Last Updated : January 14, 2009
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8834

Form 8834

Qualified Electric Vehicle Credit

PURPOSE OF THE FORM :

Use form 8834 to figure the credit for qualified electric vehicle placed in service during 2007.

The credit for each qualified electric vehicle is the smaller of $1000 or 2.5% of the vehicle's cost reduced by the section 179 deduction.

QUALIFIED ELECTRIC VEHICLE:
A Qualified electric vehicle is any motor vehicle if all of the following apply.

  • Manufactured primarily for use on public streets, roads , and highways, and at least four wheels.
  • Powered primarily by an electric motor drawing current from rechargeable batteries, fuel cells, or other portable sources of electric current.
  • Originally used by the taxpayer.
  • Acquired for his own use and not for resale.

Exceptions:


The Qualified electric vehicle credit doenot apply to vehicles that are:

  • Operated exclusively on a rail or rails.
  • Used primarily outside the United States.
  • Used by a governmental unit or agency or any foreign person or entity, or
  • Used by a tax exempt organization unless the property is used mainly in an unrelated trade or business taxed under section 511.

PART - I TENTATIVE CREDIT :

Use a seperate column for each vehicle.
Unless the taxpayer elects not to claim the credit, the taxpayer must have to reduce the basis of each vehicle by the sum of the amounts entered on lines 7 for that vehicle.

Line 1:
Enter on this line the date the vehicle was placed in service. Use the MM/DD/YYYY format to enter the date.

Line 2:
Enter on this line the cost of vehicle for which the credit is claimed.

Line 3:
Enter on this line 179 expense deduction for this vehicle from Part I of FORM 4562, Depreciation and Amortization.

Line 4:
The program subtracts line 3 from line 2 for each of the vehicle seperately and enters the result on this line.

Line 5:
The program multiplies line 4 by 2.5% and enters the result on this line.

Line 6:
The program calculates this line based on the year the vehicle was placed in service.
Donot claim the credit for a vehicle placed in service in 2007 unless the taxpayer is a fiscal year taxpayer who placed the vehicle in service before the end of the his 2006-07 fiscal year.

Line 7:
The program calculates lower of line 5 or line 6 and enters the result on this line.

Line 8:
The program adds line 7 columns a , b and c and enters the result on this line.

Line 9:
The amount on this line comes from schedule K-1P/S and schedule K-1ET line named Qualified Electric Vehicle Credit.

Line 10:
The program adds line 8 and line 9 and enters the result on this line.

Line 11:
Enter the amount of any credits included on line 10 that are from a Passive activity. Generally A passive activity is a business activity in which the taxpayer didnot materially participate. Rental activities are generally passive activities, whether or not he materially participates.
Refer instructions of form 8582CR.

Line 12:
The program subtracts line 11 from line 10 and enters the result on this line.

Line 13:
Enter the qualified electric vehicle passive activity credits allowed for 2007 from FORM 8582-CR or FORM 8910.

Line 14:
The program calculates the tentative part of credit by adding lines 12 and line 13. This amount is reported on FORM 3800.

PART - II ALLOWABLE CREDIT

Line 15:
The amount on this line comes from FORM 1040 line 44 (tax) or FORM 1040NR line 41(tax).

Line 16a:
The amount on this line comes from FORM 1040 :
total of line 47 (child and dependent care benefits), line 48 ( credit for elderly and disabled) , line 49 (education credtis), Line 50 (residential energy credits) , line 52 (child tax credit) , line 53 ( Retirement savings contribution credit) , line 54 ( form 8396 line 13) , (form 8859 line 13) , (form 8839 line 18) .
OR from FORM 1040NR:
total of line 44 (child & dependent care benefits) , line 45 (residential energy credits) , line 47 (child tax credit) , line 48 (retirement savings contribution credit) , line 49 ( form 8396 line 13) , (form 8859 line 13) , (form 8839 line 18) .

Line 16b:
The amount on this line comes from FORM 1040 line 51 (foreign tax credit) or FORM 1040NR line 46(foreign tax credit).

Line 16c:
The taxpayer will have to manually enter the amount on this line to claim the credit.

Line 16d:
The program adds line 16a through line 16c and enters the result on this line.

Line 17:
The program subtracts line 16d from line 15 and enters the result on this line.If the result is negative then it is set as zero.

Line 18:
The amount on this line comes from FORM 6251 line 33 (tentative Minimum tax).
Although you may not owe Alternative Minimum tax , you must still figure the tentative minimum tax to figure your allowable credit.

Line 19:
The program subtracts line 18 from line 17 and enters the result on this line.If the result is negative then it is set as zero.

Line 20:
The program enters the lower of line 14 or line 19 here and reports this amount on FORM 1040 line 55 or FORM 1040NR line 50.
If you cannot use part of the personal portion of the credit because of the tax liability limit, the unused credit is lost.
The unused personal portion of the credit cannot be carried back or forward to other tax years.

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