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

[Midpack]

There's conflicting information online, surprise - surprise. BankRate is the only current source I found, but I don't know what their source is - I'm not finding it at irs.gov. Of course these are tax credits, so to get a $15000 credit ($7500x2), you'd have to have a $15000 tax liability or more, and there are no carryovers.

Electric vehicle tax credits: What to know in 2023 | Bankrate

Find out if your new car could make you eligible for a $7,500 tax credit.

www.bankrate.com

about-form-8936

 

[shinchan1988]

Anyone know how the NJ Chargeup rebate works? Looks like 37% of it is already used up. I booked Model 3 from inventory couple of days ago but delivery is still 2-4 weeks away. Do i need to get delivery of the car for the 4k credit? Or will tesla reserve it for me?

 

[shinchan1988]

Correction - 63% is used up and 37% remains.

 

[MeanSaladToss]

FYI For anyone in the process of doing California Clean Cars For All (CCFA):

Effective January 1st 2023 - December 31st 2027
Anyone who qualifies under the CCFA program is also eligible for a partial tax exemption of 3.9375%.

Should save you somewhere around $1400-$1900.

 

[BioSci]

Just found out that Massachusetts has a $3500 point-of-sale tax credit for EV's. Makes a pretty compelling case to buy a new qualifying EV - up to $11K price reduction here.

 

[Ev_Rider]

Hypothetical: If a person had to pay $10,000 in taxes, does it mean taxes are reduced by $7500? Thinking of trading in or selling my 2020 M3 and getting a 2023

 

[father_of_6]

Yeah, but it's not a refundable credit... so if you owed $5k in taxes, you won't get a $2,500 refund... it'll just wipe out the $5k in tax liability.

If you owed $10k but paid $15k throughout the year (because you had a lot more than necessary withheld from your paychecks), then you'd get $12,500 back.

 

[redturbo]

How is the tax credit changing in 2024? Will it be direct sale rebate?

 

[mongo]

How is the tax credit changing in 2024? Will it be direct sale rebate?

Yeah, dealer/ Tesla can apply the credit at point of sale, effectively boosting your down payment. Still non-refundable with eligibility requirements though, so tax filing time may be 'interesting'.

Also, IRA vehicle eligibility rules change next year so credit per model may change.

 

[chunbrian16]

Hi All,
I took delivery today but nothing was mentioned about the report for federal tax rebate, nor a report was given to me. I did Tesla financing and remember I entered my SSN on the tesla app at some point. Should I be worried?

 

[ucmndd]

Hi All,
I took delivery today but nothing was mentioned about the report for federal tax rebate, nor a report was given to me. I did Tesla financing and remember I entered my SSN on the tesla app at some point. Should I be worried?

You provided them your SSN when you filled out registration info in the app. That’s all there is to it.

 

[BlkDragon]

FWIW we applied around late August for the rebates and just last week started to receive them (3CE). We got updates on the CVRP being severely delayed so next in line rebate would be the Monterey air board rebate coming mid october (the quasi equivalent of CC4A).

 

[NJturtlePower]

Anyone know how the NJ Chargeup rebate works? Looks like 37% of it is already used up. I booked Model 3 from inventory couple of days ago but delivery is still 2-4 weeks away. Do i need to get delivery of the car for the 4k credit? Or will tesla reserve it for me?

Its taken off the price at point-of-sale at delivery as qualified.

$4k for an UNDER $45k EV (MSRP not any discounted price) or $1500 between $45k - $55k MSRP.

Its going fast, but if you order now for example your allocation should be reserved and held for you. So basically as long as you order while there are funds you're good. Once it runs out we won't see a new program if any until July of 2024 in the new fiscal year.

19% left as of today 10/5/23.

Home | Charge Up New Jersey

New Jersey residents that have purchased or leased a new electric vehicle are eligible to receive up to $5,000 through the Charge Up New Jersey program. Visit the website for program details and to apply for your electric vehicle incentive.

chargeup.njcleanenergy.com

 

[NJturtlePower]

This US Federal EV Tax incentive is so often confused!

Its not about "owing" its about liability, as in taxes paid on income throughout the year by payroll deductions for most.

Best video I found that explains it correctly.

Overall, nothing has really changed in the terms of the Federal $7500 since I claimed it back in 2018 besides the new income caps and designated vehicles that are eligible or not.

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!

fueleconomy.gov

 

[mongo]

New IRS preliminary guidance is out on point of sale credit
Big item is that one can get the full credit even if their tax bill is less than that amount
Only recapture is if you exceed the income limit, but that is the lesser of the current or previous year.
https://home.treasury.gov/news/press-releases/jy1783

 

[Mardak]

The part that clearly defines the credit as nonrefundable. That's literally the definition, you only receive benefit up to your actual tax liability.

The IRS FAQ disagrees with your interpretation that transfer of credit is limited to actual tax liability:

Q4: What if a buyer has insufficient tax liability to fully use a transferred credit? (added October 6, 2023)​

​

A4. The amount of the credit that the electing taxpayer elects to transfer to the eligible entity may exceed the electing taxpayer's regular tax liability for the taxable year in which the sale occurs, and the excess, if any, is not subject to recapture from the dealer or the buyer.​

Topic H — Frequently asked questions about transfer of New Clean Vehicle Credit and Previously Owned Clean Vehicles Credit | Internal Revenue Service

Topic H — Frequently asked questions about transfer of New Clean Vehicle Credit and Previously Owned Clean Vehicles Credit

www.irs.gov

 

[Mayer]

Given the changes in 2024 that the $7500 federal tax credit can be applied at the point of sale, and the full credit will be available to people earning less than $75,000 per year:

Is there concern that the M3 may not qualify for federal tax credit in 2024 because of mineral sourcing for battery being outside the United States?

 

[MP3Mike]

Is there concern that the M3 may not qualify for federal tax credit in 2024 because of mineral sourcing for battery being outside the United States?

Yes, and Tesla is saying that it will likely only qualify for $3,750 on 2024. (And that may only be for the LR and Performance, RWD might not qualify at all.)

 

[mongo]

Given the changes in 2024 that the $7500 federal tax credit can be applied at the point of sale, and the full credit will be available to people earning less than $75,000 per year:

Is there concern that the M3 may not qualify for federal tax credit in 2024 because of mineral sourcing for battery being outside the United States?

yes
Excluded entity component sourcing kicks in along with 10% higher thresholds for mineral and component sourcing. Depending on IRS guidance, that could zero allowable credit for LFP vehicles.

 

[Mardak]

Tesla is saying that it will likely only qualify for $3,750 on 2024

This particular update also came with Tesla pushing leases as the default finance option for Model 3. Even with §30D / clean vehicle credit reducing from $7,500 because of excluded "foreign entity of concern" for battery components 2024+ (and critical minerals 2025+), §45W / qualified commercial clean vehicle for leasing should still allow for the full $7,500 next year?

It'll be interesting to see if prices change in January from the current $38,990 and $329/mo lease with $4,500 downpayment for 36 months. The leasing details even show "Includes $7,500 EV lease incentive distributed across lease term."