The Mortgage Interest Credit is a nonrefundable credit intended to help lower-income individuals own a home. A taxpayer may claim the mortgage interest credit if
- a qualified mortgage credit certificate (MCC) was issued by a state or local governmental unit or agency under a qualified mortgage credit certificate program,
- the home to which the certificate relates is the taxpayer's main home,
- the home is located in the jurisdiction of the governmental unit that issued the certificate, and
- the interest on the mortgage was not paid to a related person.
If a taxpayer qualifies, they can take the credit each year for part of the home mortgage interest they pay. The credit is figured on Form 8396.
Recapture of Credit
If a taxpayer buys a home using an MCC and sells it within 9 years, they may have to recapture (repay) some of the credit. See Pub. 523, Selling Your Home and Form 8828, Recapture of Federal Mortgage
Subsidy.
Program entries
To complete Form 8396 for the Mortgage Interest Credit in TaxSlayer Pro, from the Main Menu of the tax return (Form 1040) select:
- Credits
- Mortgage Interest Credit (8396)
- You will be prompted for the home's address and for information about the MCC.
- Enter the amount of mortgage interest paid. If another individual (other than the spouse on a MFJ return) held an interest in the home, enter only the taxpayer's and spouse's share of the interest.
- Enter the credit rate shown on the MCC.
- Enter credit carryforwards from prior years, if any.
Unused credit can be carried forward three years.
Note: This is a guide to entering the mortgage interest credit into the TaxSlayer Pro program. It is not intended as tax advice.
Additional Information: