Anyone else disappointed they won't get the full $7,500k? My taxable pay is only 71k, wife is a full time student, yet I only got about $400 out of the $7500. Was really looking forward to putting it all towards my car loan.Feel like this tax credit was a "gotcha " knowing that most Americans don't understand taxes (not blaming anyone but my lack of knowledge)
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
-
On today's TMC Podcast, we ask the question "What is the Tesla Cybercab?". Join us on YouTube live at 1PM and participate in the chat.
Tax credit 2024 [The tax credit discussion thread]
- Thread starter vickh
- Start date
Sounds like you need to talk to your tax person, as you should likely qualify for the full $7,500. (Now if you had underpaid taxes because of things like capital gains, etc. you might not get any of it actually sent to you.)
Getting the credit is contingent on having enough tax liability due to offset the full $7500. I think that only applies for 2023 purchases, not the 2024 point of sale credit. If your income is $71K then your tax liability is only $4756, so you could collect $4756 of the $7500. The government isn’t going to give a refund of more than you owed in taxes. If your income was double your taxes due would be $15,761 in the 22% tax bracket and you could collect the full $7500 on two cars.
Fortunately or unfortunately my federal tax due for 2023 is more than the MYLR cost after incentives. F the progressive tax system.
If you buy the car in 2024, you get the full $7,500 up front regardless of tax liability. 2023 purchase - old rule - you're out of luck.
ven7782
Member
Its not the taxable pay but the Adjusted Gross income. Is your AGI < 150K for individual or 300K for married? Also did you pay more than 7500 in federal taxes last year? If the answer is Yes, you should get the full 7500. Tax expert cannot help here. Turbotax is usually correct.
ven7782
Member
That is not true. You will have to pay back later when you do your taxes for 2024 if your tax liability is less than 7500. If you are above the income limit in 2023 then there is no upfront payment whatsoever in 2024 at the point of sale.
ven7782
Member
Take a look at EV Tax Credit 2024: How It Works, What Qualifies - NerdWallet
Per the IRS, you can use your MAGI from either the year the car is delivered, or the year before delivery
What am I wrong about?
Don't quote me, but I think you can continue deferring the $3k capital loss deduction to a future tax year and use $3k more of the Clean Vehicle Credit.
Exactly. You can use your 2024 MAGI to qualify for the 2024 POS credit. Which you said you couldn't. And as long as you meet the MAGI, 2023 or 2024, you get the full 2024 POS credit, and don't have to repay any of it, even if your tax liability for the year is $0.
Point of sale has no clawback based on tax liability, only income threshold.
You can take point of sale based on your expectation of 2024 income being below the limit.
ven7782
Member
True about no paying back if tax liability for the year is less than 7500. However if the 2024 MAGI is over the limit and if you claim the credit, that has to be paid back later with interest I suppose.
ucmndd
Well-Known Member
If buying used 2022 EV that qualifies for the $4000 EV tax credit, is there any way to receive this credit if dealer refuses to file paperwork. (Idiots)....LOL....
Second question, I have seen some car buying service that claims they can help you buy EV from private owners , and still receive the tax credit, has anyone used that service? And can you share your experience, how it worked. Thank you
Second question, I have seen some car buying service that claims they can help you buy EV from private owners , and still receive the tax credit, has anyone used that service? And can you share your experience, how it worked. Thank you
Unlikely. I think part of the problem is that the dealer would have to know the vehicle's sales history and if it had been sold to someone else before they got it:
- Not have already been transferred after August 16, 2022, to a qualified buyer.
Personally, I think the rules are way too complex and stupid. They should be really simple: One used credit per VIN, purchase not for resale, sale has to be at market value. (You can't sell your used EV to family/friends just to get the credit.) Then the IRS could have a site where you can lookup if a VIN has already had the credit claimed against it.
ucmndd
Well-Known Member
I used KeySavvy for this purpose when I sold my Model S last year. The experience was fantastic, would highly recommend. Don’t know for certain that the buyer successfully claimed the $4k credit but it was an important part of the transaction to them and I would assume I’d have heard about it if they didn’t.
Ok.. Can anyone who purchased used in 2024 and got the $4000 credit applied to the dealer at sale clarify the state tax owed? I have two quotes from two different out of state dealers, one of them insists that I need to pay tax only on the price POST federal tax credit, if I ask Bing Chat GPT4 in a very explicit way that AI search agrees that the new owner only pays state tax on the actual out the door price AFTER the $4000 tax credit is applied. That is really my "price" and the government tax credit "reduces" that selling price for state tax purposes.
A second dealer in the same state south of me insists that no.. I must pay state tax on the full purchase price ($25k in my case).
The difference is only $240 (6% of $4000) but hey.. I would like to save every penny I can as long as I am not breaking any tax laws. And when paying taxes less is better than more.
Can anyone share how they paid state tax? Full Price BEFORE tax rebate, or Price minus the rebate.
I read the IRS factoids/FAQs, and of course this specific question is not covered.
A second dealer in the same state south of me insists that no.. I must pay state tax on the full purchase price ($25k in my case).
The difference is only $240 (6% of $4000) but hey.. I would like to save every penny I can as long as I am not breaking any tax laws. And when paying taxes less is better than more.
Can anyone share how they paid state tax? Full Price BEFORE tax rebate, or Price minus the rebate.
I read the IRS factoids/FAQs, and of course this specific question is not covered.
In MA I paid tax on the price of the car before state and federal incentives. Think about it this way, in 2023 the incentives would’ve been collected after the fact and full sales tax on the transaction would’ve been collected at time of purchase.
I understand, but in 2024, they significantly changed the rules/law to allow/encourage you to "transfer" your EV credit to the dealer at purchase. I would argue that an up front EV payment credit is quite different from an after the fact rebate of full purchase price.....
.Once you agree to execute that $4000 to dealer "transfer" the dealer has "sold" part of car to the government, and I pay, whatever is left over. Government doesn't charge tax on other cash benefits... but again.. who really knows...
Does anyone pay state tax on the $7500 cash they get back from the Feds as "income" , when they receive the tax credit check?
It is an "after the fact" rebate on the selling price, when that rebate moves to the "time of purchase" it is quite different, but of course we shall see.
I would also not be surprised if different states interpret it differently... THANK YOU for your reply.. I will contact some of the local "expert" notaries.... Note also that the dealer south of me was selling lots and lots of used Tesla's and described a long learning curve with back and forth, and he specifically insisted that 'my state" PA, applied sales tax on the price AFTER the rebate, and that dealer was completing 100% of the state registration for PA buyers coming down to VA to purchase....while the other dealer is a used EV rookie, who has only sold about 8 used EV's that had the tax credit applied.
My current solution is to buy the car, and not allow the dealer to collect the state tax, and work with local notaries who have state contacts to clarify what "price" is the sales price for state taxes.
Thanks again for your reply.. I will update what I learn one way or the other.
