BluestarE3
Active Member
Or refer people to the appropriate tax form and instructions... they're not that difficult to understand/follow and they explain precisely how this tax credit thing works.
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Tax Credit Clarification
- Thread starter SmarterMotors
- Start date
SageBrush
REJECT Fascism
Apologies folks, I have to correct an error from post #96. The taxable income is Line 43, not line 63. Says so, right on the form ;-)
Keep in mind that I am not a CPA, the number we are interested in is ~ line 43 of the Form 1040 when it comes time to apply the (maybe available) $7500 Federal EV tax credit.
So starting from line 43, and let's say the available EV credit is 'Z,' then:
Line 43 is 0: No EV credit is received
Line 43 > Z: Z is received
0 < Line 43 < Z: The amount in Line 43 is received
View attachment 171184
Keep in mind that I am not a CPA, the number we are interested in is ~ line 43 of the Form 1040 when it comes time to apply the (maybe available) $7500 Federal EV tax credit.
So starting from line 43, and let's say the available EV credit is 'Z,' then:
Line 43 is 0: No EV credit is received
Line 43 > Z: Z is received
0 < Line 43 < Z: The amount in Line 43 is received
View attachment 171184
BluestarE3
Active Member
MiamiNole
Member
Think I know the answer to this question, but haven't been able to find a definite answer in writing. Are you eligible for the EV credit if you are married filing separately?
BluestarE3
Active Member
Your filing status doesn't alter your eligibility per se. As to whether you will qualify for any, some or all of any available credit in a particular year, refer to posts 262 and 263 above.
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cpa
Active Member
The total amount of the plug-in vehicle credit is also tweaked by certain credits that are ranked above it on page two of the 1040. For example the foreign tax credit and child care credit are used first to reduce your tax. A taxpayer may have $8,200 in tax liability on line 43, but have $100 in foreign tax credits and $1,500 in child care credits thus reducing the available amount for the plug-in vehicle credit to $6,600. I think the child tax credit for those of you who have minor children also figures into the mix. (I am so old and none of my clients have dependents, so I mostly ignore this one.)
Here is the thing: Bartenders, hair dressers, my wife's cousin's neighbor, and Tesla sales people are likely very good at their chosen occupations. However, their expertise in arcane matters like income taxation is probably not their strong suit. Terminology gets twisted, confused and misapplied. It is so easy--especially now in the shank of the summer--to get a referral to a capable tax practitioner and have this person review your 2015 return to explain how the $7,500 credit will benefit you for your particular situation. A person-to-person meeting with questions and answers is much more meaningful and educational that page upon page of internet comments and discussions and corrections and whatever else. It probably would not be more than 30 minutes of meeting time.
Here is the thing: Bartenders, hair dressers, my wife's cousin's neighbor, and Tesla sales people are likely very good at their chosen occupations. However, their expertise in arcane matters like income taxation is probably not their strong suit. Terminology gets twisted, confused and misapplied. It is so easy--especially now in the shank of the summer--to get a referral to a capable tax practitioner and have this person review your 2015 return to explain how the $7,500 credit will benefit you for your particular situation. A person-to-person meeting with questions and answers is much more meaningful and educational that page upon page of internet comments and discussions and corrections and whatever else. It probably would not be more than 30 minutes of meeting time.
SageBrush
REJECT Fascism
I'm in Colorado, where the state EV incentive has been amended to now give a refundable tax credit of $5000 to buyers and $2500 to leases. My tax liability is too low to gain the $7500 federal tax credit unless I lease. So at first blush I cannot maximize both state and federal tax credits, but I wondered if I can lease the car and then buy it shortly thereafter to game the system.
Opinions ?
Opinions ?
SageBrush
REJECT Fascism
The people with crazy complicated returns are already extremely versed or employ a CPA. For everybody else:
Form 1040 (before EV)
Line 44 - Line 55 > $7500 ? Max tax credit !
Line 44 - Line 55 < $7500? The result is max EV credit
One would have to double check that none of the Line 55 credits are refundable. Any amounts that are will be added to the max credit, up to $7500.
cpa
Active Member
SageBrush,
Refundable credits are only presented on form 1040 in the "payments" section, lines 64 to 73. That is why they are considered refundable. None of the credits on lines 48 to 54 are refundable. None. Some may be carried forward to future years, but they are not refundable for the current tax year.
