Tax Forum 8936

[Catung]

Hello,

I just wanted to reach out to verify I understand the wording of the tax forum. Reading the instruction for number 4, in my opinion, it is a little confusing. I purchased the model 3 between January 1, 2019 - July 31, 2019. For the following:

4a = $7,500
4b = 50%
4c = $3,750

I was wondering if this information would be correct. Reading the instruction, it mentions the model, year and make of the vehicle regarding the credit account. I understand Tesla's are able to obtain the full $7,500. Someone please let me know if this information is correct.

Thanks!

 

[user212_nr]

Hello,

I just wanted to reach out to verify I understand the wording of the tax forum. Reading the instruction for number 4, in my opinion, it is a little confusing. I purchased the model 3 between January 1, 2019 - July 31, 2019. For the following:

4a = $7,500
4b = 50%
4c = $3,750

I was wondering if this information would be correct. Reading the instruction, it mentions the model, year and make of the vehicle regarding the credit account. I understand Tesla's are able to obtain the full $7,500. Someone please let me know if this information is correct.

Thanks!

I'm not an accountant, but reading the info it looks good. You claim the full credit on 4a and then it gets reduced on 4b to the $3,750 number you are expecting. You wouldn't enter $3,750 on 4a and then divide it again. Their instructions look a little unclear on that, but its obvious from context.

"For vehicles acquired after 12/31/2009, the credit is equal to $2,500 plus, for a vehicle which draws propulsion energy from a battery with at least 5 kilowatt hours of capacity, $417, plus an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours. The total amount of the credit allowed for a vehicle is limited to $7,500."

That number for Tesla is $33,000 so it maxes out at $7500.

 

[Lunares]

Hello,

I just wanted to reach out to verify I understand the wording of the tax forum. Reading the instruction for number 4, in my opinion, it is a little confusing. I purchased the model 3 between January 1, 2019 - July 31, 2019. For the following:

4a = $7,500
4b = 50%
4c = $3,750

I was wondering if this information would be correct. Reading the instruction, it mentions the model, year and make of the vehicle regarding the credit account. I understand Tesla's are able to obtain the full $7,500. Someone please let me know if this information is correct.

Thanks!

Tesla is unable to claim the full $7500 in 2019 because they passed 200k units sold in 2018. That's why 4b is 50% and claimed credit in 4c is $3750

 

[Catung]

Tesla is unable to claim the full $7500 in 2019 because they passed 200k units sold in 2018. That's why 4b is 50% and claimed credit in 4c is $3750

So the information I entered is correct? 4a is just confusing to me. Does 4a ask for the amount the car is eligible for? In this case Tesla is well over $7,500 so it's eligible for it but I'm only able to claim 50%(4b) $3,750 (4c)

 

[Lunares]

So the information I entered is correct? 4a is just confusing to me. Does 4a ask for the amount the car is eligible for? In this case Tesla is well over $7,500 so it's eligible for it but I'm only able to claim 50%(4b) $3,750 (4c)

Correct. 4a is the amount the car would be eligible for ($7500). 4b is the discount due to phaseout (50% if you purchased jan 1 2019 thru jun 30th 2019, 25% after that)

 

[user212_nr]

So the information I entered is correct? 4a is just confusing to me. Does 4a ask for the amount the car is eligible for? In this case Tesla is well over $7,500 so it's eligible for it but I'm only able to claim 50%(4b) $3,750 (4c)

4a is the amount of the credit before the phaseout, which is then divided by 2 in 4b, to get the credit for your car in 4c.

It is confusing because they don't clearly say "before the phase out". They don't say "before the phase out" because you are at 4a, and the phase out doesn't happen until 4b. Accountants probably understand such things easily.

 

[gcmak]

I did mine on TurboTax and it was confusing what they displayed to me but as I understand it, your inputs on the form are correct. TurboTax also shows the full 7,500 but what I actually see for my purchase after July 1, 2019 is 1,875.

If I modify the first field (your 4a) to 1,875, my refund drops significantly and is incorrect. TurboTax doesn't show me your 4b - which would have been helpful.

 

[BikerPeaBody]

I did mine on TurboTax and it was confusing what they displayed to me but as I understand it, your inputs on the form are correct. TurboTax also shows the full 7,500 but what I actually see for my purchase after July 1, 2019 is 1,875.

If I modify the first field (your 4a) to 1,875, my refund drops significantly and is incorrect. TurboTax doesn't show me your 4b - which would have been helpful.

I used turbo tax and it doesn't have the 4a/b etc. Mine said $7500, then had 3750 in the box. but the message below said to change it if its wasn't correct. I put in 1,875, as I bought after july 1.

why don't you just put in the correct amount? refund def should not drop when entering this

 

[jkdman123]

I used turbo tax and it doesn't have the 4a/b etc. Mine said $7500, then had 3750 in the box. but the message below said to change it if its wasn't correct. I put in 1,875, as I bought after july 1.

why don't you just put in the correct amount? refund def should not drop when entering this

That’s just not how it works. They’re mirroring the IRS form which starts with the $7500 max, then is reduced by a certain percentage based on model and purchase date. So when you get to the TT form for electric vehicle, you put in model, VIN, purchase date, and $7500. It will apply the correct phase out percentage. I know it’s confusing and doesn’t need to be, but the IRS was late getting the 2019 form out and then TT had to code it into their program.

