I guess the question I should have asked is this, "In 2024, when the dealer can apply this at time or purchase, does it basically become a true rebate at that point, rather than the sticky wicket of a "tax credit" it currently exists as?" That would certainly be more of a useful "incentive" to me, as well as to many other Iʻm guessing. Thanks for hopefully helping me out on this seemingly crucial point of fact Rob, much appreciated!
I think you are basically signing an affidavit that says you expect to owe $7500 or more/have a tax liability of $7500 or more. If it’s less then you have to pay it back to the IRS.
On the other end of the income spectrum, for the next year, you have to owe at least $7,500 in taxes to get the full benefit of the credit. That's because the credit is applied against your tax bill (for vehicles purchased in 2023, you'll get the credit when you file in 2024) - and you don't get a refund if your tax credit is bigger than your total tax liability. A lot of people pay less than $7,500 in income taxes. Tens of millions of people, including many who earn more than the median income.
So I'm not sure I understand When it comes to tax refunds does this apply at all? I'm married have a child but my w2s are single and 0 to have irs pull max amount. So would this even apply to me? I never owe anything in taxes since they pull the max to cover. So how would this work for someone like me?
I have the same question and have been looking for an answer to this, but have yet to find a video clearing up the confusion. All these videos repeat the same thing. Hopefully he can respond to this.
Wondering the same thing. I never owe anything at the end of year. What if I did the withholding: I have the option of withholding having to pay the feds taxes on my bi weekly checks. If I did this for the entire year. Does it creates a tax liability at the end of the year, and I could utilize the EV tax credit? The elephant in the room is asking?
I’m in the same boat and have the same question. I’m married, 2 kids but claim single and 0 to let them take the most taxes and end up getting a refund. In order for this to be beneficial, I’d have to adjust my withholdings (and get more on my checks) and hope I end up owing a max of 7,500 which would then be offset by the EV credit? Woulda been nice to just let it increase your refund if you get one esp if they’re going to let you trade the credit next year to the dealer and knock it off the msrp.
i think this answers my question but let me just ask directly. Lets say for the next few months I want to go tax exempt at work, I know that come tax time next january I am going to have to pay that back of course. however I bought a tesla 8 months ago Feb 2023, and qualify for the full 7500$ tax credit. lets say in january I owe 5000$ in taxes, the EV credit will essentially cover that debt, right? I am not good in any way shape or form when it comes to taxes and cant seem to find an answer online. thanks for the help.
Hi Rob, I'm still a bit confused about how this applies to my specific situation. My annual income is about $140,000, so I pay more than $7,500 in taxes, but I'm a run-of-the-mill W2 so federal taxes are withheld throughout the year. By tax season, I usually get a refund for about $3k as I have a couple dependents. Since I'm getting a refund every year, does that mean my tax liability is 0? If that's the case, the credit would have no value to me.
@@Kumar-nx5ly I have since confirmed that your "refund" doesn't matter, just your total tax liability on the year. In my situation above, the refund would be $10,500 because my overall tax liability was over $7,500
Using a simplified sample, you will need a tax liability of at least $7,500 to take full advantage of the tax credit. If your tax liability is $6,000, you will only get a $6,000 credit. Tax liability has nothing to do with your W2 tax withholding or tax prepayment. Your W2 tax withholding will affect your taxes owed or tax refund. The get to a $7,500 tax liability for tax year 2023 (filing in 2024), single filers will need a $55,421 AGI (assuming no other tax credits). With a 2023 standard deduction of $13,850, you will need an income of $69,271. For those filing jointly, it's $66,167 AGI and $93,867 income with a $27,700 standard deduction. These assumes no other deductions/credits (education), no children, not blind, etc. I hope this is correct, I did this very quickly.
Does this mean that if I make 100K a year, after my standard deduction of ~13,850 they will add another 7500 so $21,350 will be total deduction. Therefore, my tax liability would be 78,650 for that year?
@@Mr.Roy72 Your 100k income would be reduced by the $13,850 standard deduction for single filers, then your tax liability will be calculated based on $86.150 AGI. This would mean your tax liability would be about $14,260, greater than the $7,500 tax credit, so you would be able to utilize the whole $7,500 tax credit, assuming no other deductions, credits, etc.
I don’t get it. So I can only benefit if I owe money in tax after filing my tax. As someone that always get a refund, does this mean the tax credit is useless since I don’t owe the federal anyways?
@@marcelnwaukwa4814 No. If you paid at least $7500 in federal taxes you can claim the full tax credit amount even if you normally get a tax refund due to the IRS withholding taxes from your paycheck throughout the year. If, for example, you made - let's say less than $50k - then you would owe less than $7500 in taxes and therefore could not claim the whole credit.
great explanation. Didnt know you can request the car compnay use it towards the sale price. Also thats why deduction is better than credit. If you low income and wont owe more than $2-4k in taxes you not getting any refund if you had the added $7500 deduction.
