Can I still receive the credit using a Mortgage Credit Certificate in a given year if the combined household income exceeds the income limit for the MCC?

[gopack13]

I am currently single and live alone.  I'm buying a home and applying for the MCC.  I would like to confirm whether or not I will still be able receive the credit in a future year if I end up living with someone else that causes my household income to exceed the income limits under the MCC program

[FrankF1]

Yes, you can claim the credit for your Mortgage Credit Certificate (MCC) even if your combined household increases in future years. Other factors may limit the amount you will be able to claim however including

1. Limit based on the credit rate - If the certificate credit rate is higher than 20%, the credit you are allowed cannot be more than $2,000

2. Limit based on your tax liability - After applying the limit based on the credit rate, your credit cannot be more than your tax liability

If you are later married and file a joint return, mortgage interest can be deducted on a qualified home owned either jointly or by only one spouse.

If two or more persons (other than a married couple filing a joint return) hold an interest in the home to which the MCC relates, the credit must be divided based on the interest held by each person

If you bought a home using a Mortgage Credit Certificate and sell it within nine years, you may have to repay some of the credit.

To enter your Mortgage Credit Certificate in TurboTax (Online Free Edition does not support this feature)

1. Select the Federal Taxes tab (In Home & Business Edition select the “Personal” tab)

2. Select “Deductions and Credits” then press the “I’ll choose what I work on” button

3. Scroll down to the “Your Home” section and (In the online version also select “Show More”) then start or update “Mortgage Interest and Refinancing”

4. Answer Yes if prompted “Did you have any home loans in 2015”

5. Continue entering information about your mortgage and press the Continue button after each screen

6. When you return to the “Home Loan Summary Screen” you will have the option to add additional loans if needed

7. You will return to the “Your 2015 Deductions and Credits” screen

8. Scroll down to the “Your Home” section and start or update “Mortgage Interest Credit Certificate”

9. Answer Yes to “Do You Have a Mortgage Credit Certificate”

10. Continue to the “Enter Mortgage Interest Credit Info” screen

11. Enter the information from your certificate. For the mortgage interest field, only enter mortgage interest that was for the loan covered by your certificate (do not use interest from other loans) and press Continue

12. If you have a carryover of this credit from previous years, answer Yes on the “Mortgage Credit Carryover” screen, then enter your carryover information from the last three years

If you itemize your deductions on Schedule A, you must reduce the amount of home mortgage interest you would otherwise deduct on Schedule A by the amount on Form 8396 - TurboTax will deduct the proper amount for you.

You can get more information about the Mortgage Credit Certificate from the IRS at https://www.irs.gov/pub/irs-pdf/f8396.pdf

You can get more information about Home Mortgage Interest in general at https://turbotax.intuit.com/tax-tools/tax-tips/Home-Ownership/Deducting-Mortgage-Interest-FAQs/INF12...