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Form 8396: Mortgage Interest Credit
IRS Form 8396 is used to calculate the mortgage interest credit for the 2025 tax year and any credit carryforward to 2026. It is filed by taxpayers who have a qualified Mortgage Credit Certificate, and the credit rate cannot be less than 10% or more than 50%.
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IRS Form 8396 - Mortgage Interest Credit
IRS Form 8396 is used to calculate the mortgage interest credit for the 2025 tax year and any credit carryforward to 2026. It is filed by taxpayers who have a qualified Mortgage Credit Certificate, and the credit rate cannot be less than 10% or more than 50%.
Risk Radar
Scan points- 1Exceeding the $2,000 credit limit when the rate is over 20% triggers a disallowed credit.
- 2Entering a certificate credit rate below 10% or above 50% on line 2.
- 3Failing to cap line 3 at $2,000 when the credit rate exceeds 20%.
- 4Omitting the “see attached” notation next to line 2.
- 5Not allocating the $2,000 limit proportionally when multiple owners share the home.
Plain English
Form 8396 lets you claim a credit for the mortgage interest you paid if you have a qualified Mortgage Credit Certificate. It figures the credit for the current year and tracks any unused credit that can be carried forward to the next three years. The form also reduces the amount you can deduct for mortgage interest on Schedule A. You must follow the specific calculations on the lines provided.
Submission Date
- Filing date: 2025-12-17 09:10:36
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when you are claiming the mortgage interest credit for tax year 2025 (and any carryforward to 2026) and you hold a qualified Mortgage Credit Certificate issued by a state or local governmental unit or agency.
- Do not use it when the certificate was issued by the Federal Housing Administration, Department of Veterans Affairs, Farmers Home Administration, or is a Homestead Staff Exemption, or when the mortgage interest was paid to a related person, or the home is not your main residence.
- Check Form 8828 instead when you must recapture the credit because you sold the home within nine years.
Form selector
Use this form or another form?
You have additional nonrefundable credits to claim
Credits affect the credit limit worksheet on line 8
✓ Confirm total of credits from Schedule 3 matches line 8 calculation
You are filing a nonresident alien return
Line 8 instructions differ for 1040‑NR filers
✓ Verify line 19 amount on Form 1040‑NR before using it
You need to recapture credit after selling the home
Recapture of credit is reported on Form 8828
✓ Ensure the sale occurred within 9 years before filing Form 8828
Deadline or filing window
Not stated in the official source.
Checklist
What you need before filling it out
Line 1 – Interest paid
Mortgage interest statement (Form 1098) · Box 1 on Form 1098
Line 3 – Credit amount
Qualified Mortgage Credit Certificate · Certificate rate and certified indebtedness
Line 8 – Credit limit worksheet
Amounts from Form 1040/1040‑SR/1040‑NR line 18 and line 19, Schedule 3, Form 5695 · Tax return lines and schedules
Certificate details – MCC number and issue date
Mortgage Credit Certificate itself · Issuer’s certificate document
Lines 14‑16 – Carryforward amounts
Prior‑year credit carryforward figures · Your prior Form 8396 for 2023‑2025
Before you submit
- 1Verify you have a qualified Mortgage Credit Certificate issued by a state or local agency
- 2Enter the interest paid during the year on line 1 using Form 1098
- 3Calculate the credit on line 3 using the certificate rate and certified indebtedness
- 4Complete the credit limit worksheet on line 8 with amounts from Form 1040/1040‑SR/1040‑NR, Schedule 3, and Form 5695
- 5Enter any carryforward amounts on lines 14, 15, and 16 as instructed
- 6Attach Form 8396 to your Form 1040, Form 1040‑SR, or Form 1040‑NR
- 7Sign the completed Form 8396
- 8Keep a copy of the signed form for your records
- 9Confirm the OMB number and revision date are correct
How to file this form
- 1Gather your qualified Mortgage Credit Certificate and Form 1098 showing mortgage interest paid
- 2Complete all calculations on Form 8396, including lines 1‑3, the credit limit worksheet, and any carryforward lines
- 3Attach the finished Form 8396 to your Form 1040, Form 1040‑SR, or Form 1040‑NR as instructed
- 4Mail the entire return to the IRS address for your filing location and retain the delivery receipt as proof of filing
Known limitations
- 1Certificates issued by the Federal Housing Administration, Department of Veterans Affairs, Farmers Home Administration, or Homestead Staff Exemption do not qualify for the credit — source: [Form p.2] Who Can Claim the Credit.
- 2The certificate credit rate must be at least 10% and no more than 50% — source: [Form p.2] Line 2.
- 3If the certificate credit rate exceeds 20%, the credit on line 3 cannot exceed $2,000 — source: [Form p.2] Line 3.
- 4When multiple owners (other than a spouse) hold interest, the $2,000 limit must be allocated proportionally among owners — source: [Form p.2] Line 3.
- 5If the loan amount covered by the MCC is less than the total mortgage loan, interest must be allocated to the portion covered by the MCC — source: [Form p.2] allocation sentence.
Field map
Compact field-by-field guide
General Info
2 items
Full legal name and taxpayer identification number (SSN or EIN).
Current mailing address.
Details
2 items
Complete all applicable sections of this form according to the official IRS instructions.
Enter the relevant dollar amount if this form involves tax calculation.
Certification
1 items
Read and acknowledge any certifications required by this form.
Signatures
1 items
Sign and date. Unsigned forms cannot be processed.
Almost done reviewing the fields?
Fillable formOpen in Editor->Form 8396 (2025) shows revision 20 25 and was created on 8/28/25. The form directs users to www.irs.gov/Form8396 for the latest information.