Thank you. Please make sure to check out my latest EV credit video - its updated and provides more information. th-cam.com/video/VrEorDN4v8g/w-d-xo.html
Isn’t basically what’s on line 24 of your taxes? Like if line 24 says $12,000 then u get the whole $7,500 tax credit back. But if line 24 says $5,238 then u only get $5,238 back? That’s how someone explained it to me
The video says line 37 is what you get your refund for. If it’s $12,000 then you need to pay $4,500. If your line 37 is $5,000 then you will not need to owe any taxes but you will not get a refund so they won’t give you $2,500 more as credit
@@rodrigocortes3641 i just spoke to a CPA and they said the number on line 16 needs to be higher than $7500 for you to get the total credit. It is how much tax liability you have. It’s not how much you owe.
Good question. It's tax form 8936. You'll need your VIN, cost paid, etc. This gets reported in your personal tax return. Whoever is preparing your tax return will need this information.
Hi this might be questions answered already. But when would I have to have the ev vehicle purchased so I can still use it for my taxes this year. Is it before Jan 2024?
Typically, you will need to purchase it and take ownership/hold of it before 12/31/23. Also, make sure the EV you are buying is on the approved list. Some EVs are no longer on the list or the credits have expired. You will also want to check with the dealer as well.
Excellent video! I purchased Fisker Ocean before Aug 16, 2022 and haven't received possession yet. I file taxes married filing jointly and AGI is below 300k. Should I qualify for $7500 EV credit? Also, this car is purchased for business use only. Do I also qualify for business vehicle credit for the tax year 2022. I've taken an extension for 2022 taxes. I'm in the process of finalizing my tax return. I'd appreciate it if you can reply quickly. Thanks
Thank you for watching. Please check out my current EV credit video - it provides more information. The key is what your line 18 shows on your tax return. th-cam.com/video/VrEorDN4v8g/w-d-xo.html
It will depend on your line 18. You should try to enter the information in your tax software - form 8936. Since you're receiving a refund already, you may not receive the full benefit.
Just want to confirm that I got this right. I'm looking at buying a 2023 Tesla Model 3 and fit all the criteria for the credit. Because I have set up the amount taken out for taxes throughout the year so I won't get much back or owe very much, I won't be able to able to get much, if any of the $7,500 credit, correct? We usually get back or own a hundred or so dollars each year. Thanks so much for the video!!!
Thank you for your question. Please watch my latest EV credit video: th-cam.com/video/VrEorDN4v8g/w-d-xo.html The credit doesn't relate to how much tax you have withheld from your paycheck...its driven from line 18.
@@rob_cpa After I posted my question, I saw where you had mentioned the 2nd video and watched it. It answered my questions. Thanks so much for making it!!! Have an AWESOME DAY!!!
Thanks Rob! Super helpful. QQ for you - I just bought a Tesla M Y in March 2023 and I haven't filed my 2022 returns yet...can I use my 2021 tax returns for this?
In you example, if That married couple filing jointly made $430,00 as their AGI, as you stated in your example, then actually, they would not qualify for the credit if they went out and bought a EV. But you said they would?? Am I missing something here???
You have to look at line 18 - just say this amount is $10,000. Then, just say the EV credit for you is $7,500. Line 24 will be $2,500 of tax due - assuming you have nothing on line 23. If you have withholding on line 25 and other credits. you will get a refund. So you can still get a refund, with the EV credit, its just hows its calculated. You don't want to look at what's happened in the past - only the current year - 2022.
So if you have other deductions does this credit come after or before? For example if I owe $8000 in taxes before I start doing my deductions, but after them, I get money, would i not benefit from this tax deduction? Also I usually have dependents but I file as if I'm single even though I'm married and have childrand. If I buy a vehicle that qualifies for the tax reduction should I just change my W2 so that way I get less tax taken out and owe more money at the end of the year so that way I could take advantage of this deduction?
Good morning. Can you please tell me if you know with the used EV price tax credit $25k includes sales tax? Total $25k or just the car price? Thank you.
Hi Rob, Very helpful content, thank you very much. Do you have any videos/content on how to deal with EV credit as a Self Employed/freelancer, please? Thank you in advance.
If you owe back taxes for a number of years, are currently on a payment plan with the IRS, can the tax credit be applied to that amount? or does it only apply to your taxes owed for 2023? thanks
it would only apply in the year you bought the car...but if you end up getting a refund, you can apply that to prior year taxes. Depending on your situation with the IRS, they may just apply that refund automatically to back taxes.
I thought that since Ferris filing married jointly having an AGI of 400K+, they get kicked out of the tax credit? Am I wrong? But you went on to give the credit despide their income overage. What's up with that?
