Which tax Form to use for purchasing an electric vehicle

The Federal Tax Credit for purchasing an electric vehicle, such as a Tesla, is claimed on IRS Form 8936, “Qualified Plug-in Electric Drive Motor Vehicle Credit.” This credit is commonly referred to as the Electric Vehicle Tax Credit.

After completing Form 8936 to calculate the amount of your tax credit, you would then enter the total credit amount on your IRS Form 1040, specifically on Schedule 3 (Form 1040), “Additional Credits and Payments.” The amount from Schedule 3 then carries over to Line 20 of Form 1040.

Here’s how you would fill it out:

1. Complete Form 8936 to calculate your Electric Vehicle Tax Credit.
2. Enter the total credit amount on Schedule 3 (Form 1040).
3. The credit amount from Schedule 3 transfers to Line 20 of Form 1040.