-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Tax credit 2023 [The tax credit discussion thread]
- Thread starter CrazyRabbit
- Start date
Taycan 4s, MB EQS sedan and SUV, iX. Also possibly a 911 s or BMW M3. I actually would never purchase an EV. Current EV’s are single owner vehicles.
I am new here and I don't qualify for the tax credit, if I buy a one. I am looking to lease my first Tesla and stumbled on this thread since I wanted information on whether Tesla is passing the credit/incentive from government to owners. It's unfortunate to learn that Tesla is the only (or one of the few?) manufacture that does not pass the credit/incentive to the owner. They are missing a segment of the new car market (20%?)... If someone from Tesla is reading, please take note 
. If they would pass the $7500 credit/incentive to me, I would take a car off of their inventory today!
. If they would pass the $7500 credit/incentive to me, I would take a car off of their inventory today!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.
Nothing on that page answers my actual question.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
fholbert
Active Member
I find it hard to believe, but many people have told me no. These people purchased EV’s in the last few years and missed some or all the tax credit. As I understand it, in your example you lost out on the $3,500.
If I read the law on the IRS web site I’m 50/50.
I didn’t want to chance it, starting the 1st of this month I went exempt on my federal withholding. Right or wrong, everything will work out in the end.
Where did you hear that you could buy 2 Teslas in the same year and get 2 tax credits? It would be great if it's true because I've been contemplating to buy model 3 next month when our mini lease expires, but we already bought model y couple months ago. If we can't get additional tax credit, I think we're just going to pay off the mini. Me and my wife file taxes jointly btw.
One of us is reading his statement wrong.
I read it as he owed $4k in federal tax after doing his taxes, so I'm assuming his tax liability is greater than just $7,500. I'm also assuming he makes less than $150k/single or $300k/married.
You are reading it as his total federal tax liability is only $4k. In that case, your right. He would only get that $4k back.
fholbert
Active Member
To be clear.One of us is reading his statement wrong.
I read it as he owed $4k in federal tax after doing his taxes, so I'm assuming his tax liability is greater than just $7,500. I'm also assuming he makes less than $150k/single or $300k/married.
You are reading it as his total federal tax liability is only $4k. In that case, your right. He would only get that $4k back.
I‘ve been told by people who’ve bought EV’s in recent years and were disappointed when they filed their taxes. These people use professional tax services.
Example:
- Had $25,000 withheld from their paycheck.
- When they filed got a $5,000 refund.
- Tax credit from EV purchase was $0.
Changing your W-4 isn't going to make the end result any different. Either you're paying taxes now and you'll get a refund on that tax liability, up to $7,500 or you're not paying any taxes from your paycheck and your tax liability is reduced by $7,500. In that case, if your total tax liability is $10k and you paid in nothing during the year, you owe $2,500.
Look at your 2022 tax return and see what you owed in tax liability.
The EV rebate can only reduce your tax liability but not give you any more back than you owed during that tax year.
The tax rebate for solar system install can be spread out over multiple tax years though. Can't do that with the EV tax rebate.
If your total tax liability for the year is more than $7,500 then you will get the full amount of the tax credit. If your tax liability is less than you will only get that amount.
If your tax liability was $10,000 and through payroll deductions and/or estimated tax payments you had paid the IRS $8,000 then you would get a tax refund of $5,500 ($10,000 liability minus $7,500 EV tax credit minus the $8,000 paid).
If your tax liability was $4,000 and through payroll deductions and/or estimated tax payments you had paid $3,000 then you would get a tax refund of $3,000 ($4,000 liability minus $4,000 EV tax credit minus $3,000 paid).
On a similar tangent, does anyone know if there are restrictions on how many times you can claim the EV rebate? I saw language that restricts claiming the $4,000 for a USED EV to once in a three year period. I did not ever see that same language for a new EV though.
I would consider a second Tesla next year if there aren't any restrictions on how many times you can claim it on new EVs.
I would consider a second Tesla next year if there aren't any restrictions on how many times you can claim it on new EVs.
I'm not a tax professional, but this is my understanding of how it works. Imagine your tax bill for the year 2023 is $10,000 and you paid $12,000 from your wages through withholding. You would have been eligible for a $2,000 refund when you file your 2023 tax return.Now if you buy a MY and are eligible for the $7500 credit (within income limits and all that), your new tax bill is $10,000 - $7,500 = $2,500. When you file your 2023 tax return, instead of getting $2,000, you would get $7,500 + $2,000 = $9,500. Another way of looking at it is that you'll get $12,000 - $2,500 (new tax bill) = $9,500.
Edited: Now, if your tax bill is $4000 and you prepaid $5000 and didn't buy an EV, your 2023 refund would be $1000. If you do buy an eligible EV, your tax burden would be $0 and hence you will get back all the $5000 that you prepaid in taxes. You will miss out on the $3,500 worth of credits because your tax bill is $3,500 less that the $7,500 that EV buyers are eligible for.
Last edited:
Yes, there are no restrictions on how many times you claim the EV credit. You can also buy another eligible EV the same year and get another $7,500. credit. If you end up not having to pay as much taxes, you could do things to increase your taxable income - like converting an IRA to a Roth IRA or selling some investments for capital gains etc.
I'll just wait until next year. I won't have enough tax liability to make two happen this year. We haven't even gotten our first Tesla (waiting on delivery) so we'll see how our Y goes before we get another later. I'd probably get a 3 on the next one if it goes well.
In this scenario you are missing out on $3,500 as the $7,500 EV tax credit is limited to $4,000.
Similar threads
- Sticky