Dear Sir. I signed a contract in March 2022 but I got the delivery for my model y on Nov 18, 2022. Can I qualify for ev tax credit if I live in oregon and my tax liability was over 7500.00 in 2022 tax year? Thank you in advance.
The tax credit is at the Federal level. Please check out my updated video that I posted about two months ago on this topic - I show you where you need to look on your tax return to see if you can get the credit.
I'm 67. Would it be a good idea to take money from 401k to get mY income up to the 7500 tax credit since it would be taxed anyway. Otherwise. My regular income would fall far. Short.
You can work on tax projections with your CPA as the year ends to determine if you will owe taxes and what line 18 will be on your tax return. If your 2023 tax return will be similar as 2022, you can make some estimates.
Hey I have a question hopefully you can help me. Let’s say I made $200,000 last year on self employment and this year I made $50,000. Can I claim the credit on the $200,000? Thanks in advance! Bought a Model Y LR. 2023
Is there a limit to the Federal tax credit for EVs.? Eg: So just but 1 Tesla 3/19 and want to buy another one by 3/31 but would we get the Fed tax credit x 2? ($15k).. We meet the requirements under their requirements
So you filed your 2022 taxes but forgot to include the EV credit in 2022? If you qualified for the EV credit in 2022, you can file an amended 2022 tax return.
So if i purchase a EV this year which results in credit of $7500 and Line 24 on my 1040 is $ 10900 and line 33 is $18400. According to IRS form 1040 Line 34 if Line 33 is > line 24 then it results in refund. So will there be a refund even if it is non refundable tax credit?
I will be posting a new video tomorrow to discuss the changes in the 2023 tax year. Toward the end of the video, I'm going to explain how the nonrefundable credit works so people can see it. After watching the new video, let me know if you have any further questions.
I bought a brand new Audi Eron S in March of 2022, Do I qualify for the $7500 tax credit? Would it be too late To file it on this year‘s taxes? I’m married now but we weren’t when I purchased the car. Last question, if I’m normally receiving a return is it pointless as this is more for a demo-graphic that normally pays taxes.
Question - I am an early retiree. I purchase medical insurance thru the medical insurance exchange in my state (Minnesota). In 2022, I owed some of my subsidy to the federal government as my income was higher than I had anticipated. Now, I purchased an electric vehicle in 2023. So, hypothetically, if my tax bill in 2023 is $5000 plus I owe an additional $3000 for my due to under payment of my premium subsidy. Therefore my total tax bill would be $8000 ($5000+$3000). Would I be able to use the $7500 credit or only $5000 for the income tax portion? Thanks.
Hello, Thank you for providing this valuable information. My situation is I reserved a Tesla Model 3 in July 2022, and then it got delivered in November 2022. However, the delivery shows I received the 2023 model. I understand there's the manufacturers sales volume cap? Was the delivery too early to receive the EV tax credit?
So basically every year I tend to owe only $500. Since I just bought a model Y I should modify my withholdings for more take home pay until I’ll owe the IRS 7,500? Otherwise ill lose the credit?
No, you don't necessarily need to modify your withholding. What does your line 18 of your 2022 tax return show? Just say it shows $3,000...then the most you could get from the $7,500 credit is $3,000.
@@rob_cpa thanks for the reply! My line for 2022 shows I owe $700. To be completely honest I want to take full advantage and get the $7500. Do you think it would be best to claim exempt for a few months so I can maximize the credit? It just seems if I typically owe 500 to 700 I’m loosing out on that credit. I’m not a tax pro by any means so I might not know what I’m talking about lol
great video. say i owe 20,000 taxes in 2023 , but TDS withholding at paychecks by itself= $18000...... i buy a n EV in 2023 and qualify for the $7500 NON_REFUNDABLE credit, how much will i be refunded when i file my taxes in 2024? $0 (or) 20000-18000-7500 = $5500 credit?
Here is a new video I just created given all the questions from the first video. th-cam.com/video/wZwwhdYT950/w-d-xo.html You want to look at line 18 on your tax return - Tax before non-refundable credits, then from there, you reduce it by credits, such as the EV credit.
Hi Rob, I am looking to buy an EV which currently qualifies for $7500 tax credit. I am single with $125k income. My federal taxes gets witheld throughtout the year and I do receive some refund at the end of the year. So does that mean I will receive additional $7500 in refund (but as your video suggests it is non refundable)?
I want to make sure I under it correctly; because of the nonrefundable rule. Let's say I owed the fed $10,000 2023 tax return and I made my quarterly estimate payments of $2500 per x 4. I want to take advantage of the EV tax credit therefore when making my estimate payment I would pay (1) payment instead of all four payments. The final tax return document should compute with the ($7500) credit and apply against what I owed and my estimated payment will also apply therefore it will zero out my dues, correct?
