US$7500 tax rebate on new electric/alternative vehicle purchases

[Mphmd]

If I buy a 2012 Model S and take delivery in January of 2013,pay in full and trade it in in July for a p85 performance plus in july of 2013 would I qaulify for a second federal tax rebate?

 

[ChadS]

Hmm. Regulations say you aren't supposed to "plan" to resell it when you buy it, but don't list a timeframe or say how they determine your intent. You should get it on the second car, but might not on the first car if they figure your ownership time is too short and think you are gaming the system. They are not clear on this. I would check with a pro on this one.

 

[lloyds]

From my understanding, the tax incentive qualifies for the year the docs are signed. Can't rollback as I was told by my CPA.

 

[CHGolferJim]

An article was just published at InsideEV on a clever way to advance the tax credit cash flow into the current year by reducing withholding. I've asked my accountant whether this could also be done through reduced quarterly estimated tax payments, and wil report back.

 

[JohnQ]

An article was just published at InsideEV on a clever way to advance the tax credit cash flow into the current year by reducing withholding. I've asked my accountant whether this could also be done through reduced quarterly estimated tax payments, and wil report back.

Sure, there is. Your quarterly withholding is an estimate. As long as you estimate correctly (including the EV credit) then it's perfectly legal. As long as you don't owe too much at the end of the year (I'm sure there's a threshold that triggers additional scrutiny) then it's a non-issue.

 

[ChadS]

You just have to make sure you will GET the tax credit. If you earn too little (say, retired) or have too high of an investment-to-earned-income ratio you might not be eligible. There are probably other scenarios; the tax code is pretty darn complex. I missed mine one year even though I thought I had enough income because of a capital loss carryover. If you aren't eligible for the tax credit but you dropped your estimated payments, then you might also owe a penalty for underpayment.

 

[miimura]

I am not a tax accountant, but I believe that if you routinely pay estimated tax, that you have to pay at least as much tax as you owed the prior year. Tax credits like the EV tax credit or the solar tax credit are extra-ordinary events and you could be penalized for not paying enough estimated tax. However, I think the penalty is small. If the cash flow is more important to you, then ask your accountant how much the penalty is for under paying Estimated Tax based on the prior year rule, but still meeting the current year's tax due.

 

[FlasherZ]

I am not a tax accountant, but I believe that if you routinely pay estimated tax, that you have to pay at least as much tax as you owed the prior year. Tax credits like the EV tax credit or the solar tax credit are extra-ordinary events and you could be penalized for not paying enough estimated tax. However, I think the penalty is small. If the cash flow is more important to you, then ask your accountant how much the penalty is for under paying Estimated Tax based on the prior year rule, but still meeting the current year's tax due.

To avoid withholding penalty/interest, you must withhold the lesser of 90% of this year's tax or 100% of last year's tax by the end of the year, or pay estimated quarterly tax.

 

[EarlyAdopter]

To avoid withholding penalty/interest, you must withhold the lesser of 90% of this year's tax or 100% of last year's tax by the end of the year, or pay estimated quarterly tax.

110% of last year's tax if your AGI is over $150,000.