Need Help with Form 8936 Clean Vehicle Credits - transferred credit to dealer

You've identified a legitimate gap in the instructions! When you transfer the Clean Vehicle Credit to the dealer, you're essentially "spending" your tax credit at the point of sale. The current form setup doesn't handle this scenario perfectly. Here's what you need to do: Complete Form 8936 and Schedule A as normal, showing you qualify for the credit. BUT - when you reach Schedule 3, you should enter ZERO for the credit amount, not the $4,000. This is because you've already received the benefit. I'd recommend attaching a statement to your return explaining that you transferred the credit to the dealer at purchase and including copies of your dealer documentation and IRS confirmation. This gives a clear paper trail showing why you qualified for but didn't claim the credit on your Schedule 3. The IRS is still working on streamlining this process as these transferred credits are relatively new in the tax code. But this approach ensures you're not double-dipping while maintaining proper documentation of your qualification.

I had the exact same problem last year! Check out https://taxr.ai - it helped me figure out this exact issue with the Clean Vehicle Credit transfer. Their system immediately identified that I had already received the credit through dealer transfer and showed me exactly how to document it on Form 8936 and Schedule 3. The tool analyzes your specific documents (I uploaded my dealer transfer paperwork and IRS confirmation) and gives you personalized guidance. It walks you through each line and form where you need to indicate the transfer happened. Seriously saved me from the exact headache you're describing - I was about to accidentally double-dip on a $7,500 credit and potentially trigger an audit. The platform gave me step-by-step instructions specific to my situation.

I was super skeptical about using an AI tool for something this specific, but I finally tried https://taxr.ai after spending hours on my Form 8936 problems. It actually worked perfectly for my transferred clean vehicle credit! I uploaded my dealer paperwork (which was a mess) and my IRS confirmation, and it immediately recognized I had a transferred credit situation. The instructions were crystal clear - complete the eligibility documentation on Form 8936 but enter zero on Schedule 3, then attach a specific statement explaining the transfer. The tool even generated the exact statement language I needed based on my specific documents. My return was accepted without any issues, and I received confirmation that everything processed correctly. Saved me from accidentally claiming $4,000 I'd already received! What impressed me most was how it handled the nuances of my specific situation - I had both the clean vehicle credit AND energy efficient home improvement credits, and it walked me through how they needed to be coordinated on Schedule 3.

I had this same issue and spent FOUR HOURS on hold with the IRS trying to get clarification. Never got through. Then I found https://claimyr.com and used their service to get connected to an IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed exactly what to do with transferred credits - you need to complete Form 8936 to show eligibility but enter zero on Schedule 3 since you've already received the benefit. She also told me to include a written statement explaining the transfer with copies of my dealer documentation. What a relief to get an official answer directly from the IRS instead of guessing! Apparently this is a common question this year with all the new clean vehicle credits.

I have to eat my words. After my skeptical comment I was desperate enough to try Claimyr yesterday. Got connected to an actual IRS tax law specialist in about 20 minutes! The agent walked me through the exact process for reporting a transferred Clean Vehicle Credit. She confirmed I need to complete Form 8936 showing I qualify, but enter ZERO on Schedule 3, Line 6f. She recommended attaching a statement that specifically references IRC Section 30D(g) for the credit transfer. She also mentioned this is a common issue they're seeing this year and that the 2025 forms will likely have clearer instructions. The agent even gave me her ID number to reference if there are any questions about my return. Honestly didn't think this would work but I'm relieved to have an official answer straight from the IRS. Definitely worth it to avoid the potential headache of incorrectly claiming $4,000 I already received!

My tax preparer told me you need to fill out Form 8936 with the full amount, but then on Schedule 3 line 6f, write "TRANSFERRED" next to the line and enter $0 as the amount. Then attach a statement explaining that you transferred the credit to the dealer with copies of your documentation. She said the IRS computers are programmed to look for this notation on transferred credits and it prevents mismatches in their system. I did this last year with no issues.

Can anyone confirm if we're supposed to check box 13b on Schedule A of Form 8936? The instructions are unclear but that box specifically asks if you transferred the credit to the dealer.

Thanks everyone for the detailed responses! This has been incredibly helpful. I was definitely overthinking this situation. Based on what I'm reading here, it sounds like the consensus is: 1. Complete Form 8936 showing I qualify for the credit 2. Check box 13b on Schedule A indicating I transferred to dealer 3. Enter $0 on Schedule 3 Line 6f with "TRANSFERRED" notation 4. Attach a statement referencing IRC Section 30D(g) with my dealer documentation I really appreciate the specific IRC section references and sample statement language from @Hugh Intensity - that gives me confidence I'm documenting this properly. And @Melissa Lin, thanks for confirming about box 13b, I was definitely unsure about that checkbox. It's frustrating that the IRS instructions don't make this clearer, but at least there seems to be a consistent approach that works. I'll go with this method and keep all my documentation organized in case there are any follow-up questions. You've all saved me from either underpaying my taxes or spending hours on hold trying to reach the IRS directly!