Please see my updated video released today on this topic. th-cam.com/video/wZwwhdYT950/w-d-xo.html The new video just focuses on the 2022 tax year - so if you bought and took possession of the EV in 2022, the video applies to you. I walkthrough a tax return example.
Unfortunately not. Self Employment appears on line 23 of the tax return. I'm posting a video tomorrow with an update to the EV credit for 2023 tax year, then at the end of the video, I will have some examples of a tax return to show the nonrefundable credit.
Question: In May 2023 suppose if you buy 2 tesla model y can you claim 15k if you meet all income requirements and married filing jointly and if you pay taxes more than 20k+ thanks 🙏 in advance.
6:42 I have SCOURED the internet for this information! NO ONE mentions this and makes it so confusing. I'd lean more towards your word than an average reviewer
Rob if my wife and I usually get a refund. Would it be more helpful to pay less throughout the year with the thought we may then owe and can use the credit to zero out? If not and we usually get a refund the credit is essentially worthless correct?
Depending on how large your refund is, if its large, you may want to double check your W4 forms from your employers, assuming you don't own a business. There is a good witholding calculator on the IRS website to help you plan: www.irs.gov/individuals/tax-withholding-estimator
I wanted to ask if lets say im on a w2 and will make about 62k this year, i pay around 2100 in mortgage and on side i have a real estate business which is 8 months old. Based on smart asset and since im already on w2 and have already payed taxes to irs will i get my money back inform of tax refund. Can i roll portal of EV credit for next year?
Hi Rob! Thank you for the info! I typically don't owe anything by the end of the year, I usually get a refund when I do my taxes. Should I adjust my tax deductions for the remainder of the year? Sounds like I won't be getting anything for buying a Tesla 3 this year, unfortunately. I would have changed my tax deductions months ago if I knew that! I am single with no dependents. Thank you for your feedback!
help me with this scenario! If I allow my employer to take out usual amount from my paycheck then I owe IRS nothing. This also means I will get $0 out of that $7500 credit, right? What can I do to owe IRS at least $7500. Can I just ask my employer to not take out any federal tax? Is that allowed?
Correct me if Im wrong but the credit applies to the line 16 amount NOT line 37. If line 18 is 7500 or higher then youd get the full credit on line 20. Thoughts?
Hi, I am a salaried employee and I am already paying my federal taxes per pay check. At the end of the year, I doubt if I will owe any tax to the government. Rather I will be eligible for a tax refund. In my situation, how can I claim the ev tax credit if I don’t owe anything to the government? Is there any way I can change my W4 form so I end up owing the federal tax to the government and utilize the ev tax credit ?
You have to look at line 18 - just say this amount is $10,000. Then, just say the EV credit for you is $7,500. Line 24 will be $2,500 of tax due - assuming you have nothing on line 23. If you have withholding on line 25 and other credits. you will get a refund. So you can still get a refund, with the EV credit, its just hows its calculated. You don't want to look at what's happened in the past - only the current year - 2022.
Hi Mr Rob, thanks in advance for your help , so in my case that I make roughly 40K a year and I’m single ( this year I got back $500 refund) I would get that $7500 refund right? I’m not exactly a numbers and figures kind of person, just trying to get a simple-peace-of-mind answer, thanks again for your time
My wife does my taxes 🫣 so I’m not familiar with all the numbers. What if I “owed” $7500 but I withheld enough she’s come tax season I get a tax return. The government is returning my extra money I sent them- but they still kept the $7500 I owed them. Would you get +$7500 on the tax return or is that also what is meant by non-refundable…. Meaning I shot myself in the foot by overpaying on taxes…
What if you are W2 income. You pay in over the year. So, you get a refund at the end of the year. Would this credit get you a bigger refund? Since, you pay in.
Same question I have.. I am trying to get answer for but no luck.. all videos and blogs giving examples of when person owes to IRS.. but what if IRS owes to tax payer?
@@shawnp3289 Exactly, I’ve watched several videos and it seems no one knows how this policy works. But from what I’m getting online, you can fill out a W4 form, to no pay federal taxes every paycheck so at the end of the year you will owe money. In the short term you will be making more money since you won’t be paying federal taxes. Not financial advise. But starting 2024, the tax credit turns into a rebate at the time of purchasing an ev , and in Oder to get the $7500, it must meet the battery l/assembly requirements
5:48 You will get the full tax credit if your tax form on Line 24 has at least $7,500. Let's say that line says $10,000, and through tax withholding you paid $11,000 in taxes. Normally you would get $1,000 back. With the $7,500 credit, it's as if you paid $18,500 in taxes. So you will get $8,500 back as tax refund.
Hello, I'm employee with W4 tax. My AGI is $40000. I pay around $10000 for federal tax this year. I'm really curious how the credit will work? Does federal will refund me with $7500 check or ?
Thank you for watching this video. Please check out my recent EV video - it will help answer your question. I posted it about a month ago. The key is line 18.
