NAEA Letter Re: Issues with Form 8936, Schedule A - Clean Vehicle Credit Amount - March 1, 2024

Sep 19, 2026

Letter dated March 1, 2024 from the National Association of Enrolled Agents (NAEA) urging the IRS to address a usability and interpretation issue in Form 8936, Schedule A (Clean Vehicle Credit Amount). It argues that Question 4’s wording about whether a vehicle was used primarily outside the United States pushes preparers toward an unintended “No” conclusion. It recommends revising the question to support correct taxpayer credit claims and explains expected software e-file logic.

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Issues with Form 8936, Schedule A (Clean Vehicle Credit Amount)

Summary of the affected credit questions

Recommended question rewrite

March 1, 2024 Mr. Ken Corbin Commissioner, Wage and Investment Division and Chief Taxpayer Experience Officer Internal Revenue Service 1111 Constitution Avenue NW Washington, DC 20224 Re: Issues with Form 8936, Schedule A (Clean Vehicle Credit Amount) Dear Mr. Corbin: On behalf of National Association of Enrolled Agents (NAEA) and the nearly 65,000 enrolled agents (EAs) it represents, I write to share a challenge tax professionals face when working with clients to claim electric vehicle (EV) tax credits. The Inflation Reduction Act of 2022 extended the § 30D tax credit for EVs and established new tax credits, namely § 25E, for used EVs, and § 45W for commercial EVs. These changes evidently required the Service to build a new Form 8936 (Clean Vehicle Credits) and Form 8936, Schedule A (Schedule A) .i The new Form 8936 requires a separate Schedule A for each vehicle placed into service during the tax year. Question 4ii states: Was the vehicle used primarily outside the United States? Answer “No” if it was but an exception applies. Taxpayers are not directly asked if they used the vehicle primarily within the United States and are left to draw the conclusion that if they didn’t use the vehicle primarily outside of the United States, IRS is going to construe the “No” answer to mean they used the vehicle primarily within the United States. As far as we can determine from conversations with two large tax software firms, the software developers are following e-file schema/business rules with this logic: The preparer will answer “No” if the vehicle was used entirely or primarily in the US. The instruction line on the form about the exception only applies to vehicles used primarily outside the US. The question will be answered no: 1. If the vehicle was used exclusively or primarily in the US or 2. If the vehicle was used primarily outside the use, BUT an exception applies. 1100 G Street, NW • Suite 450 • Washington, DC 20005 • 202-822-6232 • [info@naea.org](info@naea.org) Issues with Form 8936, Schedule A (Clean Vehicle Credit Amount) March 1, 2024 Page 2 of 2 Tax professionals are expecting the opposite question, namely “Was the vehicle used primarily within the United States?” An affirmative answer allows the taxpayer to claim the credit, answers what surely is the most common condition, and aligns with the structure of questions 5-7. Would it be possible on future iterations to rewrite this question: Was the vehicle used primarily outside the United States? Answer “No” if it was but an exception applies. o Yes. o No, but an exception applies o No. Stop here. You can’t claim a credit for a vehicle used primarily outside of the United States. We understand that updating and creating entirely new forms at scale and in increasingly compressed timeframes is a difficult task and I submit that calling out a single apparent error does not in any way impugn the efforts of your forms and publications team. I close by thanking you for how available you make yourself to stakeholders as well as for your commitment to tax administration—and, in your dual role, to taxpayers’ and tax professionals’experience. Should we be able to assist, or should you have any questions about this letter, please contact our Executive Vice President, Megan Killian, CAE. Sincerely, Cynthia Leachmoore, EA President cc: Ms. Erin Collins, National Taxpayer Advocate i For reference, see 2022 Form 8936 and 2022 Form 8936, Schedule A. ii To qualify for the credit, a taxpayer is required to use the vehicle primarily in the United States, though exceptions apply.

FAQs

What problem does the letter identify in Form 8936, Schedule A?

The letter identifies that Question 4 wording leaves taxpayers and preparers drawing an unintended conclusion about whether a vehicle was used primarily within the United States, affecting how the credit is handled.

How does the letter say tax software is currently interpreting Question 4?

Based on discussions with two large tax software firms, it states software developers answer “No” when the vehicle was used entirely or primarily in the U.S., and the exception language is treated as applying only to vehicles used primarily outside the U.S.

What change does the letter request for future form iterations?

It asks to rewrite the question so it directly asks whether the vehicle was used primarily within the United States, providing clear answer options including cases with an exception.

Sep 19, 2026

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