Form 8916 Instructions: A Line-by-Line Explanation

Form 8911 is a tax document used by individuals and businesses to claim the Alternative Fuel Vehicle Refueling Property Credit. This credit applies to the costs of acquiring and installing qualifying refueling equipment placed in service during the tax year. The credit covers a range of technologies, from electric vehicle chargers to equipment that dispenses other clean fuels. An individual who installs a charger at their home can claim it, as can a business that installs refueling infrastructure for its fleet or customers. The calculated credit is then used to reduce the filer’s overall tax liability.

Determining Eligibility for the Credit

Eligibility for the credit hinges on the taxpayer, the nature of the property, and where it is installed. For individuals, the refueling property must be installed at the taxpayer’s principal residence, which is the home you live in for most of the year. The credit is intended to offset the cost of setting up a personal refueling station, most commonly an electric vehicle charger.

For businesses, location requirements were updated for property placed in service starting January 1, 2023. Business property must be located within an eligible census tract, which is typically a low-income community or a non-urban area. Online tools are available to help taxpayers determine if a property’s location qualifies. This rule helps direct the incentive toward developing refueling infrastructure in designated areas.

The property must be new equipment, meaning its original use begins with you. It must be used to store or dispense an alternative fuel, such as electricity, natural gas, propane, hydrogen, or certain biofuel blends like E85. As of 2023, qualifying property was expanded to include chargers for 2- and 3-wheeled vehicles and bidirectional charging equipment. For businesses, the property must also be depreciable and can include related equipment like storage tanks in addition to the dispenser or charger.

Information and Documents Needed to Complete Form 8911

The cost basis of the refueling property is a primary figure needed to complete the form. The cost basis includes not just the purchase price of the equipment, but also any costs associated with its installation. You should collect all invoices and receipts for the equipment and any labor charges from contractors who installed the unit.

If the property is used for both business and personal activities, you will need to determine the business/investment use percentage. This calculation is based on the amount of time the property is used for commercial purposes versus personal convenience. For example, if a charger is used 60% of the time for a business vehicle and 40% for a personal vehicle, the business use percentage is 60%. This percentage is applied to the cost basis to find the amount eligible for the business-related credit.

You will need purchase invoices, receipts for installation costs, and records detailing the date the property was placed in service. The “placed in service” date is the day the property is ready and available for its specific use, which may be different from the purchase date.

Line-by-Line Guide to Filling Out Form 8911

Part I is for reporting property you placed in service during the tax year. You will begin by entering the physical address of where the property was installed. Next, you will input the date the property was placed in service.

You will then enter the cost basis of the property. For personal use property, the credit is 30% of the cost, with the total credit for each item capped at $1,000. For example, if a home charger cost $2,500 including installation, the potential credit is $750, which is below the $1,000 limit.

For business property, the base credit is 6% of the cost basis, up to a maximum of $100,000 per item. If the project meets prevailing wage and apprenticeship requirements, the credit rate increases to 30%, with the same $100,000 cap. You will enter your cost and apply the appropriate percentage, ensuring the result does not exceed the maximum limit.

Part II of the form addresses credits from pass-through entities. If you are a partner in a partnership or a shareholder in an S corporation that installed qualifying property, the entity passes your share of the credit to you. The entity provides a Schedule K-1 showing your portion of the credit, which you report in this section. The form combines this with the credit from your own property to arrive at your total credit.

Filing Form 8911 and Claiming the Credit on Your Tax Return

Once Form 8911 is complete, the final credit amount is transferred to your main income tax return. The specific location for the credit depends on whether you are filing as an individual or a business.

Individual taxpayers carry the credit amount to Schedule 3 (Form 1040), “Additional Credits and Payments.” This schedule is used to report various tax credits that are not claimed directly on the main Form 1040. The credit from Form 8911 is combined with any other applicable credits on Schedule 3, and the total is then entered on Form 1040, reducing your overall tax.

For businesses, this credit is part of the general business credit. The amount from Form 8911 is reported on Form 3800, “General Business Credit.” Form 3800 is used to consolidate numerous individual business credits into a single total. You must attach both Form 8911 and Form 3800 to your business income tax return, such as Form 1120 for corporations or Form 1065 for partnerships.