Can you clarify on the AGI limitations. I was just working thru the Form 8936 line 18 instructions and it appears the AGI considered is the lower of year 2022 AGI and year 2021 AGI. Thoughts?
You have to look at line 18 - just say this amount is $10,000. Then, just say the EV credit for you is $7,500. Line 24 will be $2,500 of tax due - assuming you have nothing on line 23. If you have withholding on line 25 and other credits. you will get a refund. So you can still get a refund, with the EV credit, its just hows its calculated. You don't want to look at what's happened in the past - only the current year - 2022.
Hi Rob, I have a question regarding this credit when the vehicle is purchased for business use. I went to tesla website recently and looked in a Model X. At checkout, they noted that it qualifies for $7500 only if you meet the AGI. However, there is a tab for business purchase that seems to have no income limit under the inflation reduction act. Does this mean that if it is bought for business use, I can still get the $7500 without considering AGI?
Hi, I see someone asked this question in your comment section. I'm going to ask it again I know the 7500 apply to 2023 models. But when you started the video you was talking about buying a car in 2022 year should we still file our taxes with that paperwork for the 22 Model even though the new tax Arrangement is for 2023?
Yes, the credit is good for 2022, but for certain vehicles. Here is an article from the IRS with more details: www.irs.gov/credits-deductions/credits-for-new-electric-vehicles-purchased-in-2022-or-before#:~:text=If%20you%20bought%20a%20new,least%205%20kilowatt%20hours%20(kWh)
@@rob_cpa Thank you for getting back to me. But my car was made in Germany and yes I did pick the car up after August. My question should I still fill out that form when I go to do my taxes to see if I get the EV credit or not? I know you said that it would qualify if it makes the weight and everything like that but when I read down further it says the car have to be made in North America.
@@rob_cpa I saw that even if you bought your car in 2023, you can use the preceding years AGI to qualify for the rebate. How does this work if for 2022, a person is single and meet the AGI, but gets married in 2023 and doesn't meet AGI. Can they still file for 2022 single meeting AGI for the rebate?
The problem is that the program is misdefined a tax credit. In fact its a tax rebate. You get the full $7500 only after qualifying and having tax consequences of $7500 or more. But for millions of Americans who are on fixed incomes or have low incomes with little or no tax consequences cannot qualify for the discount. A true tax credit like the $3600 Child Tax credit had no minimum tax liability to qualify for it. You got it by having a dependent under 5 or $3000 fir under 18 regardless of paying taxes pr not.
Very helpful info, but what if a fisker ocean car (a new EV) was bought in july 2022... but delivery of the vehicle isnt expected until mid 2023. Would a person be eligible for the pre inflation reduction act EV tax credit?
Jeffery - we just posted an updated video on this topic given all the questions from our first video: th-cam.com/video/wZwwhdYT950/w-d-xo.html Based on the IRS rules, you would follow the new 2023 EV rules. Rob
Hiya- thanks for the video & input. I’m confused by your example, Ferris & Sloan’s AGI is above 300k but you still reduced their tax liability by the 7,500. Wouldn’t their AGI have to be below in order to qualify?
adjust the tax withholding through W2, notify your HR. However you can still get the tax credit in 2024 as long as you have $7,500 in tax liabilities BEFORE any tax payment.
are small businesses eligible to write off the model y (under 6000lbs) AND qualify for the $7500 ev tax credit IF the company owner’s income exceeds $300k, BUT the vehicle is for an employee and to be claimed by the employee?
I hope you can do double check to give confirming information. For what you explained, it sounds not reasonable which punish people who overpaid their tax.
We bought a Tesla Model Y in 2021 but didn't take delivery until April 2022. It was purchased before the prices went up and Tesla honored the price from when we ordered it. Question: Do we qualify at all for any type of tax credit? Based on your video we don't but we were told if it was under I think they said 55,000 we would qualify? Then of course it seems that they no longer allow tax credits for Tesla's? Just making sure I have the facts. Thank you so much!
You could change your W4 withholding and claim more allowances, so your paycheck is higher to get this credit...but before you make any changes to your W4 form, work with your CPA to forecast/estimate so you can get the credit.
The taxes are taken out of my check bi-weekly so if I’ve already paid $12,000 in taxes throughout the year. So if I get a tax credit reducing my tax liability from $12,000 to $4500. Would I see any of that money in my tax refund after filing taxes?
Are you asking about the EV credit? if so, you need to check line 18 of your tax return...what does that show as total tax? Is that above your EV credit?
I don’t get it. So I can only benefit if I owe money in tax after filing my tax. As someone that always get a refund, does this mean the tax credit is useless since I don’t owe the federal anyways?
So it would seem to benefit only those that typically owe after doing their taxes. For those that typically get a refund I'm assuming maximizing the deduction would require claiming more deductions that you normally would.
