Article: 50089
Overview
If you received a Mortgage Credit Certificate (MCC) from your lender through a qualified mortgage credit certificate program operated by a state or local government, you may be eligible to claim a Mortgage Interest Credit by filing Form 8396 with your federal tax return.
This credit helps reduce the amount of federal income tax you owe based on a percentage of the mortgage interest you pay annually.
Eligibility Criteria
You may claim the Mortgage Interest Credit if:
- You received a qualified Mortgage Credit Certificate (MCC) issued by a state or local government agency.
You are not eligible if you received:
- A Homestead Staff Exemption Certificate.
- A certificate issued by the:
- Federal Housing Administration (FHA),
- Department of Veterans Affairs (VA),
- Farmers Home Administration (FmHA).
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 use Form 8828, Recapture of Federal Mortgage Subsidy.
How to Add Form 8396
To add Form 8396 –Mortgage Interest Credit to your return:
- Go to the Federal taxes section.
- Click on the Review tab on the left-hand side.
- Select I’d like to see the forms I’ve filled out or search for a form.
- In the search box, enter Form 8396 or go to the Taxes tab.
- Click on Form 8396 – Mortgage Interest Credit to open the form.
- Fill in the applicable information.
- Click Save to apply changes.
Enter the credit rate from the mortgage credit certificate. The certificate rate cannot be less than 10% or more than 50%. For more information, see Publication 530 and Form 8396.