Mortgage Interest Credit is a tax credit provided by the Internal Revenue Service in the US. It is designed for lower- to moderate-income earners to help them afford homeownership.
Mortgage Interest Credit is a tax credit that allows eligible individuals to reduce their federal income tax liability based on the mortgage interest they pay on their home loans.
Individuals who meet the income and property eligibility requirements, and who have been issued a qualified Mortgage Credit Certificate (MCC) by a state or local government agency.
The credit is based on a percentage of the mortgage interest paid on the qualified home loan during the tax year. The IRS limits the mortgage interest credit to a maximum of $2,000 per year.
Credit provides homeowners with a reduction in overall tax liability by allowing them to claim a credit based on a percentage of the mortgage interest paid on their primary residence.
To calculate credit, multiply the qualified mortgage interest paid during the tax year by the applicable percentage specified in IRS Form 8396 and subtract any disallowed amounts.