No, all one needs is to have $7,500 tax liability to be able to get your full credit. Doesn't have anything to do with people that are getting refund to NOT be able to get the credit.
@@Trust_but_Verify yeah. But if you paid 7500, then add normal dedications, medical, prescriptions, co-pays, charity, donations, good will, etc, you’d be way under 7500 and probably close to zero.
@@CurieBohr Typically now standard deduction will exceed the other ones unless you have outsized charitable donation (lump 3 years into 1 into charitable grant type of account). The $7,500 I was referring to is after all the deductions.
@@huynhfamilychannel7021 The CPA wasn't wrong but the example he used showed folks that owed taxes. As @Trust but Verify explained, one just needs to have a total federal tax liability of >= $7500. If you advanced paid your taxes throughout the year from payroll deductions you can still claim the tax credit.
Quick question. If you are certain you wont owe anything the year you file...could you take advantage of the credit by maxing out (for a certain period of time) the dependants to build up the credit owed to then be relinquished?
Hey I have a question hopefully you can help me. Let’s say I made $200,000 last year on self employment and this year I made $50,000. Can I claim the credit on the $200,000? Thanks in advance! Bought a Model Y LR. 2023
I purchased a 2022 KIA in May 2022 and installed the charging system in my home in June. My tax refund for the vehicle is only giving me $4,500. Should I be getting the full $7,500?
If you remove the vehicle, what is your refund? Also, depends on your Kia - see the site below - not all Kias are elligble for the full $7,500 credit: www.fueleconomy.gov/feg/taxevb.shtml
You might be able to...I know the Tesla credits stopped at some point in 2022 because they reached their capacity. Here is a website you can use to check: afdc.energy.gov/laws/electric-vehicles-for-tax-credit
Look at page 2 of your 1040 - line 18 - is there a tax amount there? You may not owe anything because you had W2 withholding or made quarterly tax estimates.
I am a regular W-2 employee and every year I get a few thousand $ refund. Recently bought an EV that qualifies for the EV tax credit. Should I file a new W-4 to reduce my withheld money so I can owe money to IRS? Or I probably didn’t understand the point of this video. Thank you
No...the key is to look at line 18 of your tax return...if it shows a tax amount, then you can use the credit to reduce that tax amount. the W4 is a different matter. excluding the EV credit, if you've been owing taxes each year, I suggest you change your W4 form.
Hi Rob, Thanks for the video and detailed explanation of Tax credit. I recently (Feb 2023) purchased Plug-in Hybrid car which is eligible for Federal Tax credit of $7,500. I had some issues with the car and planning to exchange the same with Dealer but this time I am going with full Gas (No Plug-in Hybrid). I am expecting my new car sometime in September 2023. Am I still eligible to apply for Tax Credit?
meaning of "non refundable" was exactly the reason I searched youtube. Glad I watched your video. Thank you
Glad it was helpful!
check out my latest EV video - it was released about two weeks ago and provides better insight.
Finally someone who actually puts it in numbers
Thank you.
@@rob_cpa I was told Self employed EV buyers still get the $7500 EV credit. Can you verify?
I guess the question I should have asked is this, "In 2024, when the dealer can apply this at time or purchase, does it basically become a true rebate at that point, rather than the sticky wicket of a "tax credit" it currently exists as?" That would certainly be more of a useful "incentive" to me, as well as to many other Iʻm guessing. Thanks for hopefully helping me out on this seemingly crucial point of fact Rob, much appreciated!
I think you are basically signing an affidavit that says you expect to owe $7500 or more/have a tax liability of $7500 or more. If it’s less then you have to pay it back to the IRS.
Excellent video. Very detailed and straight to the point. Thank you!
Thank you for watching.
On the other end of the income spectrum, for the next year, you have to owe at least $7,500 in taxes to get the full benefit of the credit. That's because the credit is applied against your tax bill (for vehicles purchased in 2023, you'll get the credit when you file in 2024) - and you don't get a refund if your tax credit is bigger than your total tax liability.
A lot of people pay less than $7,500 in income taxes. Tens of millions of people, including many who earn more than the median income.
If you don't owe enough to get the entire credit do a Roth conversion that generates enough tax liability to use up the rest of the available credit.
I don’t know what that means.
So I'm not sure I understand
When it comes to tax refunds does this apply at all? I'm married have a child but my w2s are single and 0 to have irs pull max amount. So would this even apply to me? I never owe anything in taxes since they pull the max to cover. So how would this work for someone like me?
I have the same question and have been looking for an answer to this, but have yet to find a video clearing up the confusion. All these videos repeat the same thing. Hopefully he can respond to this.
@@minikonabrew hasn't yet here's to hope lol
Wondering the same thing. I never owe anything at the end of year. What if I did the withholding: I have the option of withholding having to pay the feds taxes on my bi weekly checks. If I did this for the entire year. Does it creates a tax liability at the end of the year, and I could utilize the EV tax credit? The elephant in the room is asking?
