dreamwave6
Member
Even if not incented, for a purchase already made, it does at least help stimulate the economy.
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Retroactive & at-sale full $7500 EV tax credit (Electric Credit Access Ready at Sale [CARS] Act)
- Thread starter Mardak
- Start date
Even if not incented, for a purchase already made, it does at least help stimulate the economy.
I only linked to Senate version S. 395 yesterday, but you can mention H.R. 1271 for the one in the House:
To amend the Internal Revenue Code of 1986 to extend certain tax credits related to electric cars, and for other purposes. (H.R. 1271)
Although just mentioning Electric CARS Act is probably clear enough which bill you're talking about.
The bill doesn't add income limits, and it effectively expands the credit to those with lower income by allowing the credit to be used over multiple years whereas currently the maximum credit is your tax liability for that year. For example, an individual with $66k income has about $7500 income tax after standard deduction to get the full tax credit; whereas with this bill, an individual with a steady $27k income has $1500 tax that can still get the full $7500 credit over 5 years resulting in $0 tax.
This could be particularly interesting if there's a $25k Tesla that would normally have a $350/mo payment effectively reduced to $240/mo with the full tax credit.
I guess it depends on how people view tax credits / relief / incentives to begin with. A family with a new child born in December gets a recurring $2000 credit multiple year going forwards the same as if the child was born months earlier in January. Is this a "reward" or incentive for parents to have kids vs some overall intent that the government wants to assist/promote families where that same $2000 credit could provide more benefit to a lower income family than to one with more income? And as you suggest, the tax savings would allow the family to use the money for other things.
Another way to look at the ability of this EV tax credit to save $1500/year over 5 years: a family with 2 kids with $61k income today would pay $0 federal income tax, and if this bill passes, that same family's income could increase to $74k and buy an EV and still pay $0 federal income tax for 5 years.
The retroactive changes were/are necessary - else sales will slump. Had the original version been retroactive you'd probably see fewer posts about waiting....
And for those that bought in December, you got a year of supercharging and green colored maps. I didn't need that stuff so I bought in January [slap]
And for those that bought in December, you got a year of supercharging and green colored maps. I didn't need that stuff so I bought in January [slap]
What are these green colored maps you speak of? And I think we can all agree 7k in the bank is better than a year of free supercharging.
Mrbrock
Active Member
Pretty sure the “person financing the vehicle” is the dealer or bank, not the buyer/lessee. As the buyer or lessee, you can allocate the credit to the dealer/bank. What they do with it is up to them. It is intended to be given back the law does not stipulate that in that case the dealer must reduce the vehicle price or the bank must apply that credit to the amount owed.
Again, this is a tax liability offset, not a rebate. If it was a rebate, there would need to be money transferred from the govt to each dealer for each car sold or the dealers would lose $7500 per sale.
Again, this is a tax liability offset, not a rebate. If it was a rebate, there would need to be money transferred from the govt to each dealer for each car sold or the dealers would lose $7500 per sale.
I was looking through the history of the bill, and the original version from 2014 explicitly says "Credit may be assigned to seller … if assigned by the initial taxpayer to the person who sold such vehicle to the initial taxpayer, may be taken into account by such person" which clearly indicates the buyer, who might not have the full $7500 tax liability, could have the seller/dealership claim the $7500 credit instead with the intent that the seller reduces the purchase price of the EV by ideally the full $7500. That's why the bill is called "Credit Access Ready at Sale" as it provides a way to turn the tax credit effectively into an at-sale rebate.
It seems like the updated (and more confusing) "financing entity" language, which includes "lease of at least 2 years," allows for more flexibility for the tax credit to be assigned in both "directions." The current behavior without this bill has the "dealership" already claiming the $7500 tax credit with the expectation that lease payments are reduced.
If you want 100% guarantee of getting the tax credit, then you need to wait until the tax credit becomes law. There's always a chance that a tax credit could be retroactive, but it's not 100% guaranteed.
It seems like the non-retroactive GREEN Act has a lot more discussion activity than this retroactive Electric CARS Act, so if you have a preference for one over the other, you should write to your Senators and/or Representative. Even if the specific bill doesn't make movement in Congress, bill text can be easily amended into another active bill, and if people in Congress hear about one more than another, it could increase the chances of it getting passed.
Is this applied at purchase Or do you have to apply it at tax time. Do they have to pay back the money if they sell the car after a few years? If you can only apply the tax at tax time the car may still be unfordable. Say I can use my tax liability over several years to pay on the car. How does that make the car cheaper?. I still have a 600 dollar a month car payment the rest of the year
Sometimes I wonder if it's better to talk by phone/in-person vs submitting a message online and not necessarily getting a response for months. Even if a person converses with you, unclear if the Senator/Representative gets passed along the full/intended message although I suppose if enough people provide some sentiment, it should bubble up instead of just getting acknowledged. So far I've only filled out email forms, but I'll look into stopping by the local offices too.All set. I called on both senators and left message for one and email to the other. Also called a representative and spoke to a human.
The bill provides flexibility in doing either. If it passes, I would guess at purchase time, you sign a disclosure that you're assigning the $7500 credit to Tesla so that your purchase price is reduced by $7500. If you don't, you can claim the credit for yourself as people have done in the past.
This would be the same behavior as before as this bill primarily changes the termination behavior to not have per-manufacturer phase out. Specifically, this federal credit does not have a minimum time of ownership (unlike some state tax incentives that need to be repaid if the car is sold), but it does explicitly says "(B) which is acquired for use or lease by the taxpayer and not for resale."
Similarly, the tax credit helps makes the car cheaper just like for those who have claimed the tax credit for themselves by giving that $7500 back to you albeit a bit later after purchase at tax time or over multiple years as allowed by this bill. If you're talking about the practical aspect of budgeting your monthly expenses to adjust for the tax credit, then yes it is simpler with the bill's ability to reduce the purchase price as that cleanly spreads the credit out over the term of a car loan, but you can get a similar effect by adjusting your tax withholding so that you get $600/mo more in take-home pay instead of waiting for a tax refund check effectively making your first year of $600/mo car payments free.
Have people in California been contacting their Senators? Looks like it might have helped as Senator Feinstein joined as a cosponsor earlier this week: Details for S. 395: A bill to amend the Internal Revenue Code of 1986 to extend certain tax ... - GovTrack.us
Inspired by your post, I talked to someone at one of the original cosponsoring Senator's office, and at least their office treats opinion/feedback online and in person equally, and confirmed what you've already done with friends -- getting more people to reach out is indeed the right way for Congress to realize it's important especially for legislators that typically vote a different way and might need to see more evidence of support.I also asked my friends to do the same, call these up since they may want an EV
I wrote both my senators in California to support the Electric CARS Act. Was it Feinstein or Pelosi who had bought a bunch of TSLA Call options?
Thanks. I also just called our Representative saying this Electric CARS Act avoids short-term reduction of Tesla demand issues unlike GREEN Act's date-of-enactment especially because Tesla has a presence in this district.
I believe you're thinking of Pelosi('s husband).
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