, if the IRS publishes an announcement that the certification for any specific make, model, and model year vehicle has been withdrawn, you can't rely on the certification for such a vehicle purchased after the date of publication of the withdrawal
announcement.
The following requirements must also be met to qualify for the
credit.
- You are the owner of the vehicle. If the vehicle is leased, only the lessor, and not the lessee, is entitled to the
credit.
- You placed the vehicle in service during 2015.
- The vehicle is manufactured primarily for use on public streets, roads, and
highways.
- The original use of the vehicle began with you.
- You acquired the vehicle for your use or to lease to others, and not for resale.
- You use the vehicle primarily in the United States.
To take the credit, you must complete Form 8936 and attach it to your Form 1040. Include the credit in your total for Form 1040, line 54. Check box c and enter "8936" on the line next to that
box.
taxmap/pub17/p17-188.htm#en_us_publink1000260893For more information on the credit, see the Instructions for Form
8936.
taxmap/pub17/p17-188.htm#en_us_publink1000174954You may be able to take the residential energy efficient property credit if you made energy saving improvements to your home located in the United States in 2015.
If you are a member of a condominium management association for a condominium you own or a tenant-stockholder in a cooperative housing corporation, you are treated as having paid your proportionate share of any costs of the association or
corporation.
taxmap/pub17/p17-188.htm#en_us_publink1000209301You may be able to take a credit of 30% of your costs of qualified solar electric property, solar water heating property, fuel cell property, small wind energy property, and geothermal heat pump property. The credit amount for costs paid for qualified fuel cell property is limited to $500 for each one-half kilowatt of capacity of the
property.
| At the time this publication was prepared for printing, Congress was considering legislation that would extend the nonbusiness energy property credit, which expired at the end of 2014. To see if the legislation was enacted, go to
www.irs.gov/pub17. |
taxmap/pub17/p17-188.htm#en_us_publink1000174957You must reduce the basis of your home by the amount of any credit
allowed.
taxmap/pub17/p17-188.htm#en_us_publink1000174958Complete Form 5695 and attach it to your Form 1040. Enter the credit on Form 1040, line
53.
taxmap/pub17/p17-188.htm#en_us_publink1000174959For more information on the credit, see the Instructions for Form
5695.
taxmap/pub17/p17-188.htm#en_us_publink1000174960You may be able to take this credit if you, or your spouse if filing jointly,
made:
- Contributions (other than rollover contributions) to a traditional or Roth
IRA,
- Elective deferrals to a 401(k) or 403(b) plan (including designated Roth contributions) or to a governmental 457, SEP, or SIMPLE
plan,
- Voluntary employee contributions to a qualified retirement plan (including the federal Thrift Savings Plan),
or
- Contributions to a 501(c)(18)(D) plan.
However, you can't take the credit if either of the following
applies.
- The amount on Form 1040, line 38, or Form 1040A, line 22, is more than $30,500 ($45,750 if head of household; $61,000 if married filing
jointly).
- The person(s) who made the qualified contribution or elective deferral: (a) was born after January 1, 1998, (b) is claimed as a dependent on someone else's 2015 tax return, or (c) was a student (defined
next).
You were a student if during any part of five calendar months of 2015
you:
- Were enrolled as a full-time student at a school, or
- Took a full-time, on-farm training course given by a school or a state, county, or local government
agency.
A school includes a technical, trade, or mechanical school. It doesn't include an on-the-job training course, correspondence school, or school offering courses only through the
Internet.
taxmap/pub17/p17-188.htm#en_us_publink1000174963Figure the credit on Form 8880. Enter the credit on your Form 1040, line 51, or your Form 1040A, line 34, and attach Form 8880 to your
return.
taxmap/pub17/p17-188.htm#en_us_publink1000260895For more information on the credit, see the Instructions for Form
8880.
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