I’m in the same boat and have the same question. I’m married, 2 kids but claim single and 0 to let them take the most taxes and end up getting a refund. In order for this to be beneficial, I’d have to adjust my withholdings (and get more on my checks) and hope I end up owing a max of 7,500 which would then be offset by the EV credit? Woulda been nice to just let it increase your refund if you get one esp if they’re going to let you trade the credit next year to the dealer and knock it off the msrp.
@@bigpoppa4094 if you do the withholding for sure you'd see the credit to reduce your liability. But that's a lot of work haha
This was just the video I was looking for. Thanks.
i think this answers my question but let me just ask directly. Lets say for the next few months I want to go tax exempt at work, I know that come tax time next january I am going to have to pay that back of course. however I bought a tesla 8 months ago Feb 2023, and qualify for the full 7500$ tax credit. lets say in january I owe 5000$ in taxes, the EV credit will essentially cover that debt, right? I am not good in any way shape or form when it comes to taxes and cant seem to find an answer online. thanks for the help.
Hi Rob, I'm still a bit confused about how this applies to my specific situation. My annual income is about $140,000, so I pay more than $7,500 in taxes, but I'm a run-of-the-mill W2 so federal taxes are withheld throughout the year. By tax season, I usually get a refund for about $3k as I have a couple dependents. Since I'm getting a refund every year, does that mean my tax liability is 0? If that's the case, the credit would have no value to me.
I believe you would get back $10,500 total
Hi Brandon - what does your line 18 show for 2022?
I created another EV tax credit video that provides more insight on this credit.
Hi rob is the video releasing soon?@@rob_cpa
Please provide answer for this main comment.
I am in similar situation too.
@@Kumar-nx5ly I have since confirmed that your "refund" doesn't matter, just your total tax liability on the year. In my situation above, the refund would be $10,500 because my overall tax liability was over $7,500
Great breakdown, How certain are you that we are able to get point of sell credit in 2024
As of now, it’s still on…but I wouldn’t be surprised if Congress changes it
Thanks for explaining this tricky subject.
Thank you for the feedback.
Using a simplified sample, you will need a tax liability of at least $7,500 to take full advantage of the tax credit. If your tax liability is $6,000, you will only get a $6,000 credit. Tax liability has nothing to do with your W2 tax withholding or tax prepayment. Your W2 tax withholding will affect your taxes owed or tax refund.
The get to a $7,500 tax liability for tax year 2023 (filing in 2024), single filers will need a $55,421 AGI (assuming no other tax credits). With a 2023 standard deduction of $13,850, you will need an income of $69,271.
For those filing jointly, it's $66,167 AGI and $93,867 income with a $27,700 standard deduction. These assumes no other deductions/credits (education), no children, not blind, etc. I hope this is correct, I did this very quickly.
Does this mean that if I make 100K a year, after my standard deduction of ~13,850 they will add another 7500 so $21,350 will be total deduction. Therefore, my tax liability would be 78,650 for that year?
@@Mr.Roy72 Your 100k income would be reduced by the $13,850 standard deduction for single filers, then your tax liability will be calculated based on $86.150 AGI. This would mean your tax liability would be about $14,260, greater than the $7,500 tax credit, so you would be able to utilize the whole $7,500 tax credit, assuming no other deductions, credits, etc.
I don’t get it. So I can only benefit if I owe money in tax after filing my tax. As someone that always get a refund, does this mean the tax credit is useless since I don’t owe the federal anyways?
@@marcelnwaukwa4814 I have the same question
@@marcelnwaukwa4814 No. If you paid at least $7500 in federal taxes you can claim the full tax credit amount even if you normally get a tax refund due to the IRS withholding taxes from your paycheck throughout the year. If, for example, you made - let's say less than $50k - then you would owe less than $7500 in taxes and therefore could not claim the whole credit.
great explanation. Didnt know you can request the car compnay use it towards the sale price. Also thats why deduction is better than credit. If you low income and wont owe more than $2-4k in taxes you not getting any refund if you had the added $7500 deduction.
Thank you.
Please make sure to check out my latest EV credit video - its updated and provides more information.
th-cam.com/video/VrEorDN4v8g/w-d-xo.html
Isn’t basically what’s on line 24 of your taxes? Like if line 24 says $12,000 then u get the whole $7,500 tax credit back. But if line 24 says $5,238 then u only get $5,238 back? That’s how someone explained it to me
that's how I understood it too
The video says line 37 is what you get your refund for. If it’s $12,000 then you need to pay $4,500. If your line 37 is $5,000 then you will not need to owe any taxes but you will not get a refund so they won’t give you $2,500 more as credit
@@drummerboy5 ok I’ll check my tax return to see if I’m getting something lol
If your line 24 is $5,000, you cannot afford a $55,000 car.
