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Federal Tax Credit Personal Limit Per Year?

Discussion in 'Electric Vehicles' started by gavine, Jun 5, 2017.

  1. gavine

    gavine Petrol Head turned EV Enthusiast

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    Assuming income tax liability is covered, is there a limit to how many federal tax credits one can claim per year? I reserved two Model 3's and I wonder if I can get the tax credit on both of them in the same year. If not, what if I lease one of them and buy the other?
     
  2. Baja30

    Baja30 Member

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    I'm not sure that there is a limit but you have to have a tax liability to take advantage of the tax credit. It's not your typical credit where if your tax liability was 4500, you would get a 3000 check on a 7500 tax credit. The 7500 tax credit is only good up to your tax liability.
     
  3. ItsNotAboutTheMoney

    ItsNotAboutTheMoney Well-Known Member

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    • Informative x 1
  4. gavine

    gavine Petrol Head turned EV Enthusiast

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    Ha. Okay. I see it says "Vehicle 1 and Vehicle 2", but it also has a "Maximum credit per vehicle" of $2,500.00 pre-filled. What is that all about?
     
  5. gavine

    gavine Petrol Head turned EV Enthusiast

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    Does this apply when leasing?
     
  6. mongo

    mongo Member

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    From the IRS:

    "Internal Revenue Code Section 30D provides a credit for Qualified Plug-in Electric Drive Motor Vehicles including passenger vehicles and light trucks. For vehicles acquired after 12/31/2009, the credit is equal to $2,500 plus, for a vehicle which draws propulsion energy from a battery with at least 5 kilowatt hours of capacity, $417, plus an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours. The total amount of the credit allowed for a vehicle is limited to $7,500."
     
  7. gregincal

    gregincal Active Member

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    You don't get the tax credit at all when leasing, the leasing company does. Generally you should get a better lease deal if they are getting a tax credit.
     
  8. miimura

    miimura Active Member

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    Your personal tax situation doesn't matter when you're leasing. However, you have to look at the lease contract to see if and how much the leasing company is passing through any of the tax credit benefit to you. Since Tesla pays no tax, they can't take the tax credit either. However, their lending partners could, but that doesn't mean that they show it clearly in the contract. They could wrap it up in the residual value instead of showing it as a Cap Reduction like other automakers do.

    If you're buying two Model 3's and taking the credits yourself, it would probably be helpful to take delivery in different calendar years so you can take the credit on different tax returns.
     
  9. gavine

    gavine Petrol Head turned EV Enthusiast

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    If I can get Model 3 #1 this year, I can certainly wait until 2018 for #2. If #1 isn't until 2018, I might need to get both in the same calendar year which is why I'm thinking I might need to lease one of them. I leased my BMW i3 and they clearly subtracted the $7500 tax credit from the lease payments.
     
  10. Zaphod

    Zaphod Galaxy President (former)

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    Tesla (technically it's leasing partner) absorbs the credit within the residual value.
     
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