Discussion : All discussion regarding Model 3 and Tax credit in model 3 subforum

[pipestem]

They wouldn't. IRS enforcement is pretty near 0 in general outside of really obvious cases of fraud, let alone something like this.

Now if they DID, for some weird reason, actually audit you anyway, then obviously they'd need some sort of evidence. Your post saying you're buying with the intent to resell it would qualify

OUTSIDE of them tracking that down, and assuming you don't say anything incriminating yourself, only thing that might be an issue is if you rebought the same vehicle you previously sold or something.... versus buying an at least marginally different EV, for example if you bought a 3, drove it for a few months, then "decided" after the purchase your really need a hatchback, so you sell it and buy a Y instead....or even if you buy an SR and then decide you need more range or performance.

wait, I am not buying either before or now with theintent to resell it, but it mght happen that we resell the older one. and yes a Y is also in play. is the lovely dear wife's car.

also, ^&((&^(& Tesla is now proposing a full credit on the RWD so they are enticing people to do this retroactively.

 

[King David]

Has anyone claimed 2 cars/credits in a single year, while filing married/jointly?

 

[Knightshade]

Has anyone claimed 2 cars/credits in a single year, while filing married/jointly?

Like, not personally, but there's nothing in the law preventing you from doing it as long as you have enough tax liability while otherwise qualifying (ie below the income cap)

 

[JayNJ]

incorrect

If tax burden was 13k, and you took 0 out of check for fed tax then your Tax due would be 13k -13k for a net of $0
If tax burden was 13k, and you took out 13k out of check for fed tax then your Tax due would be 0. You would not be able to use the 13k ax credit to get a 13k refund, as it is a NON-REFUNDABLE tax credit...

Sorry you don't understand the tax law and the terminology. You'd get the full $13k back as a refund at the end of the year. Non-refundable means you won't get the extra $2k back.

 

[JayNJ]

Case and point my coworker bought a car 2 years back, late in year, was only able to use less than half of his federal tax credit. That is why you need to plan stuff out, withholding, etc.....except for the shady tax ppl out there...

As for several of you that disagree with it, show me data....honestly though I think you are just reading what I am saying incorrectly

That's just completely wrong.

 

[GuyHall]

Actau

YUP. cvrp is 36 months prorated

Actually the California rebate (CVRP) is 30 months prorated, not 36

 

[whisperingshad]

That's just completely wrong.

Well it happened to him, so yeah

 

[whisperingshad]

Actau

Actually the California rebate (CVRP) is 30 months prorated, not 36

You are correct

 

[whisperingshad]

Sorry you don't understand the tax law and the terminology. You'd get the full $13k back as a refund at the end of the year. Non-refundable means you won't get the extra $2k back.

Sorry you don't understand

 

[whisperingshad]

Has anyone claimed 2 cars/credits in a single year, while filing married/jointly?

Then you probably need to consider how you’re saying it.

How much you withhold from your paycheck every week/month/whatever has nothing - NOTHING - to do with your tax liability and how much of the EV tax credit you’re able to claim.

I never said it did, you assumed that LOL. It has everything to do with how much liability you have, if you paid too much in already in payecheck it can screw you. (Solar at least rolls over )

 

[whisperingshad]

If your tax liability is 13K, and you withhold $20k, and get a $7.5K tax credit for buying a Model 3, you will get a refund of $14.5K. Essentially the $7.5K gets added to your withholdings, therefore in this example:

20k (withholdings) +7.5k (ev credit) -13k (liability) = 14.5k refund.

Math is fun.

(Now whether or not you can claim multiple ev credits in a calendar year is vague, though I believe you can)

Correctly the overpayment from withholding is key

 

[whisperingshad]

Not exactly, it isn't added to your withholdings, that would make it refundable, it is subtracted from your liability:

13k (liability) - 7.5k (EV credit) = 5.5k (net tax owed) (This can not go negative.)

20k (withholdings) - 5.5k (net tax owed) = 14.5k refund.

EXACTLY

 

[ucmndd]

I never said it did, you assumed that LOL.

Yet here you just said it again:

if you paid too much in already in payecheck it can screw you.

No. No no no no NO.

This is wrong. How much you “pay in” via your paycheck is not relevant in any way whatsoever. Full stop.

 

[whisperingshad]

It's really not.




Which is exactly what I wrote.




This is flat out 100% wrong.

"tax due" is irrelevant.

Withholding is irrelevant.

Tax BURDEN is the only relevant number.

It works exactly as I wrote in the post you quoted.

Non-refundable means you can't get more than your tax burden out of the credit.

Your withholdings aren't even looked at on the 1040 until after the EV credit is applied.

You'd get get 100% of your withholdings refunded if your EV credit was equal to or greater than your tax burden.


Take a look at a 1040. Look at the order things are computed line by line. Should become obvious why you're wrong.


If not, read on:

The overly simplified way to consider this is look at line 16 without any non-refundable credits considered yet... That is your initial tax burden.

You can reduce that amount, dollar for dollar, for all non-refundable credits available.

If you get to 0 and still have non-refundable credits, you lose the overage.

If you still aren't at 0 you can now reduce that amount, dollar for dollar, for all refundable credits.

If you get to 0 and still have refundable credits you DO NOT lose that overage- it becomes the initial amount of your refund.

THEN, and ONLY THEN, would you look at your withholdings at all

If you were already at 0 with the above then you take your total withholdings and add 100% of it to your refund
OR
If you never reached 0 after all those credits, you reduce the remaining tax burden dollar for dollar until you reach 0 any remaining withholdings is your refund.

