Oh, so you're saying you never actually see the $7500, so you really cant put it towards an MSRP. But you can put it as an one of the perks. I'm glad you cleared that up because I was tired of seeing $45K-$7500= $37500. It has always been a misleading factor.
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Model Y standard range is here
- Thread starter hlin07
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Oh, so you're saying you never actually see the $7500, so you really cant put it towards an MSRP. But you can put it as an one of the perks. I'm glad you cleared that up because I was tired of seeing $45K-$7500= $37500. It has always been a misleading factor.
iamnid
Active Member
More or less. You'll pay the full purchase price and that amount will factor into the monthly payment if you are financing. THEN, the next year when you do your taxes, they'll take $7,500 off whatever you owe in taxes or you'll get $7,500 back in addition whatever you were going to get back otherwise. At least, that's how it worked with the $1,750 I "got back" with the model 3 I bought at the end of 2019.
Some states do have an independent rebate (like NJ did until 12/15) where you get the full value of the rebate in 'cash'. Others have a point-of-sale rebate where the credit is applied by the manufacturer at the time of purchase reducing your cost (I believe CA has that, and rumors are the when the NJ rebate comes back, it will also be a POS rebate).
Knightshade
Well-Known Member
You won't get $7500 back unless you OWED at least $7500.
Where people get confused on this is the difference between tax liability and tax withholding.
You owe X dollars for the year to the IRS for taxes. That's your liability.
If you work, your employer will withhold some money to essentially "pre-pay" this.
When you do your taxes, you compare one number to the other and either the withholding overpaid your liability- and you get a refund of the difference...or it underpaid and you owe the difference.
The $7500 EV tax credit offsets LIABILITY. But only to the amount of that liability.
Removing the withholding part for a second- If you only have $3000 liability, you can't get $7500 in tax credit... you'd only get the $3000 liability offset and owe $0 and get $0 refund.
So the tax credit alters the liability number.
Then if you do withholding that'd be compared to the tax-credit-adjusted liability (which again can not be less than 0)- if your liability goes to 0 with the credit then your refund would be whatever amount your employer withheld.
That's why you only get $7500 "back" if you have at least $7500 in liability in the first place... and "how much you normally get for a refund" tells you nothing about that.
Why are we needing to explain how the federal tax incentive works again? It’s the exact same thing as when Tesla cars were eligible for it back in time. There’s probably over a hundred threads about it if you do a simple search on this forum alone.
Because its misleading and always has been to say its $7500 off the sale price of the car. It's never been the case. Those who love Tesla have always done that when comparing to ICE cars and now its being done to say why a MachE or VW is cheaper than a Tesla when its not the case.
Show me where on the VW main pages that show the ID4 costs $32,500 upfront?
I get what you are saying. But because of the misleading issues, no manufacturer can advertise their prices as being lower cost upfront now. It has been this way for some time.
I would go as far as saying that Tesla’s implementation is more misleading by making the “Include potential savings” (which they include gas savings) as the default price shown. One has to toggle it to show “purchase price” to see the upfront price.
Biden plans on changes to the tax credit. It’s likely all EV’s will be treated alike.
I agree. I meant people shopping and comparing always like to throw the -$7500. Don't get me wrong, the tax incentive is great at the end of the day.
It’s unlikely that most Tesla purchasers will not have enough tax liability to get the entire 7500 dollar credit. You don’t need that much income to reach that level.
I think that most people do factor that in legitimately because they are moving up to an EV, which is higher priced than a similar gas efficient ICE. Just like it was with the base Tesla models when there still were federal tax incentives available.
Obviously, there are other factors but a single filer will need an income of $65,627 in 2020 to have $7,500 in tax liability.
Maybe it's because I didn't own a car for 11 years living in cities with public transportation but it seems crazy to buy a ~$40k car with an income of ~$65k. I couldn't find much about the median price paid for a car in the US but it seems like the avg. new car price is up to $38k and avg used car price is $21k so maybe I'm the one out of touch.
Maybe it's because I didn't own a car for 11 years living in cities with public transportation but it seems crazy to buy a ~$40k car with an income of ~$65k. I couldn't find much about the median price paid for a car in the US but it seems like the avg. new car price is up to $38k and avg used car price is $21k so maybe I'm the one out of touch.
Or maybe you're just one of the smart ones. I think most people spend far, far too much money on discretionary items across teh entire income spectrum.
Serious BITCH move Elon!!!! 16 months I've been waiting while you have been holding on to my $2,500. Now anyone can just walk to the front of the line with $100 and get a SR Y in 2-5 weeks...yet you can't take that same SR Y and put in the AWD Y battery and fulfill your backorders FIRST! Also, we've been told that the LR RWD will not have towing...yet the SR RWD has that option. Can't upgrade to AWD without paying today's higher price either. Serious BITCH move!
Yes, the average car price has gone up to over $38K. If you’re making $65K and you expect to have the full $7,500 in credits, you’re not paying $40K. You’re paying $32,500. Especially if one takes out a car loan, $40K is not what one is paying upfront.
It should be for all automakers on cars under $30,000 to encourage low cost EV's.
everydaychris
Active Member
Oh really? Is that how federal tax credit works? Like solar?
so if I don’t owe anything I’ll get that money back?
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