So partly opposite. I was lump replying to thetwo quoted posts. You stated "later realize you didn't qualify for some/all of it:" , "some" only applies in the insufficient tax burden situation, excess income hits "all".Not sure why you say it's the opposite when the bit I quoted specifically cites the income cap as the one that causes recapture.
Some folks here previously thought all requirements go away with POS-- that one does not and they will claw back if you're in violation of it.
THAT said- the other violation you bring up, which effectively makes this a refundable credit for those with LOWER income, IS surprising and a pretty huge bit of news if the final rules end up that way (the text you quote being proposed, but not final). It's especially great news for folks in places like CA that have low-income credits where the overlap to get both was narrow-- it's much larger now if this sticks.
Income limit is lesser of previous or current year, so that helps a lot.
(e) Federal income tax consequences of the vehicle transfer election—(1) Treatment of electing taxpayer. In the case of a vehicle transfer election, the Federal income tax consequences for the electing taxpayer are as follows--
(i) The amount of the section 25E credit that the electing taxpayer elects to transfer to the eligible entity under section 30D(g) (by reason of section 25E(f)) and paragraph (d) of this section may exceed the electing taxpayer’s regular tax liability (as defined in section 26(b)(1) of the Code) for the taxable year in which the sale occurs, and the excess, if any, is not subject to recapture.