And, I have been around long enough to have seen many people with crazy complicated returns that are self-prepared. And they are not extremely well-versed.
travwill
Active Member
Posted this on another thread for MX:
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Yeah, seems like Tesla will hit the 200,000 vehicle phase out next year in 2017. We are around roughly VIN 160,000 on Model S already or more, and 15 to 20,000 on Model X. Roadsters were say 1-2000 right? That totals very roughly around 180-190,000 total electric Tesla's (all models) on the road. Conservatively say that is what is delivered this year.
If Tesla hits 200,000 even in Q1 2017 which seems likely at latest, then the 1 year (4 quarter phase out begins). It seems those first two quarters of 2017 Q1 and Q2 if purchased (delivered with Tesla to owner) the owner get 50% of the, Q3 25%, and then done in Q4.
Thus:
Q1 2017 & Q2 2017 DELIVERIES will be eligible for $3,750 tax credit
Q3 2017 DELIVERIES eligible for $1,875 tax credit
Q4 2017 DELIVERIES eligible for $0 tax credit.
Kinda means that an order has to be in soon perhaps to beat the 200K mark. I wouldn't expect any Model 3s to be eligible for a tax credit obviously.
Seem right?
----
Yeah, seems like Tesla will hit the 200,000 vehicle phase out next year in 2017. We are around roughly VIN 160,000 on Model S already or more, and 15 to 20,000 on Model X. Roadsters were say 1-2000 right? That totals very roughly around 180-190,000 total electric Tesla's (all models) on the road. Conservatively say that is what is delivered this year.
If Tesla hits 200,000 even in Q1 2017 which seems likely at latest, then the 1 year (4 quarter phase out begins). It seems those first two quarters of 2017 Q1 and Q2 if purchased (delivered with Tesla to owner) the owner get 50% of the, Q3 25%, and then done in Q4.
Thus:
Q1 2017 & Q2 2017 DELIVERIES will be eligible for $3,750 tax credit
Q3 2017 DELIVERIES eligible for $1,875 tax credit
Q4 2017 DELIVERIES eligible for $0 tax credit.
Kinda means that an order has to be in soon perhaps to beat the 200K mark. I wouldn't expect any Model 3s to be eligible for a tax credit obviously.
Seem right?
SageBrush
REJECT Fascism
dgpcolorado
high altitude member
They do, which is why VINs don't serve as a useful proxy for US tax credit eligible sales. Others have posted the most recent numbers that Tesla has to file with the IRS and, of course, it isn't remotely like 160k.
travwill
Active Member
Ah yes, your right, USA only! So that is good news for all of 2017 for sure. The IRS reads:
The new qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States.
So it really depends on what 2017 looks like for MS/MX in full for Model 3 in 2018. Cool.
The new qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States.
So it really depends on what 2017 looks like for MS/MX in full for Model 3 in 2018. Cool.
Where are they finding that info? I've looked and, if it's on the IRS site somewhere, it is very wel hidden. I think the general consensus is that they'll hit it Q4 of 2017, assuming they ramp up anywhere near where they expect to.
Currently Tesla is around 70-80K. They would have to sell 120K cars in the US, which translates to 240K (roughly 1/2 of their cars are sold in the US) between now and 4th quarter 2017. There is no way that's going to happen.
They will likely hit the 200K domestic sales mark sometime in 2018 depending on how fast the Model 3 ramp is.
They will likely hit the 200K domestic sales mark sometime in 2018 depending on how fast the Model 3 ramp is.
dgpcolorado
high altitude member
I couldn't find it either and I looked pretty hard. I don't really know how to zero in on the posts where TMC members have listed the numbers in the past.
I think a lot of people read posts that others have posted as speculation, quote it without mentioned the speculation part, and it just gets perpetuated from there. Like the one where Elon supposedly said that they would not be basing delivery on number/cost of options. I think a lot of people have heard it and would like to believe it so it takes on its own life. Gotta love the internet
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