IRS Form 8936 Section 4a Question

[DCEV]

I'm sending all my 2019 financials to my accountant and to make sure things are done properly I want to give him exactly what should go in Form 8936

https://www.irs.gov/pub/irs-pdf/f8936.pdf
About Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit | Internal Revenue Service

I purchased my car in March of 2019 so I qualify for the 50% of $7,500 tax credit. My question is what do I enter in section 4a? is it $7,500 or is it $3,750?

I'm thinking 4a should be $7,500, 4b should be 50%, and 4C should be $3,750. Is that correct?

 

[SaveOurPlanet]

If you need to tell your tax accountant how to do his/her job, you might as well just save some money and buy TurboTax.

 

[murphyS90D]

The critical date is not when you purchased the car. It is the date you took possession of the car and started driving it.

 

[ilyak]

7500. You multiply it by 4b to get the tentative credit in 4c.

 

[ucmndd]

7500. You multiply it by 4b to get the tentative credit in 4c.

Or better yet, the accountant that you’re presumably paying because he knows what he’s doing does.

 

[ItsNotAboutTheMoney]

Tell your accountsnt that the base amount of credit is $7500 (as can be seen in instructions) and phaseout percentage is 50%.

I agree that the instructions are rather unclear, but you can simply follow the kWh calculation to derive the $7,500.

The critical date is not when you purchased the car. It is the date you took possession of the car and started driving it.

Wrong. The critical date for calculating phaseout is when you acquired the car, which is when title transfers under state law, which is when the sale was completed (as far as I am aware for all states).

When you put the car into service determines the tax year for which you claim the credit.

 

[DCEV]

If you need to tell your tax accountant how to do his/her job, you might as well just save some money and buy TurboTax.

Oh that's nothing. I tell EVERYONE how to do their job

 

[DCEV]

7500. You multiply it by 4b to get the tentative credit in 4c.

Thanks. That's what I assumed. As far as I can tell the date is the "in service" date when you physically picked up the car, signed the paperwork, and gave Tesla a big fat check.

 

[EV User]

I purchased an S in Oct 2019 and was advised by Tesla that the credit would be $1,875; however, when I did my taxes using Turbo Tax (which I would no longer recommend) the credit provided was only $469, 1/16 of $7,500. Has anyone else experienced this?

 

[KyleDay]

I purchased an S in Oct 2019 and was advised by Tesla that the credit would be $1,875; however, when I did my taxes using Turbo Tax (which I would no longer recommend) the credit provided was only $469, 1/16 of $7,500. Has anyone else experienced this?

Do you have enough tax liability to take advantage of the maximum credit? You have to have high enough taxes to take advantage. It's not a refundable credit.

 

[ItsNotAboutTheMoney]

I purchased an S in Oct 2019 and was advised by Tesla that the credit would be $1,875; however, when I did my taxes using Turbo Tax (which I would no longer recommend) the credit provided was only $469, 1/16 of $7,500. Has anyone else experienced this?

There's a thread where other users have reported problems with Turbo Tax.
It seems like they were putting the reduced amount in 4a, then the phaseout percentage in 4b, which caused a double reduction.

I can see how Turbo Tax made the error.

The instructions for the form for 4a tell you to look at another document for the amount, but that document just gives the _tentative credit_ based on date acquired, which includes the phase-out adjustment. So, it's like Turbo Tax incorrectly used that table for 4a, but separately had the phase-out percentage.

Anyway, I hope that Intuit have communicated to the IRS that its instructions suck. In my simple experience, the IRS instructions are usually much better than that.