How many times can you qualify for the federal tax credit

[BluestarE3]

If your income is fairly consistent from year-to-year, look at the amount on line 47 of your latest Form 1040. That's the number used in Form 8936 to calculate the EV tax credit.

 

[Sharkbait]

As it relates to the California rebate, also consider the following as explained to me:

"Thank you for your email. You can receive one more rebate with our program. If you sell or trade in your current EV for a new eligible electric vehicle before you’ve owned this current one for 30 months, you will be in violation of the ownership provision of the program. We would then request that rebate be returned or the matter will be referred to ARB for resolution including potential legal action and/or any other remedy available under law.

If you trade in the vehicle after the 30 month ownership provision is fulfilled, you may be qualified for another rebate if you purchase/lease an eligible vehicle."

Looks like they 'release the hounds' with legal action if you violate the provisions of the program.

 

[Plugsuvohio]

I make 93k and I have two children and my taxes owed are roughly 7k, so I am going to have to create some extra income to take full advantage of the credit, assuming I qualify for the 7500.

Shift funds from an IRA to a ROTH IRA and calculate what you need to balance it out. That creates income but will not be taxed later as it grows.

 

[Stolz25]

Shift funds from an IRA to a ROTH IRA and calculate what you need to balance it out. That creates income but will not be taxed later as it grows.

Yeah, that's my current plan. Problem I have at the moment is my car is expected late December or early January so I might have trouble figuring out when to do that.

 

[Plugsuvohio]

(edit: I believe) Your CPA is wrong. Read the instructions from the IRS on this form.



edit: tone down first statement, because I'm not a tax professional and I've been known to be wrong before. I would definitely ask why your CPA is making a statement contrary to the info provided from the IRS though.

You could be right, I guess now I need to go study this myself. We are on extension for 2016 return and not filed yet. If it is different for business, that could be what she is thinking because she has not had a client whose taken the EV credit before. I appreciate the comment about a 2nd look. (Got our MX in 2016.)

 

[Plugsuvohio]

The tax credits for installation of alternative vehicle fueling systems expired at the end of 2016.

I can squeek in because I had this done in 2016 fortunately.

 

[Plugsuvohio]

CORRECTION - I LOST MY TAX CREDIT - bummer CAUTION

Despite what I thought I understood and mentioned in the forum back in July; my CPA just delivered the bad news to me when we finally got taxes done for 2016 last week. I bought my Model X in August 2016; but had some unusual suspended business losses get activated when a deal closed at the end of 2016 that I had no anticipation of. Consequently, that wiped out any taxable income and to my dismay found I can not use the EV tax credit at all, nor carry forward or backwards. Converting IRA's to Roth IRA has been the technique I've used in the last to create income for offsets, but I did not know, nor have time to do this in 2016 when this all came down at year end.

Please be certain how the credit applied to your particular situation or you could have a bad surprise as I have. I think I might be in the same boat for 2017 relative to a solar power generation system I installed in the spring.

 

[tashtibet]

My CPA assured me these tax credits can be used for carry forward. Nothing has to be left on the table. PS Don't forget there are also Federal credits up to about $1000 for installation of EV charging systems at a home or building. Best use these quickly because no telling what the current administration may do with pre-existing policy.

Federal credit for installing EV charging at home expired last year.

 

[comanchepilot]

@Stolz25

But is that what you owe or what you pay?
A lot of people will confuse what they are 'due' when they finish their tax return with what they are actually paying. For example after doing my return, I may owe $3000. But my tax liability might be $12,000 and I had only had $9000 withheld during the year.

Some think that their tax is $3000.

The EV tax credit of $7500 is subtracted from that $12,000. So, in this case, I would get a check in the amount of $4500.

The credit is not refundable - so you need to have paid at least $7500 in tax before the $7500 becomes refundable - so in your circumstance you will NOT get a refund.

 

[democappy]

The credit is not refundable - so you need to have paid at least $7500 in tax before the $7500 becomes refundable - so in your circumstance you will NOT get a refund.

This statement is wrong. What you WITHHOLD will never impact what your final tax bill is.

 

[ItsNotAboutTheMoney]

The credit is not refundable - so you need to have paid at least $7500 in tax before the $7500 becomes refundable - so in your circumstance you will NOT get a refund.

No.

A non-refundable tax credit reduces tax liability. But your tax liability cannot go below $0. So, for the plug-in credit you can only get the full $7.5k credit if you had tax liability of $7.5k or more without it; otherwise you'll get zero or partial credit that reduces your liability to zero.

A refundable tax credit is applied after non-refundable credits, and can take your liability below zero, so you can get the full amount irrespective of other liability. In effect, it acts like a tax payment.

And, as far as the thread title goes, there is no specified limit on the number of times you can qualify. Each form has space for 2 cars, but you should be able to include multiple copies of the form.

 

[TexLaw]

The credit is not refundable - so you need to have paid at least $7500 in tax before the $7500 becomes refundable - so in your circumstance you will NOT get a refund.

I'm not trying to rub it in, but I would like to clarify the explanations that are coming out. It looks like you've confused a "refundable tax credit" with a refund of tax overpayment.

A "refundable tax refund actually can create a negative (below zero) tax refund, where the government pays you taxpayer money to offset your negative liability. For example, if you had $1000 in tax liability and a $1500 refundable credit, you would get a check for $500 that never was "your money" in the first place.

A non-refundable credit is just what was mentioned in the quote. It cannot reduce your tax liability below zero. So, if you had the same $1000 tax liability, but the $1500 credit were non-refundable, you'd get no check. Of course, you wouldn't have to write one, either.

A tax refund for overpayment/overwithholding is different in that it's just refunding money that you paid but never owed in the first place. For example, if you had $1500 withheld over the course of 2015 but then determined that you only owed $1000 in 2015 taxes after working up your return, you would get a $500 refund because you initially overpaid that $500. It doesn't matter if you came to that $1000 liability through using refundable credits, non-refundable credits, or no credit at all.

 

[jjh1234]

Roughly, what income would require a tax of $7500?

I know there are many factors, but say someone married filing jointly and average deductions.

If someone were single making ~$125,000 and taking standard deduction, your federal tax liability would be ~20,000 if that helps.