Tax Credit Ending Dec. 31, 2017 OR.....is it?

[CBPfromTN]

Hello, all.
I ordered my Model S last week and won't likely take delivery before February 1, 2018. I know the federal tax credit of $7,500 is/was supposed to officially end at the end of 2017, but there has been "talk" that it might not end and will possibly be extended. My question is this: Does anyone know WHEN this will be decided or is supposed to be voted on? How will we find out about it? I never hear anything about this subject except among Tesla owners and on this forum, for which I am grateful. Of course, I hope I get it IF it's extended, that's a given and my thinking is that this decision is imminent. Thoughts? Thanks in advance!

 

[jelloslug]

It has been included in the new tax bill.

 

[CBPfromTN]

It has been included in the new tax bill.

Oh! I have been watching the news on the tax bill but wasn't sure how this would be affected. That is great news, thank you. I will be watching to see if it makes it to the President's desk to sign today. I think it's hopeful he will be able to sign it today but then I heard others say that it might not be before the first of the year <sigh> Thank you for letting me know that it is part of this tax bill. I know very little about what all is included in it so that's good info. Thx!

 

[CBPfromTN]

Looks like the tax bill has passed and will be signed by the President today. I'll still be glad when the tax credit being extended etc. is announced so that I can really know I can count on it. Thx again!

 

[Cyclone]

Looks like the tax bill has passed and will be signed by the President today. I'll still be glad when the tax credit being extended etc. is announced so that I can really know I can count on it. Thx again!

It should be noted that the tax bill currently awaiting Presidential signing is not extending the tax credit -- it simply has no provision for repealing the credit. The original House Bill had a provision to repeal the credit that wasn't in the Senate Bill nor the combined bill under approval.

 

[CBPfromTN]

It should be noted that the tax bill currently awaiting Presidential signing is not extending the tax credit -- it simply has no provision for repealing the credit. The original House Bill had a provision to repeal the credit that wasn't in the Senate Bill nor the combined bill under approval.

I do recall that, too. I understand what you're saying. So, how do we know what's going to happen with that? Who is going to tell everyone that this tax credit was not repealed and is still continuing?
Actually, it doesn't matter because at the end of the day, I am still getting my Tesla, however, it would be nice to know what this "non-repeal" of the tax credit means for people in 2018. Ugh.
Thank you for the information.

 

[Cyclone]

I do recall that, too. I understand what you're saying. So, how do we know what's going to happen with that? Who is going to tell everyone that this tax credit was not repealed and is still continuing?
Actually, it doesn't matter because at the end of the day, I am still getting my Tesla, however, it would be nice to know what this "non-repeal" of the tax credit means for people in 2018. Ugh.
Thank you for the information.

It means there is no change in the end. You will get the credit (assuming you qualify) since no terms have changed and Teslas are still eligible. Barring any new laws, the credit will likely be in full force until Sept 2018 or so and then taper down over another year.

 

[CBPfromTN]

It means there is no change in the end. You will get the credit (assuming you qualify) since no terms have changed and Teslas are still eligible. Barring any new laws, the credit will likely be in full force until Sept 2018 or so and then taper down over another year.

Qualify? Oh man......What are the "requirements" to qualify?

 

[McRat]

Qualify? Oh man......What are the "requirements" to qualify?

You must pay in $7500 or more into your fed taxes to get the full credit. If you only pay in $5000, you can only collect $5000 and there is no carry-over.

 

[CBPfromTN]

You must pay in $7500 or more into your fed taxes to get the full credit. If you only pay in $5000, you can only collect $5000 and there is no carry-over.

Oh, ok! Phew. We are hammered, absolutely hammered with taxes. At least here in TN, we have no state income tax but we do have what is called the "hall tax" which is on dividends, which we can also write off but have to pay to the state. Thank you for your explanation, I appreciate that and I am kinda excited about that. At first, I did not understand it (I still don't really understand it,) but at first I thought it was just a deduction of $7500 off of your taxes paid, but now I have been told that you actually get $7500. How exactly does it work? I have no clue what to expect. Thank you for your information. I really appreciate it.

 

[Cyclone]

Qualify? Oh man......What are the "requirements" to qualify?

The credit isn't refundable, thus you must have sufficient federal tax liability to get the full credit as it is non-refundable (if your total fed tax due for the year is less than $7,500, you only zero out your liability vs. getting the whole $7,500). You must buy the car, not lease (the leasing company gets the credit vs. you in that case). Stuff like that.

 

[DriveMe]

The credit isn't refundable, thus you must have sufficient federal tax liability to get the full credit as it is non-refundable (if your total fed tax due for the year is less than $7,500, you only zero out your liability vs. getting the whole $7,500).

Not sure what you mean by "credit isn't refundable". Say your total tax liability for the year is $10,000 and you already paid $10,000 (deducted from the paychecks). You don't owe anything beyond what you already paid when you file your tax return, but you can still claim the tax credit and get a tax refund up to the full $7,500 amount, the way I understand it.

 

[TexLaw]

Say your total tax liability for the year is $10,000 and you already paid $10,000 (deducted from the paychecks). You don't owe anything beyond what you already paid when you file your tax return, but you can still claim the tax credit and get a tax refund up to the full $7,500 amount, the way I understand it.

You are correct about that. "Non-refundable" is the term, but it just means that the credit will not reduce your tax liability below $0 (as opposed to a "refundable" credit that can reduce your tax liability below $0).

 

[DriveMe]

That’s what I thought. Thanks!

By the way, does anyone know, what kind of paperwork is needed for the tax credit? Is Tesla going to mail us any forms or supporting documentation, confirming the credit eligibility? Thanks!

 

[ItsNotAboutTheMoney]

That’s what I thought. Thanks!

By the way, does anyone know, what kind of paperwork is needed for the tax credit? Is Tesla going to mail us any forms or supporting documentation, confirming the credit eligibility? Thanks!

You shouldn't need anything from Tesla*
You file form 8936 giving the VIN and Purchase Date. (Also suggested to do the AMT worksheet even if not subject to it. Even though the credit is allowed for people subject to AMT, in past years some people had a little difficulty with the IRS not liking it when it was missing due to the rules under a prior tax credit. I don't know if it's still a problem)

* There is a certification they can give saying that the vehicle qualifies, but we know that it does.

 

[d21mike]

That’s what I thought. Thanks!

By the way, does anyone know, what kind of paperwork is needed for the tax credit? Is Tesla going to mail us any forms or supporting documentation, confirming the credit eligibility? Thanks!

Do you do your own taxes or do you have someone who does them? My CPA (for my company) does my personal taxes as well. I told her about it and she said no problem will add it. I probably sent her the same sheet I sent to the Insurance company which included the VIN etc.

 

[DriveMe]

I haven't talked to my tax preparer yet. So, basically just the VIN number and the purchase date is all I need, right?

 

[d21mike]

I haven't talked to my tax preparer yet. So, basically just the VIN number and the purchase date is all I need, right?

I actually did not ask her but I think that is what she needed. My sales document has that information.

 

[d21mike]

I haven't talked to my tax preparer yet. So, basically just the VIN number and the purchase date is all I need, right?

The $7500 is a FED TAX CREDIT. California also has a State Credit if you make less then a certain amount of money. You want to see what options OHIO has since you appear to be from there.

 

[DriveMe]

No State incentives in Ohio...