Generating Form 8936, Clean Vehicle Credit in Lacerte

This article will help you generate Form 8936 in any tax module. If the information is for a passthrough or business activity, you need to indicate this in the program. See the additional set of instructions here.

See steps for:

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.

Individual

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 Taxpayer, Spouse, 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.

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

Partnership

1. Go to Screen 20, Credits, then Screen 20.7, Clean Vehicle Credits (8936). You can find this by going to Screen 20 in the Details tab, and then using the top left panel to locate Clean Vehicle Credits (8936).
2. If this is related to a business activity, in the Credits section, enter the Form (Ctrl+T) using the dropdown, and the Activity name or number (Ctrl+T).
   • If this is not related to a business activity, continue to step 3.
3. Locate the Clean Vehicle Credit (8936) section
4. Begin by entering the Part I: Vehicle Details
5. Continue by answering the questions presented on Screen 20.7 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.

Corporate

1. Go to Screen 28, General Business Credits (3800), then select Screen 28.1, Clean Vehicle Credits (8936). You can find this by going to Screen 28 in the Details tab, and then using the top left panel to locate Clean Vehicle Credits (8936).
2. If this is related to a business activity, in the Credits section, enter the Form (Ctrl+T) using the dropdown, and the Activity name or number (Ctrl+T).
   • If this is not related to a business activity, continue to step 3.
3. Locate the Clean Vehicle Credit (8936) section
4. Begin by entering the Part I: Vehicle Details
5. Continue by answering the questions presented on Screen 28.1 in order, one at a time.
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. 

S-Corp

1. Go to Screen 26.7, Credits, and then select Clean Vehicle Credits (8936). You can find this by going to Screen 26 in the Details tab, and then using the top left panel to locate Clean Vehicle Credits (8936).
2. If this is related to a business activity, in the Credits section, enter the Form (Ctrl+T) using the dropdown, and the Activity name or number (Ctrl+T).
   • If this is not related to a business activity, continue to step 3.
3. Locate the Clean Vehicle Credit (8936) section
4. Begin by entering the Part I: Vehicle Details.
5. Continue by answering the questions presented on Screen 26.7 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.

Entering the information as a passthrough or business activity

1. Go to Screen 34, General Business and Vehicle Credits.
2. Under the Credits section, select the type of Form (Ctrl+T).
   • Schedule C
   • Schedule E (rental/royalty)
   • Schedule F/ Form 4835
   • Schedule E (partnership)
   • Schedule E (S corporation)
   • Schedule E (estate or trust)
3. Select the specific Activity name or number (Ctrl+T) for this credit.
   • Click Add from the left navigation panel to add additional activities.
4. Scroll down to the Vehicle Credits (8910, 8936) section.
5. Under the Vehicle Information subsection, enter the Section 179 deduction (code 231), if applicable.
6. Under the Business or Investment Use Percentage subsection, enter information in the applicable fields:
   • Total mileage (code 141)
   • Business mileage (code 142)
   • Number of months of business/investment use (if not 12) (code 143)
   • Plug-in electric drive motor vehicle credit from passthroughs (8936) (code 240)
7. Follow the above instructions for your vehicle.