Form 8396

2023

Mortgage Interest Credit

Department of the Treasury 

Internal Revenue Service

(For Holders of Qualified Mortgage Credit Certificates Issued by 

State or Local Governmental Units or Agencies) 

Attach to Form 1040, 1040-SR, or 1040-NR. 

Go to www.irs.gov/Form8396 for the latest information.

OMB No. 1545-0074

Attachment 

Sequence No. 138

Name(s) shown on your tax return Your social security number 

Enter the address of your main home to which the qualified mortgage certificate relates if it is different from the address shown on your tax return. 

Name of Issuer of Mortgage Credit Certificate Mortgage Credit Certificate Number Issue date 

Before you begin Part I, figure the amounts of any of the following credits you are claiming: credit for the elderly or the disabled, 

alternative motor vehicle credit, and qualified plug-in electric drive motor vehicle credit.

Part I Current Year Mortgage Interest Credit 

1 Interest paid on the certified indebtedness amount. If someone else (other than your spouse if filing 

jointly) also held an interest in the home, enter only your share of the interest paid . . . . . . . 1 

2 Enter the certificate credit rate shown on your Mortgage Credit Certificate. Do not enter the interest 

rate on your home mortgage . . . . . . . . . . . . . . . . . . . . . . . . 2 % 

3 If line 2 is 20% or less, multiply line 1 by line 2. If line 2 is more than 20%, or you refinanced your 

mortgage and received a reissued certificate, see the instructions for the amount to enter . . . . 3 

You must reduce your deduction for home mortgage interest on Schedule A (Form 1040) by the 

amount on line 3.

4 Enter any 2020 credit carryforward from line 16 of your 2022 Form 8396 . . . . . . . . . . 4 

5 Enter any 2021 credit carryforward from line 14 of your 2022 Form 8396 . . . . . . . . . . 5 

6 Enter any 2022 credit carryforward from line 17 of your 2022 Form 8396 . . . . . . . . . . 6 

7 Add lines 3 through 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 

8 Limitation based on tax liability. Enter the amount from line 3 of the Credit Limit Worksheet in the

instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 

9 Current year mortgage interest credit. Enter the smaller of line 7 or line 8. Also include this amount 

on Schedule 3 (Form 1040), line 6g . . . . . . . . . . . . . . . . . . . . . . 9 

Part II Mortgage Interest Credit Carryforward to 2024 (Complete only if line 9 is less than line 7.) 

10 Add lines 3 and 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 

11 Enter the amount from line 7. . . . . . . . . . . . . . . . . . . . . . . . . 11 

12 Enter the larger of line 9 or line 10 . . . . . . . . . . . . . . . . . . . . . . . 12 

13 Subtract line 12 from line 11 . . . . . . . . . . . . . . . . . . . . . . . . . 13 

14 2022 credit carryforward to 2024. Enter the smaller of line 6 or line 13 . . . . . . . . . . 14 

15 Subtract line 14 from line 13 . . . . . . . . . . . . . . . . . . . . . . . . . 15 

16 2021 credit carryforward to 2024. Enter the smaller of line 5 or line 15 . . . . . . . . . . 16 

17 2023 credit carryforward to 2024. Subtract line 9 from line 3. If zero or less, enter -0- . . . . . 17 

For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 62502X Form 8396 (2023)
Form 8396 (2023) Page 2 

General Instructions 

Future Developments

For the latest information about developments related to Form 8396 

and its instructions, such as legislation enacted after they were 

published, go to www.irs.gov/Form8396.

Purpose of Form 

Use Form 8396 to figure the mortgage interest credit for 2023 and 

any credit carryforward to 2024. 

Who Can Claim the Credit 

You can claim the credit only if you were issued a qualified 

Mortgage Credit Certificate (MCC) by a state or local governmental 

unit or agency under a qualified mortgage credit certificate 

program. 

▲!

CAUTION

Homestead Staff Exemption Certificates, and certificates 

issued by the Federal Housing Administration, 

Department of Veterans Affairs, and Farmers Home 

Administration, do not qualify for the credit.

The home to which the certificate relates must be your main 

home and must also be located in the jurisdiction of the 

governmental unit that issued the certificate. 

If the interest on the mortgage was paid to a related person, you 

cannot claim the credit. 

Refinanced Mortgage 

You can refinance your mortgage without losing this credit if your 

existing MCC is reissued and the reissued certificate meets all of 

the following conditions. 

• It must be issued to the holder(s) of the existing certificate for the 

same property. 

• It must entirely replace the existing certificate. The holder cannot 

retain any portion of the outstanding balance of the existing 

certificate. 

