Tax credit 2023 [The tax credit discussion thread]

[larns576]

I think it comes out to about the same, just slightly less work if you purchase next year. Assuming your income/tax liability stays the same both years, it all comes down to if you want to buy the car now or later.

Purchase 2023 (now): You can adjust your withholding to exempt so they don't take any federal taxes out, then revert back when you anticipate it reaching ~$7500. Near instant tax refund! Just don't forget to revert back or you'll be owing alot of taxes next year!
Purchase 2024: They deduct the refund at the time of purchase. Adjusting the W2 not necessary.

 

[ergillett]

I think it comes out to about the same, just slightly less work if you purchase next year. Assuming your income/tax liability stays the same both years, it all comes down to if you want to buy the car now or later.

Purchase 2023 (now): You can adjust your withholding to exempt so they don't take any federal taxes out, then revert back when you anticipate it reaching ~$7500. Near instant tax refund! Just don't forget to revert back or you'll be owing alot of taxes next year!
Purchase 2024: They deduct the refund at the time of purchase. Adjusting the W2 not necessary.

Thank you for confirming my thoughts, larns576! I'll look into this more, but wanted to know if I was on the right track with my comparisons.

 

[Redhill_qik]

How do we know if/when Tesla does this? I don't see any document listed under our MY purchased on 3/30/2023 for this explicit purpose. Wondering if Tesla will validate whether this step has actually been completed somehow?

When I just completed my Tesla order, I was asked to provide my social security number which I assume will be used to submit this information.

 

[skylines]

Hi,
I am purchasing MYP with a family member and plan to claim ev credit through only one person. The other person doesnt meet income limit. Is there any potential problem to this? Title is going to have both of our names on it and registration of the car as well.

I also read on IRS website that in order to qualify for the credit, the seller has to report my name and tax id to IRS. Any issue with this since only one owner qualifies for the credit?

I would appreciate your advice

I have similar situation. My thought is that the main consideration is what the seller of the vehicle reports. If Tesla were to report the sale to the taxpayer claiming the credit, it seems unlikely you'd run into an issue. You'd also want the person claiming the credit to be on the vehicle's title, as that shows who owns the vehicle.

If the person claiming the credit gets audited by the IRS, they will have to demonstrate they properly qualify for the credit (namely - they "own" the vehicle). How the car is registered probably won't be dispositive, but might raise questions. Did the money for the purchase come from multiple people? Does someone else primarily drive the car? Did they sell the car again after a month? Seems like it will depend on the totality of the circumstances. And it probably only comes up in an audit.

Would definitely be interested in what other people have experienced.

 

[bubohoot]

I checked with my accountant before ordering the Model Y. We're going to file for it at the end of the year, but he's not confident I'll get the credit. I make too much individually (over $150k) to qualify for the tax credit, but I'm getting married later this year and will file taxes jointly for the first time. Since our combined income will be low enough for couples filing jointly (less than $300k), I may or may not get the credit. Accountant was unable to find any instances of someone being in the same situation so he recommended I wait until we're married to buy the car. Good advice, but uhhh... I couldn't wait lol

 

[DP26]

I checked with my accountant before ordering the Model Y. We're going to file for it at the end of the year, but he's not confident I'll get the credit. I make too much individually (over $150k) to qualify for the tax credit, but I'm getting married later this year and will file taxes jointly for the first time. Since our combined income will be low enough for couples filing jointly (less than $300k), I may or may not get the credit. Accountant was unable to find any instances of someone being in the same situation so he recommended I wait until we're married to buy the car. Good advice, but uhhh... I couldn't wait lol

um, getting married on any date in the tax year is married for all. Many Dec 31 marriages for taxation reasons. I strongly doubt the credit has any language regarding marriage date.

Same as having a child born on Dec 31…

 

[skylines]

I checked with my accountant before ordering the Model Y. We're going to file for it at the end of the year, but he's not confident I'll get the credit. I make too much individually (over $150k) to qualify for the tax credit, but I'm getting married later this year and will file taxes jointly for the first time. Since our combined income will be low enough for couples filing jointly (less than $300k), I may or may not get the credit. Accountant was unable to find any instances of someone being in the same situation so he recommended I wait until we're married to buy the car. Good advice, but uhhh... I couldn't wait lol

Don’t think the IRS cares when you buy the car during the year vs the wedding date. They just care who is reported as the buyer from Tesla and your qualification in the tax year you bought (or year before). From the IRS point of view you are married for 2023 and you bought the car in 2023. At least that would be my story…

Also congrats!

 

[bubohoot]

Don’t think the IRS cares when you buy the car during the year vs the wedding date. They just care who is reported as the buyer from Tesla and your qualification in the tax year you bought (or year before). From the IRS point of view you are married for 2023 and you bought the car in 2023. At least that would be my story…

Also congrats!

Thanks! I assumed that’s the case but accountants always tend to lean on the side of caution. I’ll set myself a reminder to post what ends up happening in case anyone else ends up running into this situation.

 

[DP26]

Thanks! I assumed that’s the case but accountants always tend to lean on the side of caution. I’ll set myself a reminder to post what ends up happening in case anyone else ends up running into this situation.

Accountant seems to have looked for matching some exact situation. Does not work for new things, and only really required some (now un)common sense thought. Sometimes using (now un)common sense and experience is the answer. THAT is what you are paying the accountant for as you can google the things which already have ruling or cases posted.

