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Generating Form 8936 for a vehicle that isn't two- or three-wheeled (Form 8936) in Lacerte

by Intuit Updated 2 months ago

This article will assist you with entering a vehicle credit for Form 8936 for a vehicle that isn't two- or three-wheeled—and with $7,500 as the maximum credit amount—in Lacerte.

Refer to the IRS Instructions for Form 8936 for more information about this credit.

New for Form 8936 for tax year 2023:

  • A new clean vehicle credit for new electric vehicles meeting specific requirements
  • A credit for previously owned clean vehicles
  • A credit for qualified commercial clean vehicles

Tax-exempt and governmental entities may also elect to treat their credits as a payment of income tax. However, credit for plug-in electric-drive motor vehicles is no longer available for vehicles placed in service after 2022 and final assembly of the vehicle must occur within North America for vehicles purchased after August 16, 2022. See here for more details.

Follow these steps to generate the 8936 in a 1040 for in tax year 2023:

  1. Go to Screen 34, General Business & Vehicle Credits
  2. If this is related to a business activity, in the Credits section, enter the Form (Ctrl+T) using the dropdown, the Activity name or number (Ctrl+T), and TaxpayerSpouse, or Joint (if applicable).
    • If this is not related to a business activity, continue to step 3.
  3. Locate the Clean Vehicle Credit (8936) section on the lower left panel, or by scrolling down.
  4. Begin by entering the Part I: Vehicle Details.
  5. Continue by answering the questions presented on Screen 34 in order.
  6. Follow the directions on the input screen until you complete the input and generate the form, or until you see Stop here which indicates the vehicle doesn't qualify for a credit. 
    • If Part II is needed, an entry is required for tentative credit amount to generate the form.
  7. If using the new Elective Payment option for tax year 2023 use the new Elective Payment fields.
    • If filing an elective payment on the Form 3800 the IRS requires a registration number that you must complete before filing the tax return. See here for more information.

1040 filers using the new Credit transferred or Gross elective payment fields will receive Critical Diagnostic ref 60077 until the calculations are ready and may want to file extensions for the upcoming 4/15 deadline.

Additionally, make sure to review each blue note referenced on the page to determine whether or not it is applicable to your client.

To generate Form 8936 in tax year 2023 for a 1065 module:

  1. Go to Screen 20.1, Fuel Tax Credits
  2. From the left side of the screen select Clean Vehicle Credits (8936).
  3. Begin by entering the Part I: Vehicle Details.
  4. Continue by answering the questions presented on the screen in order.
  5. Follow the directions on the input screen until you complete the input and generate the form, or until you see Stop here which indicates the vehicle doesn't qualify for a credit. 
    • If Part II is needed, an entry is required for tentative credit amount to generate the form.
  6. If using the new Elective Payment option for tax year 2023 use the new Elective Payment fields.
    • If filing an elective payment on the Form 3800 the IRS requires a registration number that you must complete before filing the tax return. See here for more information.
    • The 3800 will only generate for Partnerships if an Elective Payment or Transfer is used.

To generate Form 8936 in tax year 2023 for a 1120S module:

  1. Go to Screen 26.1, Fuel Tax Credits
  2. From the left side of the screen select Clean Vehicle Credits (8936).
  3. Begin by entering the Part I: Vehicle Details.
  4. Continue by answering the questions presented on the screen in order.
  5. Follow the directions on the input screen until you complete the input and generate the form, or until you see Stop here which indicates the vehicle doesn't qualify for a credit. 
    • If Part II is needed, an entry is required for tentative credit amount to generate the form.
  6. If using the new Elective Payment option for tax year 2023 use the new Elective Payment fields.
    • If filing an elective payment on the Form 3800 the IRS requires a registration number that you must complete before filing the tax return. See here for more information.
    • The 3800 will only generate for S Coproation if an Elective Payment or Transfer is used.
  1. Go to Screen 34, General Business and Vehicle Credits.
  2. Scroll down to Clean Vehicle Credits (8936).
  3. Enter a 2in the 1=alternative motor vehicle (8910), 2=plug-in electric drive motor vehicle (8936) (code 233) field.
    • Note: In 2012 this field reads: Vehicle credit type: 1=alternative motor (8910), 2=plug-in electric acquired before 2012 (8834), 3=plug-in electric drive motor (8936) (code 233).
  4. Under the Vehicle Information section, enter the following fields:
    • Date placed in service
    • Vehicle identification number (VIN)
    • Year
    • Make
    • Model
  5. Enter the amount of maximum credit available for this vehicle from the manufacturer's certificate in the Tentative credit [O] (code 140) field.
    • The $7,500 credit amount will automatically populate on Form 8936, lines 4, 15, and 18 without an entry in the Tentative credit [O] (code 140) field. However, if the credit available on the manufacturer's certificate is greater than $7,500, then the override must be used.
  6. Scroll down to the Business or Investment Use Percentage subsection and enter the following fields, if the vehicle was used for business:
    • Total mileage
    • Business mileage
    • Number of months of business/investment use (if not 12)
  7. Go to the Forms tab.
  8. Make sure that Form 8936 is generating and that any credit amount allowed on line 14 flows to the Form 3800.
Lacerte Tax

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