IRS Form: 8936

If you purchased an electric vehicle, plug-in hybrid, or qualifying fuel-cell vehicle, you may have questions about whether you can claim a federal tax credit. IRS Form 8936, Clean Vehicle Credits, was used to calculate several federal incentives for qualifying new, previously owned, and commercial clean vehicles.

For taxpayers in Grand Rapids, Kentwood, Wyoming, and throughout West Michigan, understanding Form 8936 remains important when preparing tax returns for eligible vehicle purchases made before the federal credits expired.

Important tax update: Under federal law enacted in 2025, the new clean vehicle credit, previously owned clean vehicle credit, and qualified commercial clean vehicle credit are generally unavailable for vehicles acquired after September 30, 2025. Certain earlier purchases may still qualify if all applicable requirements are met. See the official IRS clean vehicle tax credit guidance.

What Is IRS Form 8936?

IRS Form 8936 is used to calculate qualifying federal clean vehicle credits. Depending on the vehicle and the taxpayer, the form covers three main categories:

• New clean vehicles: Certain qualifying new electric vehicles and fuel-cell vehicles.
• Previously owned clean vehicles: Certain eligible used electric vehicles and fuel-cell vehicles purchased from a dealer.
• Qualified commercial clean vehicles: Certain qualifying vehicles acquired for business or commercial use.

Schedule A (Form 8936) provides vehicle-by-vehicle calculations. The information reported may include the vehicle identification number (VIN), acquisition and placed-in-service details, and the applicable credit calculation.

Not every electric vehicle qualifies. Eligibility depends on the vehicle, the purchaser, income limits where applicable, purchase price restrictions, manufacturer and dealer reporting, and other requirements.

Can You Still Claim a Clean Vehicle Tax Credit in 2026?

Although the federal clean vehicle credits have expired for new acquisitions after September 30, 2025, some taxpayers may still need Form 8936 when filing a 2025 or other applicable tax return.

For example, a taxpayer who acquired an eligible vehicle by the deadline may still need to determine whether the purchase qualifies under the rules that applied to that transaction.

The IRS explains that a vehicle is generally considered acquired when the taxpayer enters into a binding written contract and makes a payment. A qualifying vehicle also must be placed in service, generally meaning the taxpayer takes possession of it.

A taxpayer who transferred the credit to a registered dealer at the time of purchase must still report the transaction on the tax return and reconcile the credit. If the taxpayer ultimately does not qualify, repayment of the transferred credit may be required.

Do not assume that a vehicle qualifies simply because it is electric or because the dealer advertised a tax credit. Review the purchase date, documentation, vehicle eligibility, and IRS reporting requirements.

What Were the New Clean Vehicle Credit Requirements?

Under the rules applicable to eligible purchases before the deadline, a qualifying new clean vehicle generally had to meet technical requirements involving its battery, electric propulsion, vehicle weight, and manufacturing.

Other requirements included:

• The taxpayer generally had to own the vehicle rather than lease it.
• The vehicle had to be acquired for use or for leasing to others, rather than for resale.
• The vehicle generally had to be used primarily in the United States.
• The original use of the vehicle had to begin with the taxpayer.
• Applicable modified adjusted gross income limits had to be met.
• The vehicle had to satisfy the applicable manufacturer, assembly, and price requirements.

For eligible purchases under the applicable rules, the maximum new clean vehicle credit was generally up to $7,500, depending on the vehicle and its qualifying battery components and critical minerals.

These historical limits should not be treated as a guarantee that a particular purchase qualifies. The rules and eligible vehicle lists changed over time.

What About Used Electric Vehicles?

The previously owned clean vehicle credit was designed to provide an incentive for certain eligible used electric and fuel-cell vehicle purchases.

Under the applicable rules, a qualifying used vehicle generally had to:

• Have a sales price of no more than $25,000.
• Be at least two model years older than the calendar year of purchase.
• Be purchased from a qualified dealer.
• Meet battery, weight, and other vehicle requirements.
• Be the first qualifying transfer to an eligible buyer after August 16, 2022.
• Meet the buyer’s income and other eligibility requirements.

For an eligible purchase made before the expiration date, the credit was generally the lesser of $4,000 or 30% of the vehicle’s sales price.

The credit is not available for vehicles acquired after September 30, 2025. Taxpayers reviewing an earlier purchase should use the rules applicable to that transaction and retain the dealer’s required documentation.

How Do Businesses Use Form 8936?

Businesses may have used Form 8936 to calculate the qualified commercial clean vehicle credit for eligible vehicles placed in service before the applicable expiration date.

The commercial credit generally depended on the vehicle’s eligible basis, incremental cost, and whether it was powered by gasoline or diesel. The maximum credit was generally $7,500 for qualifying vehicles under 14,000 pounds gross vehicle weight and $40,000 for qualifying heavier vehicles.

Special rules applied to partnerships, S corporations, tax-exempt entities, and other business taxpayers. Business use, depreciation, ownership, and potential interaction with other credits could also affect the calculation.

Businesses should keep purchase agreements, invoices, vehicle identification numbers, delivery records, dealer reports, and depreciation records.

How Can AIM Financial Help?

Clean vehicle tax credits can be complicated, especially when a credit was transferred to a dealer or when a taxpayer is preparing a return for a year in which the rules changed.

AIM Financial helps taxpayers in Grand Rapids, Kentwood, Wyoming, and throughout West Michigan understand tax-return reporting requirements and organize the documentation needed for tax preparation.

Before filing a return involving an electric or other qualifying clean vehicle, gather your purchase agreement, dealer tax-credit report, VIN, delivery date, and any paperwork showing that a credit was transferred at the time of sale.

Contact AIM Financial for tax preparation assistance if you purchased a qualifying vehicle before the federal deadline and need help determining how the transaction should be reported.

For official details, visit the IRS pages for Form 8936 and its instructions and Clean Vehicle Tax Credits.

This article is for general educational purposes only. Eligibility depends on the transaction date, vehicle, taxpayer circumstances, and applicable federal law.