Section references are to the Internal Revenue Code.
Use Form 8910 to figure your credit for alternative motor vehicles you placed in service during your tax year. The credit attributable to depreciable property (vehicles used for business or investment purposes) is treated as a general business credit. Any credit not attributable to depreciable property is treated as a personal credit.
Taxpayers that are not partnerships or S corporations, and whose only source of this credit is from those pass-through entities, are not required to complete or file this form. Instead, they can report this credit directly on line 1s of Form 3800.
Caution: If your vehicle was used only for personal purposes during the year, and you owe alternative minimum tax (for example, Form 1040, line 45, is more than zero), do not complete Form 8910 because your allowable credit will be zero.
An alternative motor vehicle is a new vehicle that qualifies as one of the following four types of vehicles.
Generally, for a qualified alternative fuel vehicle, an advanced lean burn technology vehicle, or a qualified hybrid vehicle, you can rely on the manufacturer's (or, in the case of a foreign manufacturer, its domestic distributor's) certification that a specific make, model, and model year vehicle qualifies for the credit and the maximum amount of the credit for which it qualifies.
If, however, the IRS publishes an announcement that the certification for any specific make, model, and model year vehicle has been withdrawn, you cannot rely on the certification for such a vehicle purchased after the date of publication of the withdrawal announcement.
If you purchased a vehicle and its certification was withdrawn on or after the date of purchase, you can rely on such certification even if you had not placed the vehicle in service or claimed the credit by the date the withdrawal announcement was published by the IRS. The IRS will not attempt to collect any understatement of tax liability attributable to reliance on the certification as long as you purchased the vehicle on or before the date the IRS published the withdrawal announcement.
In addition to certification, the following requirements must be met to qualify for the credit:
Exception. If you are the seller of a new vehicle to a tax-exempt organization, governmental unit, or a foreign person or entity, and the use of that vehicle is described in section 50(b)(3) or (4), you can claim the credit, but only if you clearly disclose in writing to the purchaser the amount of the tentative credit allowable for the vehicle (from line 5 of Form 8910).
For details, see section 30B, Notice 2006-9 (qualified hybrid vehicles weighing 8,500 pounds or less and advanced lean burn technology vehicles), Notice 2007-46 (qualified hybrid vehicles weighing more than 8,500 pounds), and Notice 2006-54 (qualified alternative fuel vehicles). You can find Notice 2006-9 on page 413 of Internal Revenue Bulletin (IRB) 2006-6 at www.irs.gov/pub/irs-irbs/irb06-06.pdf. You can find Notice 2007-46 on page 1342 of IRB 2007-23 at www.irs.gov/pub/irs-irbs/irb07-23.pdf. You can find Notice 2006-54 on page 1180 of IRB 2006-26 at www.irs.gov/pub/irs-irbs/irb06-26.pdf.
The credit for qualified hybrid vehicles weighing 8,500 pounds or less and advanced lean burn technology vehicles is subject to a phaseout (reduction) once the vehicle manufacturer (or, for a foreign manufacturer, its U.S. distributor) sells 60,000 of these vehicles to a retailer for use in the United States after 2005. The phaseout begins in the second calendar quarter after the quarter in which the 60,000th vehicle was sold. Then the phaseout allows 50% of the full credit for 2 quarters, 25% of the full credit for 2 additional quarters, and no credit thereafter.
Unless you elect not to claim the credit, you may have to reduce the basis of each vehicle by the sum of the amounts entered on lines 7 and 11 for that vehicle.
If the vehicle no longer qualifies for the credit, you may have to recapture part or all of the credit. For details, see section 30B(h)(8).
Enter the maximum credit allowable (before reduction under the phaseout rules) for the year, make, and model of vehicle you entered on line 1. You can generally rely on the manufacturer's (or domestic distributor's) certification of the maximum credit allowable as explained above.
Maximum credit allowable. Maximum credit allowable amounts acknowledged by the IRS for model years 2006 to 2008 through December 2007 are listed below.
Caution: This list contains information from IRS news releases available at the time this form went to print. To check for information on model year 2005 vehicles or for later IRS news releases that may update this list, visit www.irs.gov and search for "hybrid."
Use the following list to determine the percentage to enter on line 4.
Enter the percentage of business/investment use.
Enter 100% if the vehicle is used solely for business purposes or you are claiming the credit as the seller of the vehicle.
If the vehicle is used for both business purposes and personal purposes, determine the percentage of business use by dividing the number of miles the vehicle is driven during the year for business purposes or for the production of income (not to include any commuting mileage) by the total number of miles the vehicle is driven for all purposes. Treat vehicles used by your employees as being used 100% for business/investment purposes if the value of personal use is included in the employees' gross income, or the employees reimburse you for the personal use. If you report the amount of personal use of the vehicle in your employee's gross income and withhold the appropriate taxes, enter 100% for the percentage of business/investment use.
If during the tax year you convert property used solely for personal purposes to business/investment use (or vice versa), figure the percentage of business/ investment use only for the number of months you use the property in your business or for the production of income. Multiply that percentage by the number of months you use the property in your business or for the production of income and divide the result by 12. For example, if you converted a vehicle to 50% business use for the last 6 months of the year, you would enter 25% on line 6 (50% multiplied by 6 divided by 12).
For more information, see Pub. 463, Travel, Entertainment, Gift, and Car Expenses.
Enter total alternative motor vehicle credits from:
Although you may not owe alternative minimum tax (AMT), you must still figure the tentative minimum tax (TMT) to figure your allowable credit. Complete and attach the applicable AMT form or schedule and enter the TMT on line 16.
If you cannot use part of the personal portion of the credit because of the tax liability limit, the unused credit is lost. The unused personal portion of the credit cannot be carried back or forward to other tax years.
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The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for individual taxpayers filing this form is approved under OMB control number 1545-0074 and is included in the estimates shown in the instructions for their individual income tax return. The estimated burden for all other taxpayers who file this form is shown below.
Recordkeeping 9 hr., 19 min. Learning about the law or the form 12 min. Preparing and sending the form to the IRS 21 min.
If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. See the instructions for the tax return with which this form is filed.