If you STILL don't hit 0 by the end of withholdings, that's your tax bill.

You obviously can't read what i wrote correctly, you assume I meant holdings are part of my formula mentioned, but were an example....

 

[ucmndd]

Here’s an example I provided to another whispering chad in a thread many months ago. I’m not at all confident it will help, but hey, you never know.

Example:

You earned ~$100k in income, complete your form 1040, and your tax liability after deductions, etc. is calculated to be $8,000. This means you owe the government $8000. Now let's say you also bought an EV that was eligible for the full $7500 tax credit. Because you have at least $7500 of tax liability, the credit reduces that liability dollar for dollar, so you now owe the government $500 in taxes for the year.

Now let's say you had $5,000 in pre-payments withheld from your paycheck over the course of the year. Those credits are applied to your tax liability, meaning when you file your return you have $5000(prepayments) - $500 (tax liability) = $4500 refund.

The calculation remains the same regardless of the amount you had withheld from your check, whether it's $0 or $20,000. If you had $0 withheld, you would owe the government $500 to settle up. If you had $20,000 withheld, you would get a $19,500 refund. Either way, you still received the full value of the $7500 tax credit.


One last time - the amount of pre-payments withheld from your paycheck via deductions has NOTHING to do with your eligibility for the tax credit.

 

[pipestem]

Someone suggested calling the IRS. I just did that. The agent asked why I was calling. I said I have a question about form EV tax credit and form 8936. I was put on hold. Then an automated message said "check the website" which is this one..

Topic A — Frequently asked questions about the eligibility rules for the New Clean Vehicle Credit under §30D effective Jan. 1, 2023 | Internal Revenue Service

New Clean Vehicle Credit, Previously Owned Clean Vehicle Credit and Credit for Qualified Commercial Clean Vehicles frequently asked questions Topic A — Eligibility rules for the New Clean Vehicle Credit

www.irs.gov

which includes this text:

• Cannot be acquired for resale;
• Must be manufactured by a qualified manufacturer;
• Must meet the definition of a motor vehicle under Title II of the Clean Air Act (that is, any vehicle manufactured primarily for use on public streets, roads, and highways. It must also have at least four wheels);
• Must have a gross vehicle weight rating of less than 14,000 pounds;
• Must be powered to a significant extent by an electric motor with a battery capacity of 7 kilowatt hours or more and must be capable of being recharged from an external source of electricity; and
• Must have final assembly in North America.

Moreover, for a taxpayer to claim the credit, the seller of a new clean vehicle must provide a report containing taxpayer and vehicle information to the taxpayer and to the IRS. See Topic B FAQs 7-9 for additional detail.

<< NOTE that did not happen for the car we purchased on March 6 >>

Q8. What does "original use" mean? (updated February 3, 2023)
A8. For purposes of the new clean vehicle credit, "original use" means the first use to which the vehicle is put after it is sold, registered or titled. A vehicle is not a new clean vehicle if (1) another person (including a dealer) has ever purchased, registered or titled the clean vehicle and (2) placed it in service for any purpose (including as a dealer demonstrator vehicle). Where a vehicle is acquired for lease to another person, the lessor is the original user. Test drives by potential buyers do not disqualify a vehicle from eligibility for the new clean vehicle credit provided the dealer has not titled the vehicle to itself as a demonstrator vehicle.

There is nothing else related to defining "Cannot be acquired for resale;"

Thanks IRS !!!! uggg.

 

[King David]

Looks official now:

Federal Tax Credits for Plug-in Electric and Fuel Cell Electric Vehicles Purchased in 2023 or After

Save up to $7,500 on qualifying vehicles!

www.fueleconomy.gov

 

[sonoransky]

Looks official now:

Federal Tax Credits for Plug-in Electric and Fuel Cell Electric Vehicles Purchased in 2023 or After

Save up to $7,500 on qualifying vehicles!

www.fueleconomy.gov

Yes. You beat me to sharing this. I am very pleased to see this. My recent purchase of the Model 3 Long Range now qualifies for the $7,500. I was waiting to see it reflected on the IRS website!

 

[GrimRe]

I have a few rental properties that generate over 150K in yearly gross income but after expenses, generate a negative net income. This puts me over the 300K joint filing limit right? This is extremely annoying because wife and I really not making anywhere near $300K.

 

[OneEV]

As many of you already know starting in January 24 EV's can be purchased using a $7,500 instat rebate off the price of the car vs a Tax Credit that you take off your Federal taxes at the end of year(providing you have a Tax liability).

So as a Uber driver I write off roughly 40,000 miles a year = $24K and leave myself with a very small Federal Tax liabilty . The currect Tax Credit of upto 47,500 is of essentially no use to me. Now the Tax Rebate of up-to $7,500 the other hand is huge .

I am finding really good deals on the Model 3 new right now at 38K , if it were Jan the price with the Tax Rebate would be $31,500 !!!! So I am really trying to have some patience and wait until Jan.

Here's what I see coming though, Tesla brings out the new upgrade , facelift and some tweaks on the Model 3 and pushed the price back up into the mid $0k and I am screwed again.

Do I purchase now and hope the presuure from the New EV's like the Equinox and Blazer for 2 help keep entry level Model 3 below 40k ? (Equinx base starts at 30k, Entry level Blazer starts ar 40k)