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Tax Credit Clarification
- Thread starter SmarterMotors
- Start date
wilhelmspencer
Model 3 Reserved 3/31/16 In Store 10:20 PST
JBare
Member
OKAY, so I know the best way to do this is to hire a CPA, but lets just say I purchased a Model 3 in December. In order to find out if I can get the $7,500 credit I want to look at:
Line 63 TOTAL TAX
or
Line 44 - Line 55 = $X (and as long as X is < $7,500 you'd get the full credit) which for me would also = Line 56
As an East coaster who will probably get more of a base model I'm assuming I have a chance for a 2018 purchase and am planning extra-ahead.
For those of you who have done this on a Model S/X what line does that credit show up on?
Line 63 TOTAL TAX
or
Line 44 - Line 55 = $X (and as long as X is < $7,500 you'd get the full credit) which for me would also = Line 56
As an East coaster who will probably get more of a base model I'm assuming I have a chance for a 2018 purchase and am planning extra-ahead.
For those of you who have done this on a Model S/X what line does that credit show up on?
cpa
Active Member
Line 44. Do not look at line 63. Ever. The credit appears on line 54, with box c checked and "form 8936" printed on the blank line to the right.
Lines 48 through 53 can also serve to reduce the amount otherwise available to be reduced by the BEV credit claimed on form 8936. So, if your tax on line 44 is reduced first by the foreign tax credit, child care expenses credit or the child tax credit, you might not realize the entire $7,500.
Line 63 includes additional taxes that are not income tax related, including but not limited to SE tax, net investment income tax, additional Medicare tax and the penalty for premature distribution from qualified plans.
The Code is arranged in a way so that income and the related taxes on income are in one part of the Code, while other items that are not based on income are in different subchapters with different sections. Form 1040 is organized to reflect these differences.
Lines 48 through 53 can also serve to reduce the amount otherwise available to be reduced by the BEV credit claimed on form 8936. So, if your tax on line 44 is reduced first by the foreign tax credit, child care expenses credit or the child tax credit, you might not realize the entire $7,500.
Line 63 includes additional taxes that are not income tax related, including but not limited to SE tax, net investment income tax, additional Medicare tax and the penalty for premature distribution from qualified plans.
The Code is arranged in a way so that income and the related taxes on income are in one part of the Code, while other items that are not based on income are in different subchapters with different sections. Form 1040 is organized to reflect these differences.
JBare
Member
Thank You!! I've spent some time researching this topic but this thread has been the best!
Hi. Here is the latest situation. Both the pessimistic scenario and the optimistic scenario look possible. It's a close call. My calculations show they will hit 200K USA sales on 21st Dec 2017 if things go according to plan. As of today, I'm calculating 115,375 sales in the USA. If they hit their targets, they will finish this year with 44,702 Model 3's and 206,096 total USA sales. That's the pessimistic scenario in terms of tax credits. However, it's possible that volume production won't start in Sep 2017 as planned. Another possibility is that Tesla might game the system by shipping more cars to Europe and Asia near the end of this year.
Pessimistic Scenario (if Tesla hits 200,000 USA sales in Q4 2017)
$7,500 for deliveries until Mar 31, 2018
$3,750 for deliveries until Sep 30, 2018
$1,875 for deliveries until Mar 31, 2019
Optimistic Scenario (if Tesla hits 200,000 USA sales in Q1 2018)
$7,500 for deliveries until Jun 30, 2018
$3,750 for deliveries until Dec 31, 2018
$1,875 for deliveries until Jun 30, 2019
Here are the recent data points that matter. The first three bullet points are from the Feb 22, 2017 shareholder letter:
In the future, for the latest info on this issue, you can open THIS page and scroll all the way to the right. If you are a Model 3 reservation holder, check out the Model 3 Delivery Estimator. It integrates this information to the output based on your delivery estimate.
Pessimistic Scenario (if Tesla hits 200,000 USA sales in Q4 2017)
$7,500 for deliveries until Mar 31, 2018
$3,750 for deliveries until Sep 30, 2018
$1,875 for deliveries until Mar 31, 2019
Optimistic Scenario (if Tesla hits 200,000 USA sales in Q1 2018)
$7,500 for deliveries until Jun 30, 2018
$3,750 for deliveries until Dec 31, 2018
$1,875 for deliveries until Jun 30, 2019
Here are the recent data points that matter. The first three bullet points are from the Feb 22, 2017 shareholder letter:
- Model 3 on track for initial production in July, volume production by September
- Model 3 program is on track to start limited vehicle production in July and to steadily ramp production to exceed 5,000 vehicles per week at some point in the fourth quarter and 10,000 vehicles per week at some point in 2018.
