Form 8910 Instructions: Alternative Motor Vehicle Credit

IRS Form 8910 is the tax document used to calculate and claim the Alternative Motor Vehicle Credit. This nonrefundable credit is for taxpayers who placed a new qualified fuel cell motor vehicle in service. The credit expired for vehicles purchased after December 31, 2021. A taxpayer may only claim this credit if they purchased a qualifying vehicle in 2021 but placed it in service in a later year. For most new clean energy vehicles purchased more recently, the Clean Vehicle Credit, claimed on Form 8936, has effectively replaced the Alternative Motor Vehicle Credit.

Determining Your Eligibility

To qualify for the Alternative Motor Vehicle Credit, both the taxpayer and the vehicle must meet specific standards. The taxpayer must have acquired the vehicle for their own use or to lease to others, not for the purpose of resale. The original use of the vehicle must begin with the taxpayer, meaning it cannot have been previously owned. The vehicle must be used predominantly within the United States. For vehicles that are leased, only the lessor, who is the legal owner, is permitted to claim the credit.

The vehicle must be a new qualified fuel cell motor vehicle. This is defined as a vehicle propelled by power derived from one or more cells that convert chemical energy into electricity by combining oxygen with hydrogen. It must have at least four wheels and a gross vehicle weight rating of less than 14,000 pounds. The vehicle must also meet certain emissions standards as certified by the Environmental Protection Agency.

Information Required to Complete Form 8910

Before beginning Form 8910, you must gather several pieces of information. You will need the vehicle’s year, make, model, and its Vehicle Identification Number (VIN), which is found on the dashboard, driver-side doorjamb, or vehicle registration documents. The date the vehicle was “placed in service” is also required; this is the date the vehicle was first made available for a specific use, which may be different from the purchase date.

You must also have the cost or other basis of the vehicle, which is the purchase price including any fees and taxes. If the vehicle is used for both business and personal purposes, you will need to determine the business/investment use percentage. This is calculated by dividing the number of miles driven for business or investment purposes by the total miles driven during the year.

A manufacturer’s certification letter is also needed. Manufacturers of qualifying vehicles certify to the IRS that a specific make, model, and year is eligible for the credit and will state the maximum credit amount. You can usually obtain a copy of this letter from the vehicle dealer or the manufacturer’s website.

Finally, you will need figures from your other tax forms to calculate the final credit limitation. These include your regular tax liability from Form 1040 and your tentative minimum tax from Form 6251.

How to Complete and File Form 8910

Completing Form 8910 involves two main parts. You will begin with Part I to determine your tentative credit amount. This calculation starts with a base credit amount that varies based on the vehicle’s gross vehicle weight rating and fuel economy.

After establishing the base amount, you will multiply it by your business/investment use percentage if the vehicle was not used 100% for business. The result is then compared to the credit amount certified by the vehicle’s manufacturer. Your tentative credit is the smaller of these two figures.

Next, you will proceed to Part II to calculate any limitations on the credit you can take. You will use your regular tax liability from your Form 1040 and figures for certain other credits claimed on Schedule 3. You will also need the tentative minimum tax from Form 6251 to determine the final allowable Alternative Motor Vehicle Credit.

Once you have calculated the final amount, you will report it on Schedule 3 (Form 1040), “Additional Credits and Payments.” The credit from Form 8910 is a nonrefundable credit. The completed Form 8910 must be attached to your Form 1040 or other main tax return when you file.