Fillable Form 8396 - Mortgage Interest Credit

Form 8396 (2014)

Page

General Instructions

Specific Instructions

Part I—Current Year Mortgage Interest Credit

Future Developments

Line 1

For the latest information about developments related to Form 8396

and its instructions, such as legislation enacted after they were

Enter the interest you paid during the year on the loan amount

published, go to

(certified indebtedness amount) shown on your MCC. In most

cases, this will be the amount in box 1 on Form 1098, Mortgage

Purpose of Form

Interest Statement, or on a similar statement you received from your

Use Form 8396 to figure the mortgage interest credit for 2014 and

mortgage holder. If the loan amount on your MCC is less than your

any credit carryforward to 2015.

total mortgage loan, you must allocate the interest to determine the

part that relates to the loan covered by the MCC. See Pub. 530 for

Who Can Claim the Credit

an example of how to allocate the interest.

You can claim the credit only if you were issued a qualified

Line 2

Mortgage Credit Certificate (MCC) by a state or local governmental

The certificate credit rate cannot be less than 10% or more than

unit or agency under a qualified mortgage credit certificate

50%.

program.

Line 3

Certificates issued by the Federal Housing

▲

Administration, Department of Veterans Affairs, and

If you refinanced, see Refinanced Mortgage on this page.

Farmers Home Administration, and Homestead Staff

If the certificate credit rate shown on line 2 is more than 20%,

Exemption Certificates do not qualify for the credit.

CAUTION

multiply line 1 by line 2, but do not enter more than $2,000 on line 3.

The home to which the certificate relates must be your main

If you and someone else (other than your spouse if filing jointly) held

home and also must be located in the jurisdiction of the

an interest in the home, the $2,000 limit must be allocated to each

governmental unit that issued the certificate.

owner in proportion to the interest held. See Dividing the Credit in

If the interest on the mortgage was paid to a related person, you

Pub. 530 for an example of how to make the allocation.

cannot claim the credit.

Reduction of home mortgage interest deduction on Schedule A

(Form 1040). If you itemize your deductions on Schedule A, you

Refinanced Mortgage

must reduce the amount of home mortgage interest you would

You can refinance your mortgage without losing this credit if your

otherwise deduct on Schedule A by the amount on Form 8396, line

existing MCC is reissued and the reissued certificate meets all of

3, and report the reduced amount on Schedule A. You must do this

the following conditions.

even if part of the amount on line 3 is carried forward to 2015.

• It must be issued to the holder(s) of the existing certificate for the

Line 8—Credit Limit Worksheet

same property.

Keep for Your Records

• It must entirely replace the existing certificate. The holder cannot

retain any portion of the outstanding balance of the existing

1. Enter the amount from Form 1040, line 47, or

certificate.

Form 1040NR, line 45

• The certified indebtedness on the reissued certificate cannot

2. Form 1040 filers: Enter the amounts from Form

exceed the outstanding balance shown on the existing certificate.

1040, lines 48 through 51; line 12 of the Line 11

• The credit rate of the reissued certificate cannot exceed the credit

Worksheet in Pub. 972*; Form 5695, line 30;

rate of the existing certificate.

Form 8910, line 15; Form 8936, line 23; and

• The reissued certificate cannot result in a larger amount on line 3

Schedule R (Form 1040A or 1040), line 22.

than would otherwise have been allowable under the existing

Form 1040NR filers: Enter the amounts from

certificate for any tax year.

Form 1040NR, lines 46 through 48; line 12 of the

For each tax year, you must determine the amount of credit that

Line 11 Worksheet in Pub. 972*; Form 5695, line

you would have been allowed using your original MCC. To do this,

30; Form 8910, line 15; and Form 8936, line 23.

multiply the interest that was scheduled to be paid on your original

mortgage by the certificate rate on your original MCC. The result

3. Subtract line 2 from line 1. Enter this amount on

may limit your line 3 credit allowed when you have a reissued MCC,

Form 8396, line 8. If zero or less, enter -0- here

even if your new loan has a lower interest rate.

and on Form 8396, lines 8 and 9, and go to Part

If the certificate credit rates are different in the year you

II of Form 8396

refinanced, attach a statement showing separate calculations for

lines 1, 2, and 3 for the applicable parts of the year when the

*If you are not claiming the child tax credit, you do not need Pub.

original MCC and the reissued MCC were in effect. Combine the

972.

amounts from both calculations for line 3. Enter that total on line 3

Part II—Mortgage Interest Credit Carryforward to

of the form and enter “see attached” on the dotted line next to

2015

line 2.

If the amount on line 9 is less than the amount on line 7, you may

For more details, see Regulations section 1.25-3(p).

have an unused credit to carry forward to the next 3 tax years or until

Recapture of Credit

used, whichever comes first. The current year credit is used first and

then the prior year credits, beginning with the earliest prior year.

If you buy a home using an MCC and sell it within 9 years, you may

have to recapture (repay) some of the credit. See Pub. 523, Selling

If you have any unused credit to carry forward to 2015, keep a

Your Home, and Form 8828, Recapture of Federal Mortgage

copy of this form to figure your credit for 2015.

Subsidy.

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If you are subject to the $2,000 credit limit because

Additional Information

your certificate credit rate is more than 20%, no amount

over the $2,000 limit (or your prorated share of the

See Pub. 530, Tax Information for Homeowners, for more details.

$2,000 if you must allocate the credit) may be carried

CAUTION

forward for use in a later year.

Form 8396 - Mortgage Interest Credit - 2014 Page 2

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