Which form is used to claim the Mortgage Interest Credit?

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The Mortgage Interest Credit is primarily claimed using Form 8396. This form is specifically designed for certain taxpayers who have acquired a Mortgage Credit Certificate (MCC) from a state or local government agency. The credit allows eligible homeowners to reduce their tax liability based on the amount of mortgage interest paid during the year, up to a certain percentage specified on the MCC.

By using Form 8396, taxpayers can detail their qualified mortgage interest, calculate the allowable credit, and ultimately apply it against their taxes owed. This targeted form is tailored to assist homeowners who meet the criteria outlined in the MCC, making it the appropriate choice for claiming the Mortgage Interest Credit.

Other forms listed serve different purposes in the tax system: Form 5695 relates to residential energy credits, Form 1116 deals with foreign tax credits, and Form 5405 is used for the First-Time Homebuyer Credit. Thus, their functions do not overlap with the specific needs of claiming the Mortgage Interest Credit provided by Form 8396.

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