 

[BikerPeaBody]

That’s just not how it works. They’re mirroring the IRS form which starts with the $7500 max, then is reduced by a certain percentage based on model and purchase date. So when you get to the TT form for electric vehicle, you put in model, VIN, purchase date, and $7500. It will apply the correct phase out percentage. I know it’s confusing and doesn’t need to be, but the IRS was late getting the 2019 form out and then TT had to code it into their program.

I mean I haven't submitted my taxes yet, but I put this info in the form last week. Turbotax wasn't updated then? But what you're saying is, even if I put the correct amount it should be, which is $1875 for after July 1, I'm still wrong? please explain

 

[jrweiss98020]

I use the H&R Block tax program. It processes the form correctly. I filed yesterday, and it was accepted immediately with the 8936 form.

 

[jkdman123]

I mean I haven't submitted my taxes yet, but I put this info in the form last week. Turbotax wasn't updated then? But what you're saying is, even if I put the correct amount it should be, which is $1875 for after July 1, I'm still wrong? please explain

It’s not *you* who should put in the correct amount. You need to let the program calculate the correct amount. You do this by putting in the maximum credit possible which is $7500. Based on your manufacturer and purchase date, the program calculates the correct deduction.

 

[jkdman123]

Attached is a screen shot of an example of last year’s form.

Line 4a is the max credit for a Model 3; $7500.
Line 4b is the phase out percentage. For 2019, this will be 50% if you purchased between Jan 1 and Jun 30(?). It will be 25% between Jul 1 and Dec 31.
Line 4c is the actual deduction you can take based on which phase out percentage you’re eligible for.

So on TT’s data entry screen for this form you simply put your VIN, purchase date and it should default to $7500 for the max credit. It then calculates line 4c for you.

 

[Catung]

I used turbo tax and it doesn't have the 4a/b etc. Mine said $7500, then had 3750 in the box. but the message below said to change it if its wasn't correct. I put in 1,875, as I bought after july 1.

why don't you just put in the correct amount? refund def should not drop when entering this

I'm not using turbo tax currently. Doing it manu

Attached is a screen shot of an example of last year’s form.

Line 4a is the max credit for a Model 3; $7500.
Line 4b is the phase out percentage. For 2019, this will be 50% if you purchased between Jan 1 and Jun 30(?). It will be 25% between Jul 1 and Dec 31.
Line 4c is the actual deduction you can take based on which phase out percentage you’re eligible for.

So on TT’s data entry screen for this form you simply put your VIN, purchase date and it should default to $7500 for the max credit. It then calculates line 4c for you.

Thank you. This is what i thought is correct. Currently having a disagreement with my accountant on 4a. They believe it should be:

4a. $3750
4b. 50%

 

[jkdman123]

I'm not using turbo tax currently. Doing it manu



Thank you. This is what i thought is correct. Currently having a disagreement with my accountant on 4a. They believe it should be:

4a. $3750
4b. 50%

Show your accountant this screen shot. It’s from the IRS website and is linked from the instructions for calculating like 4a.

 

[Catung]

View attachment 517498
Show your accountant this screen shot. It’s from the IRS website and is linked from the instructions for calculating like 4a.

They have provided me this documentation and explained i purchased the vehicle in 5/2019 so I'm only getting $3750. The doc explains before 2019 is 7500? Can you briefly explain for me please lol

 

[jkdman123]

Yes. You’re only getting $3750, like me. I also purchased in May of 2019. The $7500 full credit for Tesla ended on Dec 31, 2018. The phase out started on Jan 1, 2019 and went to 50% ($3750). That lasted until Jun 30, I believe, at which time The phase out percentage went down to 25% ($1875). The credit ended altogether on Dec 31, 2019.

 

[BikerPeaBody]

Attached is a screen shot of an example of last year’s form.

Line 4a is the max credit for a Model 3; $7500.
Line 4b is the phase out percentage. For 2019, this will be 50% if you purchased between Jan 1 and Jun 30(?). It will be 25% between Jul 1 and Dec 31.
Line 4c is the actual deduction you can take based on which phase out percentage you’re eligible for.

So on TT’s data entry screen for this form you simply put your VIN, purchase date and it should default to $7500 for the max credit. It then calculates line 4c for you.

but when I manually put in $1875, it says my credit is $1875. Me typing it in effectively puts it on line 4c. So what's the differnence ofthe program putting it there or me putting it there? So in the pic below, it says I'm gettin 1875 credit. How is this wrong???

the bottom line is I'm not taking 7500 or 3500. so again, how is this wrong?

 

[jkdman123]

but when I manually put in $1875, it says my credit is $1875. Me typing it in effectively puts it on line 4c. So what's the differnence ofthe program putting it there or me putting it there? So in the pic below, it says I'm gettin 1875 credit. How is this wrong???View attachment 517757

the bottom line is I'm not taking 7500 or 3500. so again, how is this wrong?

They may have changed the program. I filed last week and at that time you had to put the full $7500 credit in the box and let the program calculate the actual credit.