Tax credit 2024 [The tax credit discussion thread]

[ucmndd]

The point of sale tax credit is applied AFTER sales tax calculation. It does not change the transaction price of the car.

Think of it as a down payment.

Your state doesn’t care if someone else is helping you pay for a car, be it your Uncle Charlie or your Uncle Sam. They’re gonna get theirs.

 

[patmurphey]

...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.

Have you ever owned a business? I doubt that there is a sales tax state in the country that gives business the option of not collecting and paying sales tax. If they don't collect it, they will have to pay it from their own funds.

 

[Maybe_buyer]

I just spoke to tesla in Philadelphia. After some research he came back to me and explained that the sales tax is applied on the price

After the $4000 tax credit is applied.

So I now have a very large car dealer in VA and the tesla dealership in Philadelphia agreeing that if I'm not paying $25000 I am not on the hook for state sales tax on the full amount.

The tesla rep said the used car team would send me documents that confirm this is how the tax situation should work in 2024 with the changes made whereby dealers get free money directly from the government.

I will share/upload same once I receive it.

To new tesla buyer's are you paying state sales tax on the full purchase amount?

Just curious.

Not sure why folks here are so snarky in their replies all I'm trying to do is understand what the rules are and learn and share.

And no I'm not trying to cheat on my taxes owed.

So if you want to slam me for investigating and sharing please move along.

 

[SirWolf]

I just spoke to tesla in Philadelphia. After some research he came back to me and explained that the sales tax is applied on the price

After the $4000 tax credit is applied.

So I now have a very large car dealer in VA and the tesla dealership in Philadelphia agreeing that if I'm not paying $25000 I am not on the hook for state sales tax on the full amount.

The tesla rep said the used car team would send me documents that confirm this is how the tax situation should work in 2024 with the changes made whereby dealers get free money directly from the government.

I will share/upload same once I receive it.

To new tesla buyer's are you paying state sales tax on the full purchase amount?

Just curious.

Not sure why folks here are so snarky in their replies all I'm trying to do is understand what the rules are and learn and share.

And no I'm not trying to cheat on my taxes owed.

So if you want to slam me for investigating and sharing please move along.

The price including destination fee and order fee for my 2021 MYLR was $61,190.- Sales Tax was additional 6% collected on the day of delivery. My tax advisor included the Tax Credit in the 2021 tax return. The Sales Tax didn’t changed and I didn’t got a refund for part of the Sales Tax. It’s a convenience and financial benefit to have the Tax Credit applied at point of sale through the dealer (Tesla) but that doesn’t change or effect the sales price of the car.. MSRP is $53,999 for the 2024 MYLR with options. I would pay $7,500 less after Tax Credit has been applied but the price for the car remains the same. Sales Tax is due on the sales price.. in my humble opinion. The Tax Credit is not kind of additional discount and is a separate calculation/incentive besides the transaction of buying the car. (Disclaimer: I am not a tax expert and this is not legal advise).

 

[patmurphey]

The tax credit is a payment to the buyer that the buyer is essentially using as a down payment. Therefore, it would not normally affect the state taxable amount. In a lease the opposite applies, the payment is to the leasing company and the leasing company is optionally using it to offer a discount and therefore a lower "sale price" used to calculate the lease terms.

 

[driver4848]

Tesla refuses to generate form 15400, please advise.

I ordered a model Y in January and it was delivered in February, we paid cash, so Tesla did not have my SSN. For some other reason, I could not start my taxes earlier and my accountant is now telling me that I need the form 15400.

I tried getting the form from the website, after several attempts and waiting, the form was never generated. I called today and was told that the deadline to submit the form was back in January (or March, I don't remember exactly) and that they cannot longer send it.

I checked the IRS website and I meet all the requirements for a full credit, and it clearly states that the seller needs to report the required information to the buyer and the IRS.
This is a Tesla oversight in my opinion, my deadline to file my taxes is April 15, and Tesla did not send the appropriate paperwork. I searched everywhere and I could not find anywhere the requirement that I need to initiate or I'm required to request the form. I checked my email, IRS comms, etc. It all indicates that Tesla is responsible for this.

I intend to file my taxes without the form 15400 and claim my credit, any advice will be greatly appreciated. Thx.

 

[Alonzo]

You don't need the Form to file your taxes. However, if Tesla did not report your purchase to the IRS that's a different issue. Probably the easiest way to find out is to go ahead and file and claim the credit. The IRS will let you know if they reject it.

 

[mongo]

I just spoke to tesla in Philadelphia. After some research he came back to me and explained that the sales tax is applied on the price

After the $4000 tax credit is applied.

So I now have a very large car dealer in VA and the tesla dealership in Philadelphia agreeing that if I'm not paying $25000 I am not on the hook for state sales tax on the full amount.

The tesla rep said the used car team would send me documents that confirm this is how the tax situation should work in 2024 with the changes made whereby dealers get free money directly from the government.

I will share/upload same once I receive it.

To new tesla buyer's are you paying state sales tax on the full purchase amount?

Just curious.

Not sure why folks here are so snarky in their replies all I'm trying to do is understand what the rules are and learn and share.

