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If I reserve an X now will the $7500 tax credit still be there?

thgchris

Member
May 19, 2014
81
2
Seattle, WA
I searched the forum but the threads I found were from 2014 or earlier. Just curious how much longer the $7500 tax credit remains. I assume it won't be there by the time Model 3 is out but if I reserve an X now (and it's delivered at least sometime in 2016) will I still get it?
 

mark

Member
Sep 8, 2012
237
107
Dallas
I think you're safe - it cuts off at 200,000 US sales and they only made 100,000 cars of which a substantial percentage went overseas. They won't hit 200k in US till 2017 at the earliest.
 

cpa

Active Member
May 17, 2014
3,219
4,285
Central Valley
The full $7,500 federal income tax credit is available until the manufacturer sells 200,000 vehicles domestically. Then, it begins to subside. All cars purchased in the calendar quarter when Tesla hits the 200,000 threshold will receive the full $7,500. (In other words, if they sell car #200,000 on July 5, then everyone who buys a car through September 30 still qualify for the full $7,500. Conversely, if they hit 200,000 on September 28, then only two more days of purchasers receive it.)

Starting in the first quarter after car #200,000 is sold, the credit reduces to $3,750. This figure stays in effect for two calendar quarters. Finally, for the third and fourth quarters after car #200,000 is sold, the credit reduces even further to $1,875. These reduced credits are limited only by time; Tesla could sell a million vehicles per month and all buyers would still receive these reduced credits.

To summarize: Tesla sells its 200,000th domestic vehicle July 5, 2018.

All cars purchased through September 30, 2018, are eligible for the $7,500 credit.
Cars purchased October 1, 2018, through March 31, 2019, are eligible for the reduced $3,750 credit.
Cars purchased April 1, 2019, through September 30, 2019, are eligible for the further reduced $1,875 credit.

Tesla is responsible for publicizing the eligibility for these credits. The Internal Revenue Service tries to keep up, but are notoriously way behind.

And, you must take title. Merely making a deposit or prepaying weeks in advance will not cut it. You must be the legal owner during whatever time period in order to figure the correct amount of income tax credit.
 

Merrill

Merrill
Jan 23, 2013
4,003
1,451
Sonoma, California
The full $7,500 federal income tax credit is available until the manufacturer sells 200,000 vehicles domestically. Then, it begins to subside. All cars purchased in the calendar quarter when Tesla hits the 200,000 threshold will receive the full $7,500. (In other words, if they sell car #200,000 on July 5, then everyone who buys a car through September 30 still qualify for the full $7,500. Conversely, if they hit 200,000 on September 28, then only two more days of purchasers receive it.)

Starting in the first quarter after car #200,000 is sold, the credit reduces to $3,750. This figure stays in effect for two calendar quarters. Finally, for the third and fourth quarters after car #200,000 is sold, the credit reduces even further to $1,875. These reduced credits are limited only by time; Tesla could sell a million vehicles per month and all buyers would still receive these reduced credits.

To summarize: Tesla sells its 200,000th domestic vehicle July 5, 2018.

All cars purchased through September 30, 2018, are eligible for the $7,500 credit.
Cars purchased October 1, 2018, through March 31, 2019, are eligible for the reduced $3,750 credit.
Cars purchased April 1, 2019, through September 30, 2019, are eligible for the further reduced $1,875 credit.

Tesla is responsible for publicizing the eligibility for these credits. The Internal Revenue Service tries to keep up, but are notoriously way behind.
So based on a previous post which included global sales, this put the expiration out even further.
 

thgchris

Member
May 19, 2014
81
2
Seattle, WA
Ok cool - I missed out on the WA state sales tax exemption but have been waiting for Model X. Not that $7,500 (or no sales tax) should make or break a higher end car buying decision. Just nice to know for calculations.
 

O-G

Member
Oct 3, 2014
211
1
Tacoma, Wa
Ok cool - I missed out on the WA state sales tax exemption but have been waiting for Model X. Not that $7,500 (or no sales tax) should make or break a higher end car buying decision. Just nice to know for calculations.

Really? You don't think that $12k-$13k sales tax makes a difference in the decision? It just increased the price of the car by 10%. You my friend must have way more money than I do. Our liberal legislature and governor seem to think that if you are buying something more than a Kia, you have unlimited funds. So much for pushing for green.

Sorry, brief rant. I've waited 3 1/2 years for this car and because of all the delays, to see the tax credit disappear 3 months before my purchase is frustrating. I even tried to "prepurchase" the car from TM in June but they would not go for that. Had to be "delivered".
 

dgpcolorado

high altitude member
Apr 25, 2015
2,655
3,934
The Western Slope, Colorado
The full $7,500 federal income tax credit is available until the manufacturer sells 200,000 vehicles domestically. Then, it begins to subside. All cars purchased in the calendar quarter when Tesla hits the 200,000 threshold will receive the full $7,500. (In other words, if they sell car #200,000 on July 5, then everyone who buys a car through September 30 still qualify for the full $7,500. Conversely, if they hit 200,000 on September 28, then only two more days of purchasers receive it.)

Starting in the first quarter after car #200,000 is sold, the credit reduces to $3,750. This figure stays in effect for two calendar quarters. Finally, for the third and fourth quarters after car #200,000 is sold, the credit reduces even further to $1,875. These reduced credits are limited only by time; Tesla could sell a million vehicles per month and all buyers would still receive these reduced credits.