 

[beewang]

I checked with my accountant before ordering the Model Y. We're going to file for it at the end of the year, but he's not confident I'll get the credit. I make too much individually (over $150k) to qualify for the tax credit, but I'm getting married later this year and will file taxes jointly for the first time. Since our combined income will be low enough for couples filing jointly (less than $300k), I may or may not get the credit. Accountant was unable to find any instances of someone being in the same situation so he recommended I wait until we're married to buy the car. Good advice, but uhhh... I couldn't wait lol

Agree with @DP26 and @skylines and suggest @bubohoot ... Dude you need to get a new tax preparer. S/he just gave you some really bad advice on some really basic facts you painted.

beewang

 

[ItsNotAboutTheMoney]

https://www.irs.gov/pub/irs-news/at-04-75.pdf

Your marital status on December 31 determines whether you are considered
married for that year.

Corollary: to be sure, marry, buy, and if it all goes to hell quickly at least don't divorce until the New Year.

 

[flixden]

For the tax credit: will that be handled during delivery and subtracted from the purchase price, or do I need to take care of that with my 2023 tax return next April, meaning that I need to fund/finance the full purchase price?

 

[advil0]

For the tax credit: will that be handled during delivery and subtracted from the purchase price, or do I need to take care of that with my 2023 tax return next April, meaning that I need to fund/finance the full purchase price?

It is handled when you file your taxes, currently it cannot be applied at the point of sale, however I believe in 2024 it can be.

 

[thefisch]

Not sure that the qualifications for taxpayers change in 2024 when the point of sale treatment takes affect. So when the point of sale credit takes affect there would either have to be a verification of qualification at time of purchase or it would be treated as an advanced credit that would have to take into account on your 2024 taxes. Anyone see details on that?

 

[flixden]

Tesla is asking for my social security number for the registration. They say it's needed such they can report this to the IRS, which in fact is a requirement for me to be able to claim the $7,500 tax credit.

Does anybody know if this is correct, and I do really have to give them my SS# through an app?
I would like to avoid that, if not absolutely necessary ....

Thanks for any feedback on this!!

 

[beewang]

Tesla is asking for my social security number for the registration. They say it's needed such they can report this to the IRS, which in fact is a requirement for me to be able to claim the $7,500 tax credit.

Does anybody know if this is correct, and I do really have to give them my SS# through an app?
I would like to avoid that, if not absolutely necessary ....

Thanks for any feedback on this!!

I don't know if that is correct. Everybody says it is the case but I have not been able to find any IRS publications stating so.

In the past, you need to provide your VIN# on form 8936 and that was IT! Until I can find something on Treasury Dept. pub or on the IRC, I am going to assume providing SS# for tax credit is BS.

https://www.irs.gov/pub/irs-pdf/f8936.pdf

Credits for new clean vehicles purchased in 2023 or after | Internal Revenue Service

You may qualify for a clean vehicle tax credit up to $7,500 if you buy a new, qualified plug-in electric vehicle or fuel cell electric vehicle.

www.irs.gov

 

[flixden]

I don't know if that is correct. Everybody says it is the case but I have not been able to find any IRS publications stating so.

In the past, you need to provide your VIN# on form 8936 and that was IT! Until I can find something on Treasury Dept. pub or on the IRC, I am going to assume providing SS# for tax credit is BS.

https://www.irs.gov/pub/irs-pdf/f8936.pdf

View attachment 939285

Credits for new clean vehicles purchased in 2023 or after | Internal Revenue Service

You may qualify for a clean vehicle tax credit up to $7,500 if you buy a new, qualified plug-in electric vehicle or fuel cell electric vehicle.

www.irs.gov

Thanks for your response!

I actually did find it:
Credits for New Clean Vehicles Purchased in 2023 or After | Internal Revenue Service

Quote from that link:

The sale qualifies only if:

• You buy the vehicle new
• The seller reports required information to you at the time of sale and to the IRS.
  
  • Sellers are required to report your name and taxpayer identification number to the IRS for you to be eligible to claim the credit.

So it may be safer to just submit the SS#, to avoid any issues with the IRS. Those can quickly turn into real headaches ....

EDIT: I just noticed that you have provided the same link at the bottom of your message. It's right there.

 

[beewang]

Thanks for your response!

I actually did find it:
Credits for New Clean Vehicles Purchased in 2023 or After | Internal Revenue Service

Quote from that link:

The sale qualifies only if:

• You buy the vehicle new
• The seller reports required information to you at the time of sale and to the IRS.
  
  • Sellers are required to report your name and taxpayer identification number to the IRS for you to be eligible to claim the credit.

So it may be safer to just submit the SS#, to avoid any issues with the IRS. Those can quickly turn into real headaches ....

EDIT: I just noticed that you have provided the same link at the bottom of your message. It's right there.

Thank you!
I am taking a screenshot so we can put this one to bed

 

[dohmahmigh]

i ordered mine back in January and can't remember if it was required to provide SS# during the registration process, nor do i remember providing it. Can someone please remind if that was mandatory or optional? thanks.

 

[flixden]

i ordered mine back in January and can't remember if it was required to provide SS# during the registration process, nor do i remember providing it. Can someone please remind if that was mandatory or optional? thanks.

It asked me for it, and there was an option to opt out / bypass it. When I clicked that bypass option, it warned me that there won't be another chance to enter that information, and that Tesla won't be able to report the information to the IRS, which they said was a requirement for the tax credit. So I went back and gave them my SS#.