And no I'm not trying to cheat on my taxes owed.

So if you want to slam me for investigating and sharing please move along.

It's not a reduction of the car price...
"The sale price of the eligible used clean vehicle, which must be $25,000 or less before applying a down payment due to a transferred credit. The sale price includes any delivery charges; is determined after the application of any incentives (other than the used clean vehicle credit); and excludes separately stated taxes and fees required by State or local law."
https://www.irs.gov/pub/irs-pdf/p5900.pdf

 

[driver4848]

You don't need the Form to file your taxes. However, if Tesla did not report your purchase to the IRS that's a different issue. Probably the easiest way to find out is to go ahead and file and claim the credit. The IRS will let you know if they reject it.

Thx. For the replay. I’m planning to do that. Will see. I read that Tesla reported vins to the IRS even thought they did not generate the 15400. (I’m not sure if that’s true). I will have to wait and see. Thx.

 

[MP3Mike]

Thx. For the replay. I’m planning to do that. Will see. I read that Tesla reported vins to the IRS even thought they did not generate the 15400. (I’m not sure if that’s true). I will have to wait and see. Thx.

If Tesla didn't have your SSN it seems likely that you will have issues...

 

[DomDeWild]

Tesla has more experience selling EV's than anyone, reporting sales and leases to the IRS is second nature to them. It would be very odd if they made a sale and did not report it to the IRS. Somewhere along the way they get everyone's SS #. This isn't Ford or Chevy.

 

[mongo]

Tesla has more experience selling EV's than anyone, reporting sales and leases to the IRS is second nature to them. It would be very odd if they made a sale and did not report it to the IRS. Somewhere along the way they get everyone's SS #. This isn't Ford or Chevy.

The problem was the IRS/ Treasury did not get the official guidance out until April 2023. As a result, the beginning of the year was thought to be carry over of the old system, but it turned out the IRS expected the new record keeping/ reporting system to be followed.

 

[MP3Mike]

Somewhere along the way they get everyone's SS #. This isn't Ford or Chevy.

Did you miss what they said:

I ordered a model Y in January and it was delivered in February, we paid cash, so Tesla did not have my SSN.

 

[Alonzo]

This isn't Ford or Chevy.

And, yet, Ford and Chevy issued Form 15400 at point of sale like required by the IRS and Tesla did not.

 

[DomDeWild]

OK, I take it back. Tesla has no idea what their doing.

 

[driver4848]

I talked to another Tesla rep. yesterday afternoon, same story, they told me to talk to the IRS, I told the guy that the IRS indicates that they seller needs to provide the information to them and the buyer, that I was just asking for a copy of a obligation they have.
I asked to talk to the supervisor, after 20min of waiting, the supervisor answers, I told him a need a copy of the 15400 that I have requested several times in the website, he said that the system bla bla bla, he asked me to send a screenshot of the documents list. Once he saw the screenshot, he said he was going to process the form manually and that I should get it on Wednesday the latest. Now I need to wait.

 

[Sukhjinder]

Got my Tesla Y on Jan 7, 2024 and was not given POS credit at the time of purchase (The system was not ready by then). I know I can reclaim the credit at the end of year when I file my taxes but what if I do not have tax liability to cover the whole credit? Plus, I have to pay loan interest on the whole amount of purchase that could have been a little less had I got the rebate initially.

This goes against the government initiative to provide rebate upfront. Now that the process is working tesla should rectify the problem for all those who fall in this category. A retroactive credit should be applied to loans.

 

[jjrandorin]

I know I can reclaim the credit at the end of year when I file my taxes but what if I do not have tax liability to cover the whole credit

If you dont have tax liability to cover the whole credit, you would have to pay it back on your taxes anyway, so you need to find some other angle to be mad about other than that one.

 

[MP3Mike]

Got my Tesla Y on Jan 7, 2024 and was not given POS credit at the time of purchase (The system was not ready by then). I know I can reclaim the credit at the end of year when I file my taxes but what if I do not have tax liability to cover the whole credit?

Then you only get a partial credit.

This goes against the government initiative to provide rebate upfront. Now that the process is working tesla should rectify the problem for all those who fall in this category. A retroactive credit should be applied to loans.

I don't know that the IRS supports, or has a procedure, to do that.

If you dont have tax liability to cover the whole credit, you would have to pay it back on your taxes anyway, so you need to find some other angle to be mad about other than that one.

No, the POS credit only needs to be paid back if your MAGI doesn't qualify.

 

[mongo]

If you dont have tax liability to cover the whole credit, you would have to pay it back on your taxes anyway, so you need to find some other angle to be mad about other than that one.

"Q4: What if a buyer has insufficient tax liability to fully use a transferred credit? (added Oct. 6, 2023)
A4. The amount of the credit that the electing taxpayer elects to transfer to the eligible entity may exceed the electing taxpayer’s regular tax liability for the taxable year in which the sale occurs, and the excess, if any, is not subject to recapture from the dealer or
the buyer."
https://www.irs.gov/pub/taxpros/fs-2023-29.pdf