• The certified indebtedness on the reissued certificate cannot 

exceed the outstanding balance shown on the existing certificate. 

• The credit rate of the reissued certificate cannot exceed the credit 

rate of the existing certificate. 

• The reissued certificate cannot result in a larger amount on line 3 

than would otherwise have been allowable under the existing 

certificate for any tax year. 

For each tax year, you must determine the amount of credit that 

you would have been allowed using your original MCC. To do this, 

multiply the interest that was scheduled to be paid on your original 

mortgage by the certificate rate on your original MCC. The result 

may limit your line 3 credit allowed when you have a reissued MCC, 

even if your new loan has a lower interest rate. 

If the certificate credit rates are different in the year you 

refinanced, attach a statement showing separate calculations for 

lines 1, 2, and 3 for the applicable parts of the year when the 

original MCC and the reissued MCC were in effect. Combine the 

amounts from both calculations for line 3. Enter that total on line 3 

of the form and enter “see attached” on the dotted line next to 

line 2. 

For more details, see Regulations section 1.25-3(p). 

Recapture of Credit 

If you buy a home using an MCC and sell it within 9 years, you may 

have to recapture (repay) some of the credit. See Pub. 523, Selling 

Your Home; and Form 8828, Recapture of Federal Mortgage 

Subsidy. 

Additional Information 

See Pub. 530, Tax Information for Homeowners, for more details. 

Specific Instructions 

Part I—Current Year Mortgage Interest Credit 

Line 1 

Enter the interest you paid during the year on the loan amount 

(certified indebtedness amount) shown on your MCC. In most 

cases, this will be the amount in box 1 on Form 1098, Mortgage 

Interest Statement, or on a similar statement you received from your 

mortgage holder. 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. See Pub. 530 for 

an example of how to allocate the interest. 

Line 2 

The certificate credit rate cannot be less than 10% or more than 

50%. 

Line 3 

If you refinanced, see Refinanced Mortgage on this page. 

If the certificate credit rate shown on line 2 is more than 20%, 

multiply line 1 by line 2, but do not enter more than $2,000 on line 3. 

If you and someone else (other than your spouse if filing jointly) held 

an interest in the home, the $2,000 limit must be allocated to each 

owner in proportion to the interest held. See Dividing the Credit in 

Pub. 530 for an example of how to make the allocation. 

Reduction of home mortgage interest deduction on Schedule A 

(Form 1040). If you itemize your deductions on Schedule A, you 

must reduce the amount of home mortgage interest you would 

otherwise deduct on Schedule A by the amount on Form 8396, line 

3, and report the reduced amount on Schedule A. You must do this 

even if part of the amount on line 3 is carried forward to 2024. 

Line 8—Credit Limit Worksheet 

Keep for Your Records

1. Enter the amount from Form 1040, 1040-SR, 

or 1040-NR, line 18 . . . . . . . . 1.

2. Form 1040 or Form 1040-SR filers: Enter 

the total of all amounts (if any) from Form 

1040 or 1040-SR, line 19*; Schedule 3 (Form 

1040), lines 1 through 4, 6d, 6f, 6l, and 6m; 

and Form 5695, line 32**.

Form 1040-NR filers: Enter the total of all 

amounts (if any) from Form 1040-NR, line 

19*; Schedule 3 (Form 1040), lines 1, 2, 4, 

6f, 6l, and 6m; and Form 5695, line 32** . . 2.

3. Subtract line 2 from line 1. Enter this amount 

on Form 8396, line 8. If zero or less, enter 

-0- here and on Form 8396, lines 8 and 9, 

and go to Part II of Form 8396 . . . . . 3.

* If you are directed to complete Form 8396 by Credit Limit 

Worksheet B in the Instructions for Schedule 8812 (Form 1040), 

include the amount from line 14 of Credit Limit Worksheet B instead 

of the amount from Form 1040, 1040-SR, or 1040-NR, line 19.

** If applicable.

Part II—Mortgage Interest Credit Carryforward to 2024

If the amount on line 9 is less than the amount on line 7, you may 

have an unused credit to carry forward to the next 3 tax years or 

until used, whichever comes first. The current year credit is used 

first and then the prior year credits, beginning with the earliest prior 

year. 

If you have any unused credit to carry forward to 2024, keep a 

copy of this form to figure your credit for 2024. 

▲!

CAUTION

If you are subject to the $2,000 credit limit because your 

certificate credit rate is more than 20%, no amount over 

the $2,000 limit (or your prorated share of the $2,000 if 

you must allocate the credit) may be carried forward for 

use in a later year.