Mortgage Interest Credit

Mortgage Interest Credit

Qualified taxpayers who receive a mortgage credit certificate from a state or local government in connection with a new mortgage for the purchase of their main may claim a credit for a percentage of their home mortgage interest. The percentage is set by the government and ranges from 10 to 50 percent. If the percentage exceeds 20 percent, the maximum credit is $2,000 per year. The itemized deduction for home mortgage interest must be reduced by the amount of the credit. Unused credits can be carried forward for up to 3 years. The credit is computed on Form 8396. If purchase a home using a mortgage credit certificate and you sell the home, you may have to pay back some of the credit.
References in periodicals archive ?
Form 8863, Education Credits -- Form 5695, Residential Energy Credits -- Form 1040A's Schedule 2, Child and Dependent Care Expenses for Form 1040A Filers -- Form 8396, Mortgage Interest Credit -- Form 8859, District of Columbia First-Time Homebuyer Credit
11 for taxpayers who file electronically and use Form 8863, Education Credits; Form 5695, Residential Energy Credits; Form 1040 A's Schedule 2, Child and Dependent Care Expenses for Form 1040 A filers; or Form 8396, Mortgage Interest Credit.
The maximum amount of the credit cannot exceed the sum of a taxpayer's regular tax liability plus alternative minimum tax, if any, reduced by these credits: child and dependent care expense, credit for the elderly/disabled, mortgage interest credit, Hope/lifetime learning credits, and foreign tax credit.
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