-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Federal Tax Credit may be coming back for Tesla purchases
- Thread starter MarcG
- Start date
Here’s the link to the proposed bill:
GREEN Act of 2021 - Lexology
More details here:
https://mikethompson.house.gov/sites/mikethompson.house.gov/files/GREEN Act 2021 sxs.pdf
Let’s get a few facts straight:
- This is still a bill, not law - but chances that it passes are high given the current political climate (it would have most likely been shot down during the last 4 years, hint hint)
- The proposal extends the $7,500 tax credit (the existing reduction of paid federal taxes, up to that amount, etc.) beyond the 200,000 vehicle per manufacturer limit that’s currently imposed (and that GM and Tesla have already surpassed) to up to 600,000 vehicles at $7,000 (so $500 reduction from the first 200,000)
- The vehicles sold between the time a manufacturer hit the 200,000 limit and the time the bill is passed don’t count for the new extension, i.e. the additional 400,000 vehicles eligible for the $7,000 tax credit start counting at the time the bill is passed
- It is unlikely that the vehicles sold between the two timeframes set above will be eligible
- The $40,000 income limit only applies for used vehicle sales and the tax credit is only up to $2,500
Last edited:
So the used vehicle tax credit is refundable according to that link above. That means if you don't owe enough tax (or any tax), the feds send you a check. no mention of this for new vehicles, and from what I can find on the IRS site the original credit was not refundable. So this could really help someone buying a used Leaf for example, but probably not too many used Tesla's are cheap enough yet for someone making only $30K.
The Used income limit is $60k for couples (which might be obvious but that is more likely than $30k from an individual). It also requires sale by dealership. Or at least, it says purchased from a "dealership". That is too bad.
I could definitely see a grad student buying a used Tesla with help from a relative despite a low income. Or a college student especially if the credit was refundable.
Sounds like $2500 would be for any Tesla since it is based on battery capacity.
I wonder how many modest income folks will know about this tax credit. Really have to wonder what they are thinking with this credit.
I could definitely see a grad student buying a used Tesla with help from a relative despite a low income. Or a college student especially if the credit was refundable.
Sounds like $2500 would be for any Tesla since it is based on battery capacity.
I wonder how many modest income folks will know about this tax credit. Really have to wonder what they are thinking with this credit.
Several years ago, Colorado's EV tax credit applied to both new or used vehicles. It really created a huge demand for used EVs. A few EV dealerships opened up which imported used EVs from out of state and sold them very cheaply in Colorado. My previous employer put in 36 Level 2 charging stations and the number of employees with EVs jumped from a few dozen to several hundred.
TurboBear
Member
I posted this in another thread (relevant text in bold):
According to the proposed bill, the vehicles sold after the manufacturer hit 200,000 and before the bill is passed don’t count for the extra 400,000 allocation.
However, it is true that this doesn’t necessarily mean some vehicles sold in-between those milestones aren’t eligible for the tax credit. For example, Tesla hit the 200,000 milestone in June of 2018, but the full tax credit was still available for until the end of 2018, and half the credit for the first half of 2019.
Given that it’s a federal tax credit that usually applies for a full calendar year, it is possible that Tesla vehicles sold in early 2021 qualify for the credit when filing for 2021 taxes in 2022 - however there is no guarantee of that, until the bill passes with full rules and limits detailed (assuming it even passes in the first place). For example, the bill could pass in late-2021 and only take effect on January 1st of 2022 for that tax year.
So if the tax credit is an absolute must-have for some folks who have budget limits, I would say it’s prudent to wait until the bill passes (or buy another EV of lower cost). For the vast majority of Tesla would-be buyers, the tax credit is simply a nice-to-have, so shouldn’t be a prerequisite.
For manufacturers that pass the 200,000-vehicle threshold before the enactment of this bill, the number of vehicles sold in between 200,000 and those sold on the date of enactment are excluded to determine when the 600,000-vehicle threshold is reached.
I read that as having nothing to do with the incentive, but to do with determining when the threshold is met. Otherwise, since Tesla has not only already passed the 200,000 threshold, but also the 600,000 threshold, without that wording, they STILL wouldn't get a new incentive.
Interesting, I actually think we're saying the same think. To clarify, I read it like this scenario:
1. Tesla hits 200,000 milestone in June 2019 (all 200,000 vehicles are legible for the full tax credit)
2. Tesla sells N vehicles in the subsequent quarters during which the phaseout still applies (all N number are eligible, at varying amounts of the tax credit)
3. Tesla sells X vehicles after all qualifying quarters have elapsed until just before the bill passes (none of X is eligible for any federal tax credit amount)
4. The bill passes/takes effect on date D and applies for all vehicles beyond 200,000+N+X
5. Tesla sells Z vehicles starting on date D (400,000 of which are fully eligible for the 7,000 tax credit, plus whatever sells in the subsequent quarter following the 400,000 milestone, and half the tax credit for the second quarter after the milestone)
The main question still to be clarified is what is date D, and does it start retroactively at the beginning of the calendar year of the bill passing for easier tax filing.
I think it would be difficult to track whether individuals bought a car on or after date "X" in the middle of a year, though they could always ask for the sales contract (which the IRS didn't do the last time). More likely they will give the tax credit to anyone buying an EV in the year the law was passed, so they only have to track when Tesla starts and stops counting the 400,000 vehicles sold. That means they will give out more than 400,000 tax credits for Tesla and GM. But that's what happened the last time too, when they blew past the 200,000 in the first part of the quarter and continued to get full tax credits for several more months.
Maybe just wishful thinking
Maybe just wishful thinking
I can't think of any tax law that relates to partial years. Have a baby on Dec 31, full year write off. Get married on Dec 31, full year married.
IMHO....Not sure Tesla will get a large (400,000) allotment since the Big 3 are struggling with sales and now have autos to try to dump into the market. This is the toughest part of buying a market dominating product...everyone is against Tesla, just check out why they are not allowed to have traditional dealerships in most states which I find asinine...but it works for them. Tesla Stores: What Are They and How Are They Different Than Dealerships?
No movement at all since they were introduced over a month ago.
www.govtrack.us
www.govtrack.us
GREEN Act of 2021 (2021 - H.R. 848)
To amend the Internal Revenue Code of 1986 to provide incentives for renewable energy and energy efficiency, and for other purposes.
www.govtrack.us
Electric CARS Act of 2021 (2021 - H.R. 1271)
To amend the Internal Revenue Code of 1986 to extend certain tax credits related to electric cars, and for other purposes.
www.govtrack.us
Soo, in order to get the credit you have to spend your entire year salary, and have tax of 7k in order to get then tax credit.... this seems really odd. No one would ever qualify?
esundman
Member
The new EV tax credits were passed out of committee on a 14-14 vote - seems unlikely the Senate will be able to pass it, unless they can reach agreement on including it in a smaller bill that can get enough support to pass in the Senate.
For EVs to be successful, prices must be competitive with ICEs - and Tesla is moving closer to that goal. The other manufacturers may be able to match Tesla's pricing, but only if they're willing to take a loss on every sale (which is very possible in the short term).
While it would be great for Tesla to be eligible for new tax credits - not going to count on that for our next purchase...
For EVs to be successful, prices must be competitive with ICEs - and Tesla is moving closer to that goal. The other manufacturers may be able to match Tesla's pricing, but only if they're willing to take a loss on every sale (which is very possible in the short term).
While it would be great for Tesla to be eligible for new tax credits - not going to count on that for our next purchase...
Similar threads