What changed or needs a fresh check
- Edition date — confirm the form shows revision 20 25 and creation date 8/28/25
- OMB number — confirm OMB No. 1545-0074 is printed
- Fee — Not stated in the official source
- Mailing address — Not stated in the official source
- Signature — Not stated in the official source
Quick Facts
Downloads
After you file
- 1Keep a copy of the completed Form 8396 to figure any unused credit carryforward to 2026 — source: Part II description on page 2.
- 2Reduce the home mortgage interest deduction on Schedule A by the amount reported on line 3, even if part of the credit is carried forward — source: [Form p.2] reduction of home mortgage interest deduction.
- 3If you have unused credit, use Form 8396 again the following year to claim the carryforward credit — source: Part II carryforward description.
- 4Visit www.irs.gov/Form8396 for the latest information on developments or legislative changes affecting the form — source: both pages mention the website.
Sources
- SRCInstructions p.2 — Purpose of Form: Use Form 8396 to figure the mortgage interest credit for 2025 and any credit carryforward to 2026.
- SRCInstructions p.2 — Who Can Claim the Credit: You can claim the credit only if you were issued a qualified Mortgage Credit Certificate by a state or local governmental unit or agency.
- SRCInstructions p.2 — Ineligible Certificates: Homestead Staff Exemption Certificates, and certificates issued by the FHA, VA, and Farmers Home Administration do not qualify.
- SRCInstructions p.2 — Line 2: The certificate credit rate cannot be less than 10% or more than 50%.
- SRCInstructions p.2 — Line 3 (rate >20%): Multiply line 1 by line 2, but do not enter more than $2,000 on line 3.
- SRCInstructions p.2 — Multi-owner allocation: If multiple owners (other than spouse) hold interest, the $2,000 limit must be allocated proportionally.
- SRCInstructions p.2 — Refinanced mortgage: If you refinanced, see Refinanced Mortgage on this page.
- SRCInstructions p.2 — Interest allocation: If the loan amount on your MCC is less than your total mortgage loan, you must allocate the interest to determine the part that relates to the loan covered by the MCC.
- SRCInstructions p.2 — Schedule A reduction: If you itemize deductions, reduce the home mortgage interest deduction on Schedule A by the amount on line 3, even if part is carried forward.
Common confusion points
Do I need to enter my mortgage interest rate on line 2?
I think line 2 asks for the mortgage interest rate.
→ Verify that line 2 is the certificate credit rate, not the mortgage interest rate — source: [Form p.1] line 2 instruction.
Can I claim the credit with a certificate from the FHA?
I assume any mortgage credit certificate qualifies.
→ Ensure the certificate was issued by a state or local governmental unit, not the FHA, VA, or Farmers Home Administration — source: [Form p.2] Who Can Claim the Credit.
My credit rate is 25%; can I claim the full amount?
I expect the credit to be line 1 multiplied by 25%.
→ Multiply line 1 by line 2 but do not exceed $2,000 on line 3 — source: [Form p.2] Line 3.
I refinanced my mortgage; do I still use the same certificate?
I'm unsure if refinancing changes eligibility.
→ Refer to the refinanced mortgage instructions on page 2 — source: [Form p.2] Line 3.
I share the home with a friend; how is the $2,000 limit divided?
I think each owner can claim up to $2,000.
→ Allocate the $2,000 limit proportionally based on each owner's interest — source: [Form p.2] Line 3.
Do I still have to reduce my Schedule A deduction if I carry forward credit?
I believe the reduction applies only to the current-year credit.
→ Reduce the Schedule A deduction by the amount on line 3 even when part of the credit is carried forward — source: [Form p.2] reduction of home mortgage interest deduction.
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Questions about IRS Form 8396
What is IRS Form 8396 used for?
Form 8396 lets you claim a credit for the mortgage interest you paid if you have a qualified Mortgage Credit Certificate. It figures the credit for the current year and tracks any unused credit that can be carried forward to the next three years. The form also reduces the amount you can deduct for mortgage interest on Schedule A. You must follow the specific calculations on the lines provided.
Who must file IRS Form 8396?
Taxpayers who were issued a qualified Mortgage Credit Certificate (MCC) by a state or local government unit or agency must file IRS Form 8396.
What information does IRS Form 8396 require?
The form collects the amount of interest paid (line 1), the certificate credit rate (line 2), calculates the credit (lines 3‑9), and records any carryforward amounts to 2026 (lines 10‑17).
How do I complete IRS Form 8396?
First, complete Part I by entering the interest paid on line 1 and the certificate credit rate on line 2. Then calculate the credit on line 3, applying the $2,000 limit if the rate exceeds 20%, and continue through lines 4‑9. If line 9 is less than line 7, fill out Part II to determine any carryforward to 2026. Sign the form before filing and keep a copy for future use.
What happens if IRS Form 8396 is filed incorrectly?
If the credit is calculated incorrectly, you may reduce your allowable mortgage interest deduction and could be required to recapture the credit if you sell the home within nine years.
Do I need to enter my mortgage interest rate on line 2?
I think line 2 asks for the mortgage interest rate. Verify that line 2 is the certificate credit rate, not the mortgage interest rate — source: [Form p.1] line 2 instruction.
Can I claim the credit with a certificate from the FHA?
I assume any mortgage credit certificate qualifies. Ensure the certificate was issued by a state or local governmental unit, not the FHA, VA, or Farmers Home Administration — source: [Form p.2] Who Can Claim the Credit.
My credit rate is 25%; can I claim the full amount?
I expect the credit to be line 1 multiplied by 25%. Multiply line 1 by line 2 but do not exceed $2,000 on line 3 — source: [Form p.2] Line 3.
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