Cyclone
Cyclonic Member ((.oO))
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.
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).
Exactly. Think of it as two transactions, buying the car and paying for it -- whoops, incurring tax liability and paying for it . The EV Credit is non-refundable on incurring tax liability (meaning your total tax due cannot go below $0 where the Fed owes you). You then apply that liability against what you've paid for your annual tax refund/balance due.