Form 8396 Mortgage Interest Credit

(For Holders of Qualified Mortgage Credit Certificates Issued by

OMB No. 1545-0074

2016
State or Local Governmental Units or Agencies)
Department of the Treasury Information about Form 8396 and its instructions is at www.irs.gov/form8396.
Attachment
Internal Revenue Service (99) Attach to Form 1040 or 1040NR. Sequence No. 138
Name(s) shown on your tax return Your social security number

Enter the address of your main home to which the qualified mortgage certificate relates if it is different from the address shown on your tax return.

Name of Issuer of Mortgage Credit Certificate Mortgage Credit Certificate Number Issue Date

Before you begin Part I, figure the amounts of any of the following credits you are claiming: Credit for the elderly or the disabled,
alternative motor vehicle credit, and qualified plug-in electric drive motor vehicle credit.
Part I Current Year Mortgage Interest Credit
1 Interest paid on the certified indebtedness amount. If someone else (other than your spouse if
filing jointly) also held an interest in the home, enter only your share of the interest paid . . . 1

2 Enter the certificate credit rate shown on your mortgage credit certificate. Do not enter the
interest rate on your home mortgage . . . . . . . . . . . . . . . . . . . . 2 %

3 If line 2 is 20% or less, multiply line 1 by line 2. If line 2 is more than 20%, or you refinanced
your mortgage and received a reissued certificate, see the instructions for the amount to enter . 3
You must reduce your deduction for home mortgage interest on Schedule A (Form 1040)
by the amount on line 3.

4 Enter any 2013 credit carryforward from line 16 of your 2015 Form 8396 . . . . . . . . 4

5 Enter any 2014 credit carryforward from line 14 of your 2015 Form 8396 . . . . . . . . 5

6 Enter any 2015 credit carryforward from line 17 of your 2015 Form 8396 . . . . . . . . 6

7 Add lines 3 through 6 . . . . . . . . . . . . . . . . . . . . . . . . . 7

8 Limitation based on tax liability. Enter the amount from the Credit Limit Worksheet (see
instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

9 Current year mortgage interest credit. Enter the smaller of line 7 or line 8. Also include this
amount in the total on Form 1040, line 54, or Form 1040NR, line 51. Check box c on that line and
enter 8396 in the space next to that box . . . . . . . . . . . . . . . . . . . 9
Part II Mortgage Interest Credit Carryforward to 2017. (Complete only if line 9 is less than line 7.)

10 Add lines 3 and 4 . . . . . . . . . . . . . . . . . . . . . . . . . . 10

11 Enter the amount from line 7 . . . . . . . . . . . . . . . . . . . . . . . 11

12 Enter the larger of line 9 or line 10 . . . . . . . . . . . . . . . . . . . . . 12

13 Subtract line 12 from line 11 . . . . . . . . . . . . . . . . . . . . . . . 13

14 2015 credit carryforward to 2017. Enter the smaller of line 6 or line 13 . . . . . . . . 14

15 Subtract line 14 from line 13 . . . . . . . . . . . . . . . . . . . . . . . 15

16 2014 credit carryforward to 2017. Enter the smaller of line 5 or line 15 . . . . . . . . 16

17 2016 credit carryforward to 2017. Subtract line 9 from line 3. If zero or less, enter -0- . . . 17
For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 62502X Form 8396 (2016)
Form 8396 (2016) Page 2

General Instructions Specific Instructions

Future Developments Part ICurrent Year Mortgage Interest Credit
For the latest information about developments related to Form 8396 Line 1
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 www.irs.gov/form8396. (certified indebtedness amount) shown on your MCC. In most
Purpose of Form cases, this will be the amount in box 1 on Form 1098, Mortgage
Interest Statement, or on a similar statement you received from your
Use Form 8396 to figure the mortgage interest credit for 2016 and mortgage holder. If the loan amount on your MCC is less than your
any credit carryforward to 2017. total mortgage loan, you must allocate the interest to determine the
Who Can Claim the Credit part that relates to the loan covered by the MCC. See Pub. 530 for
an example of how to allocate the interest.
You can claim the credit only if you were issued a qualified
Mortgage Credit Certificate (MCC) by a state or local governmental Line 2
unit or agency under a qualified mortgage credit certificate The certificate credit rate cannot be less than 10% or more than
program. 50%.
Homestead Staff Exemption Certificates, and certificates Line 3

!CAUTION
issued by the Federal Housing Administration,
Department of Veterans Affairs, and Farmers Home
Administration do not qualify for the credit.
If you refinanced, see Refinanced Mortgage on this page.
If the certificate credit rate shown on line 2 is more than 20%,
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
Refinanced Mortgage (Form 1040). If you itemize your deductions on Schedule A, you
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 2017.
It must be issued to the holder(s) of the existing certificate for the
same property. Line 8Credit Limit Worksheet
It must entirely replace the existing certificate. The holder cannot Keep for Your Records
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 . . . . . . . . 1.
The certified indebtedness on the reissued certificate cannot
exceed the outstanding balance shown on the existing certificate. 2. Form 1040 filers: Enter the amounts from Form
The credit rate of the reissued certificate cannot exceed the credit 1040, lines 48 through 51; line 12 of the Line 11
rate of the existing certificate. Worksheet in Pub. 972*; Form 5695, line 30;
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
certificate for any tax year. Form 1040NR filers: Enter the amounts from
For each tax year, you must determine the amount of credit that Form 1040NR, lines 46 through 48; line 12 of the
you would have been allowed using your original MCC. To do this, Line 11 Worksheet in Pub. 972*; Form 5695, line
multiply the interest that was scheduled to be paid on your original 30; Form 8910, line 15; and Form 8936, line 23. 2.
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 . . . . . . . . . . 3.
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 filing Form 2555 or Form 2555-EZ, enter instead the
original MCC and the reissued MCC were in effect. Combine the amount, if any, from line 13 of the Child Tax Credit Worksheet in
amounts from both calculations for line 3. Enter that total on line 3 Pub. 972. If you are not claiming the child tax credit, you do not
of the form and enter see attached on the dotted line next to need Pub. 972.
line 2.
Part IIMortgage Interest Credit Carryforward to
For more details, see Regulations section 1.25-3(p).
2017
Recapture of Credit If the amount on line 9 is less than the amount on line 7, you may
If you buy a home using an MCC and sell it within 9 years, you may have an unused credit to carry forward to the next 3 tax years or until
have to recapture (repay) some of the credit. See Pub. 523, Selling used, whichever comes first. The current year credit is used first and
Your Home, and Form 8828, Recapture of Federal Mortgage then the prior year credits, beginning with the earliest prior year.
Subsidy. If you have any unused credit to carry forward to 2017, keep a
Additional Information copy of this form to figure your credit for 2017.
If you are subject to the $2,000 credit limit because
See Pub. 530, Tax Information for Homeowners, for more details.

!CAUTION
your certificate credit rate is more than 20%, no amount
over the $2,000 limit (or your prorated share of the
$2,000 if you must allocate the credit) may be carried
forward for use in a later year.