To summarize: Tesla sells its 200,000th domestic vehicle July 5, 2018.

All cars purchased through September 30, 2018, are eligible for the $7,500 credit.
Cars purchased October 1, 2018, through March 31, 2019, are eligible for the reduced $3,750 credit.
Cars purchased April 1, 2019, through September 30, 2019, are eligible for the further reduced $1,875 credit...
Not quite:

The tax credit phases out for a year and a quarter after Tesla USA sales hit 200k beginning with the second quarter after hitting the benchmark.
The new qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009) (“phase-out period”). Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit if acquired in the first two quarters of the phase-out period and 25 percent of the credit if acquired in the third or fourth quarter of the phase-out period. Vehicles manufactured by that manufacturer are not eligible for a credit if acquired after the phase-out period.
Internal Revenue Bulletin - November 30, 2009 - Notice 2009-89

My take on this:

Q0 USA sales hit 200k
Q1 Full credit available, $7500
Q2 50% credit available, $3750
Q3 50% credit available, $3750
Q4 25% credit available, $1875
Q5 25% credit available, $1875
Q6 no credit available
 

Aljohn

Member
Oct 17, 2014
914
516
Georgia
To be clear @thgchris, it is important to note the "Tax Credit" is not a guarantee. Have your tax professional review the code, and your individual situation. First the Taxes OWED to the federal Government has to be equal to or greater than $7500. The car must be new, not used or resale. There are alternative minimum tax (AMT) rules that may apply. Every situation is different, so only you or your tax pro can determine. Also, the $7500 is not really off the price as Tesla indicates in the Design Center. You must pay the full CASH price -- down payment + financing. You will receive the Tax Credit only when filling the taxes the following year. So if you take delivery in July 2016, you pay the full price and file for the "credit" in 2017 tax filing and receive the refund afterwards.

Just so it is clear on the funding needed to "buy" the car. Tesla (unfortunately) shows the price differently in the Design Center.
 

thgchris

Member
May 19, 2014
81
2
Seattle, WA
Really? You don't think that $12k-$13k sales tax makes a difference in the decision? It just increased the price of the car by 10%. You my friend must have way more money than I do. Our liberal legislature and governor seem to think that if you are buying something more than a Kia, you have unlimited funds. So much for pushing for green.

Sorry, brief rant. I've waited 3 1/2 years for this car and because of all the delays, to see the tax credit disappear 3 months before my purchase is frustrating. I even tried to "prepurchase" the car from TM in June but they would not go for that. Had to be "delivered".

Well I just figure at this price range for a car 10% shouldn't matter much. Like yah it is nice to have (I'd prefer 20% off or 50% off etc), but if it's a stretch at 10% more expensive it may not be the best decision to buy this type of vehicle. You could literally buy something 90% less expensive than a MX and it will still get you from point A to point B.

You're buying something guaranteed to go down in value when you get a car unless it's collectible and even that is economy dependent (no one buying their childhood dream cars in 2008)

To be clear @thgchris, it is important to note the "Tax Credit" is not a guarantee. Have your tax professional review the code, and your individual situation. First the Taxes OWED to the federal Government has to be equal to or greater than $7500. The car must be new, not used or resale. There are alternative minimum tax (AMT) rules that may apply. Every situation is different, so only you or your tax pro can determine. Also, the $7500 is not really off the price as Tesla indicates in the Design Center. You must pay the full CASH price -- down payment + financing. You will receive the Tax Credit only when filling the taxes the following year. So if you take delivery in July 2016, you pay the full price and file for the "credit" in 2017 tax filing and receive the refund afterwards.

Just so it is clear on the funding needed to "buy" the car. Tesla (unfortunately) shows the price differently in the Design Center.

Yah well they do that to make it seem less expensive than it is of course hah. Is their an income phase out for the $7500? I can ask my accountant but if someone knows just curious.
 

liuping

Active Member
Jul 23, 2013
2,243
897
San Diego
Well I just figure at this price range for a car 10% shouldn't matter much. Like yah it is nice to have (I'd prefer 20% off or 50% off etc), but if it's a stretch at 10% more expensive it may not be the best decision to buy this type of vehicle. You could literally buy something 90% less expensive than a MX and it will still get you from point A to point B.

You're buying something guaranteed to go down in value when you get a car unless it's collectible and even that is economy dependent (no one buying their childhood dream cars in 2008)



Yah well they do that to make it seem less expensive than it is of course hah. Is their an income phase out for the $7500? I can ask my accountant but if someone knows just curious.

There has not been an income phase out and it has not been affected by AMT. Of course that could change at any time.
 

ItsNotAboutTheMoney

Well-Known Member
Jul 12, 2012
10,785
8,019
Maine
To be clear @thgchris, it is important to note the "Tax Credit" is not a guarantee. Have your tax professional review the code, and your individual situation. First the Taxes OWED to the federal Government has to be equal to or greater than $7500. The car must be new, not used or resale. There are alternative minimum tax (AMT) rules that may apply. Every situation is different, so only you or your tax pro can determine. Also, the $7500 is not really off the price as Tesla indicates in the Design Center. You must pay the full CASH price -- down payment + financing. You will receive the Tax Credit only when filling the taxes the following year. So if you take delivery in July 2016, you pay the full price and file for the "credit" in 2017 tax filing and receive the refund afterwards.

Just so it is clear on the funding needed to "buy" the car. Tesla (unfortunately) shows the price differently in the Design Center.

You still get the Fed credit if you pay AMT.
 

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