TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker and becoming a Supporting Member. For more info: Support TMC

Is the $7,500 Federal tax credit for electric cars before AGI or after ?

Discussion in 'TSLA Investor Discussions' started by AprilDelivery??, Sep 23, 2013.

Tags:
  1. AprilDelivery??

    Joined:
    Feb 2, 2013
    Messages:
    145
    Location:
    NY
    Is the $7,500 federal tax credit for electric cars before AGI or after? Im sorry but i didn't see it on this forum.
     
  2. sleepyhead

    sleepyhead Active Member

    Joined:
    May 31, 2013
    Messages:
    1,921
    Location:
    Texas
    It's a tax credit and not a deduction. It is deducted from your tax liability and it is non-refundable (meaning you have to owe at least $7,500 in taxes to get full benefit).
     
  3. Zythryn

    Zythryn M3 Silver, M3 Midnight Silver

    Joined:
    Mar 18, 2009
    Messages:
    2,051
    Location:
    Minnesota
    It is not affected by AGI.
     
  4. AprilDelivery??

    Joined:
    Feb 2, 2013
    Messages:
    145
    Location:
    NY
    So after you deduct your standard deduction or itemized deductions you deduct the $7,500 federal tax credit?
     
  5. Zythryn

    Zythryn M3 Silver, M3 Midnight Silver

    Joined:
    Mar 18, 2009
    Messages:
    2,051
    Location:
    Minnesota
    I am not a tax accountant. But the 7500 is deducted from the amount you owe.
    I would check with an accountant, tax software, or the IRS for details.
     
  6. Objective1

    Objective1 Member

    Joined:
    Dec 29, 2012
    Messages:
    108
    Location:
    Albany, NY, USA
    A tax credit is deducted from tax owed after you have calculated the tax owed on your (adjusted) income. It's not an income deduction.
     
  7. sleepyhead

    sleepyhead Active Member

    Joined:
    May 31, 2013
    Messages:
    1,921
    Location:
    Texas
    If you make $100k and owe $10k in taxes, then you can deduct the credit of $7,500 and you will only owe $2,500 in taxes. If you had $10k withheld from your paychecks then you will get a $7,500 refund.

    If you made $100k and owe only $5k in taxes, then you will not be able to take the full advantage of the credit, because it is non-refundable. You can only deduct $5,000 from your TAX LIABILITY (aka taxes owed) and your tax liability becomes $0. So you would get a tax refund for all of the tax that was withheld from your paychecks. In this scenario you are leaving $2,500 on the table, since you weren't able to take advantage of the full $7,500 tax credit.
     
  8. AprilDelivery??

    Joined:
    Feb 2, 2013
    Messages:
    145
    Location:
    NY
    Thanks. Your the best!
     

Share This Page

  • About Us

    Formed in 2006, Tesla Motors Club (TMC) was the first independent online Tesla community. Today it remains the largest and most dynamic community of Tesla enthusiasts. Learn more.
  • Do you value your experience at TMC? Consider becoming a Supporting Member of Tesla Motors Club. As a thank you for your contribution, you'll get nearly no ads in the Community and Groups sections. Additional perks are available depending on the level of contribution. Please visit the Account Upgrades page for more details.


    SUPPORT TMC