Tax Credit Forms

Taxpayers can take advantage of several different tax credits to lower taxes.

Here we will review the credits and forms for claiming the child tax credit, solar tax credit, electric vehicle tax credit, and education credits.

Child Tax Credit Form 8812

Form 8812 allows eligible taxpayers to claim the nonrefundable Child Tax Credit (CTC) and Credit for Other Dependents (ODC) as well as the refundable Additional Child Tax Credit (ACTC).

CTC has a $2,000 max credit per qualifying child, ODC a $500 max credit, and ACTC a $1,600 max credit.

Children who qualify for a credit must:

• Be under the age of 17 at the end of the tax year and have a valid Social Security number
• Be the dependent daughter, son, foster child, stepchild, sister, brother, stepsister, or stepbrother of the taxpayer filing IRS Form 8812
• Have lived with or been supported by the taxpayer for at least six months of the tax year
• Be a U.S. citizen, national, or resident alien

Enter the CTC or ODC amount on Form 1040 (line 19). ACTC goes on line 28.

You can get Form 8812 for the child tax credit at https://www.irs.gov/pub/irs-pdf/f1040s8.pdf, and view the instructions at https://www.irs.gov/instructions/i1040s8.

Solar Tax Credit Form 5695 (Residential Clean Energy Credit)

The Solar Energy Tax Credit (SETC) allows taxpayers to deduct a maximum of $1,200 annually for energy-efficient residential improvements.

In addition, taxpayers can claim another $2,000 per year for qualifying appliances such as heat pumps, water heaters, and devices that use biomass materials (logs or wood pellets) for heating purposes.

When claiming a home energy tax credit using Form 5695, taxpayers must include documents for the products being claimed and confirm that they meet IRS specifications for the solar and/or energy credit.

Manufacturers must also comply with reporting requirements and revisions for products to qualify.

Information submitted on IRS Form 5695 includes how much you paid for installing solar electricity, solar water heating, or other qualifying renewable energy enhancements.

Form 5695 must be attached to Form 1040 when submitting both forms. The solar tax credit amount for residential clean energy is entered on Schedule 3 (line 5a) for Form 1040. Energy efficient home improvement credits go on Schedule 3 (line 5b).

Note that you can only take either the clean energy or home improvement credit (not both) in a single tax year.

You can get Form 5695 for the solar tax credit and other home energy credits at https://www.irs.gov/pub/irs-pdf/f5695.pdf, and view the instructions at https://www.irs.gov/instructions/i5695.

Electric Vehicle Tax Credit Form 8834 (Clean Vehicle Tax Credit)

Form 8834 allows taxpayers to claim electric vehicle tax credits from previous tax years. It is also referred to as the EV tax credit, and in some cases, the Tesla tax credit.

Due to passive activity rules, EV credits are typically carried over when they cannot be claimed during a specific tax year. Use form 8582-CR to help calculate the correct amount of electric vehicle credits.

Taxpayers are eligible to submit IRS Form 8834 if the electric vehicle:

• Was purchased as a new vehicle
• Weighs less than seven tons (14,000 pounds)
• Requires an external charge source to operate
• Has at least a four kilowatt-hour battery pack (four-wheeled vehicles) or 2.5 kilowatt-hour battery (two-wheeled vehicles)
• Is intended to be driven in the U.S.

Note that used and leased EVs are not eligible for the Electric Vehicle Tax Credit.

Form 8834 requires information about the electric vehicle purchase price, date of purchase, VIN, and the EVs year, make, and model.

The Clean Vehicle Tax Credit amount for electric vehicles is reported on Schedule 3 (line 6i) for Form 1040.

You can get Form 8834 and instructions for the clean vehicle EV tax credit at https://www.irs.gov/pub/irs-pdf/f8834.pdf. Form 8582-CR for figuring passive activity credits is available at https://www.irs.gov/pub/irs-pdf/f8582cr.pdf.

American Opportunity Tax Credit Form 8863 (AOTC)

Undergraduate students may take up to a $2,500 credit with AOTC, if their modified adjusted gross income (MAGI) does not exceed $90,000 when they file as single or head of household. The MAGI limit for married students filing jointly is $180,000.

Other eligibility requirements for students claiming AOTC include:

• Must be enrolled at least half-time for one or more academic periods for the first three months of a tax year
• Have an SSN or TIN and be able to provide their college or university’s EIN on Form 8863
• Cannot have a felony conviction or charge of possessing or distributing a controlled substance on their record

The nonrefundable amount of your AOTC from IRS Form 8863 is reported on Schedule 3 (line 3) for Form 1040. Your refundable amount goes on Form 1040 (line 29).

Lifetime Learning Credit Form 8863 (LLC)

LLC allows qualified students to claim 20% of adjusted qualified education expenses, with a maximum credit of $2,000. The Lifetime Learning Credit starts phasing out for students with a MAGI between $80,000 and $90,000 (or $160,000 to $180,000 for joint filers).

In addition, LLC cannot be claimed if a student has already claimed AOTC for the same tax year.

The amount of your LLC from Form 8863 is reported on Schedule 3 (line 3) for Form 1040.

You can get Form 8863 for AOTC and LLC education credits at https://www.irs.gov/pub/irs-pdf/f8863.pdf, and view the instructions at https://www.irs.gov/instructions/i8863.

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