- We expect to deliver 47,000 to 50,000 Model S and Model X vehicles combined in the first half of 2017
- This is from the conference call: 54:02 Elon: Yes. I currently think that we should build to 500,000 vehicles next year and 1 million vehicles by 2020. That's 500,000 vehicles in total, Model S, Model 3, and Model X combined next year ... Source
In the future, for the latest info on this issue, you can open THIS page and scroll all the way to the right. If you are a Model 3 reservation holder, check out the Model 3 Delivery Estimator. It integrates this information to the output based on your delivery estimate.
Last edited:
melindav
☰ 2018
if it is that close to the end of a quarter (10 days), I do think they would halt deliveries until the first of the quarter (based on EM's "Do the right thing" quote on working the tax credit last year). If it were mid November no, but mid December, probably (maybe...).
I do like to think I'm an optimist though.
Bokonon
Title-customizing Member
(Speaking as a fellow optimist, also hailing originally from the PDX area...)
Agreed, though I imagine that it wouldn't be so much a "halt" of deliveries as it would be reallocating them to a different region until the end of the quarter. And even if that is not possible, he did say he would be willing to take a quarterly revenue miss in the name of "maximizing customer happiness":
Elon Musk on Twitter
I would expect if the end of a quarter was approaching and it looked like they were going to go over the line before the end of the quarter, they could switch to building cars for Canada. It would put Canadian Model 3 reservation holders over the moon, it would be a relatively short shipment allowing a short production to sales time, and would prevent sale of the 200,000th car until the beginning of the next quarter.
ccutrer
Active Member
The Model 3 Delivery Estimator spreadsheet has me around Dec. 19. If I have delivery already scheduled, then I get a call back "hey we're gonna wait two weeks..." I'm gonna... be disappointed, but understanding. It'll affect my taxes if I get the vehicle in 2018 instead of 2017, but really it's still only a hope to get it in 2017 at all. Here's to hoping as many people can take advantage of the tax credit as possible!
the spreadsheet, if to be believed as it is a lot of work and best effort, has me either March, 2018 IF I take east coast delivery OR December 2017, IF I take California delivery. being retired, We COULD do a "California trip" for a "Shakedown cruise" (either way, eh), (4th transcontinental trip. rest area where I-15 and I-70 join is spectacular)
anticipation is nice
ccutrer
Active Member
You mean Cove Fort area, Utah? Maybe I'm jaded from having driven that hundreds of times, but I always think its weird how it's out in the middle of nowhere, and not much to see.
probably, looks like entire strata completely turned upside down, view from rest area.
(I-68 west of hagerstown Md has a cut thru the mountain with a syncline thru appalachians
cpa
Active Member
Generally, yes, Options. But as I stated, you might have other credits that possibly could reduce line 44 to an amount less than $7,500, depending upon your circumstances. For example, your income tax on line 44 is $7,950. But you have $250 of foreign tax credit and another $1,000 of child tax credit because of your family. This results in (7,950-1,250) or $6,700 available for the BEV credit. Your tax is wiped out, but you left $800 of the BEV credit on the table.
This is why it is so important to get these situations resolved during the year and not wait until February or March to see what is happening with your particular situation. When the calendar turns to January, alea iacta est.
This is why it is so important to get these situations resolved during the year and not wait until February or March to see what is happening with your particular situation. When the calendar turns to January, alea iacta est.
If our incentive in Ontario, Canada is based on submitting an application to the government after financing/leasing and plating, registering and insuring, is it possible to get all these approved without the car being physically present if we have the VIN?
Electric Vehicle Incentive Program (EVIP) Questions and Answers
When can I apply for an incentive?
You can complete the application and submit it (along with all the required documents) after you have completed the purchase or lease and your new vehicle has been plated, registered and insured.
You must submit your application within three months of the date your vehicle was registered and plated.
Electric Vehicle Incentive Program (EVIP) Questions and Answers
When can I apply for an incentive?
You can complete the application and submit it (along with all the required documents) after you have completed the purchase or lease and your new vehicle has been plated, registered and insured.
You must submit your application within three months of the date your vehicle was registered and plated.
On your 1040 look at line 47 that is the amount of tax you owe for the year. Now look at line 55, this is the total of lines 48 through 54, which is the total of all of your tax credits (the EV credit will end up in here when you claim it). As long as 47 is greater than or equal to line 55 you'll get the full credit. If it's less then you'll get less of the credit (since, when you subtract your credits from your taxes owed, you can't go below 0).Is there a line on my 1040 that has the difference after the credits that I can check from this year and last years filings? Sorry, I am not tax savvy and I appreciate your insight
There are things, as has been mentioned in posts above, that you can do to increase your taxes owed but I would suggest you get with a tax professional before trying to manipulate things to get the full credit, since it could end up coming back to bite you if something doesn't work out right.
I'm a retired teacher on the list for a Model 3. My Calif. pension requires that 20% of my pension income is withheld for Fed. tax, which will make it difficult to be "owing" the $7,500. tax credit. Am I understanding this correctly? Is there some other way to "move money around" to make it work? (I have other savings in various mutual funds). Thanks for any info.
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