@@rodrigocortes3641 i just spoke to a CPA and they said the number on line 16 needs to be higher than $7500 for you to get the total credit. It is how much tax liability you have. It’s not how much you owe.
What do you need to file for it? Do you know anyone that has done it? I was told to just bring my registration paper when I file my taxes.
Good question.
It's tax form 8936. You'll need your VIN, cost paid, etc. This gets reported in your personal tax return.
Whoever is preparing your tax return will need this information.
Hi this might be questions answered already. But when would I have to have the ev vehicle purchased so I can still use it for my taxes this year. Is it before Jan 2024?
Typically, you will need to purchase it and take ownership/hold of it before 12/31/23. Also, make sure the EV you are buying is on the approved list. Some EVs are no longer on the list or the credits have expired. You will also want to check with the dealer as well.
Excellent video! I purchased Fisker Ocean before Aug 16, 2022 and haven't received possession yet. I file taxes married filing jointly and AGI is below 300k. Should I qualify for $7500 EV credit? Also, this car is purchased for business use only. Do I also qualify for business vehicle credit for the tax year 2022. I've taken an extension for 2022 taxes. I'm in the process of finalizing my tax return. I'd appreciate it if you can reply quickly. Thanks
Thank you for watching.
Please check out my current EV credit video - it provides more information. The key is what your line 18 shows on your tax return.
th-cam.com/video/VrEorDN4v8g/w-d-xo.html
What if I have a federal tax refund based on the taxes I paid from W2 and income is below 300k MFJ
How do I claim the 7500 tax credit
It will depend on your line 18. You should try to enter the information in your tax software - form 8936. Since you're receiving a refund already, you may not receive the full benefit.
Just want to confirm that I got this right. I'm looking at buying a 2023 Tesla Model 3 and fit all the criteria for the credit. Because I have set up the amount taken out for taxes throughout the year so I won't get much back or owe very much, I won't be able to able to get much, if any of the $7,500 credit, correct? We usually get back or own a hundred or so dollars each year. Thanks so much for the video!!!
Thank you for your question.
Please watch my latest EV credit video: th-cam.com/video/VrEorDN4v8g/w-d-xo.html
The credit doesn't relate to how much tax you have withheld from your paycheck...its driven from line 18.
@@rob_cpa After I posted my question, I saw where you had mentioned the 2nd video and watched it. It answered my questions. Thanks so much for making it!!! Have an AWESOME DAY!!!
Thanks Rob! Super helpful. QQ for you - I just bought a Tesla M Y in March 2023 and I haven't filed my 2022 returns yet...can I use my 2021 tax returns for this?
Did you do it any update ?
@@JustxLiving909 bought the car, but i don’t qualify.
In you example, if That married couple filing jointly made $430,00 as their AGI, as you stated in your example, then actually, they would not qualify for the credit if they went out and bought a EV. But you said they would??
Am I missing something here???
He said they could NOT.
You have to look at line 18 - just say this amount is $10,000. Then, just say the EV credit for you is $7,500. Line 24 will be $2,500 of tax due - assuming you have nothing on line 23. If you have withholding on line 25 and other credits. you will get a refund.
So you can still get a refund, with the EV credit, its just hows its calculated.
You don't want to look at what's happened in the past - only the current year - 2022.
So if you have other deductions does this credit come after or before? For example if I owe $8000 in taxes before I start doing my deductions, but after them, I get money, would i not benefit from this tax deduction? Also I usually have dependents but I file as if I'm single even though I'm married and have childrand. If I buy a vehicle that qualifies for the tax reduction should I just change my W2 so that way I get less tax taken out and owe more money at the end of the year so that way I could take advantage of this deduction?
if after all your deductions and your tax liability is up to $7,500 then you can get the $7,500 back regardless of what tax amount you paid.
Non refundable credits are applied before refundable credits
check the link: th-cam.com/video/yqg_N5H8kf0/w-d-xo.html, this video mislead people
Good morning. Can you please tell me if you know with the used EV price tax credit $25k includes sales tax? Total $25k or just the car price? Thank you.
Hi Rob,
Very helpful content, thank you very much.
Do you have any videos/content on how to deal with EV credit as a Self Employed/freelancer, please?
Thank you in advance.
Hey Rob, quick question. What if Line 11 have $30k AGI and Line 37 have $0 for amount owe section for 1040 form? would it be qualify for $7500?
check out my latest EV video - its really line 18 that drives it all for the 2022 tax year.
If you owe back taxes for a number of years, are currently on a payment plan with the IRS, can the tax credit be applied to that amount? or does it only apply to your taxes owed for 2023? thanks
it would only apply in the year you bought the car...but if you end up getting a refund, you can apply that to prior year taxes. Depending on your situation with the IRS, they may just apply that refund automatically to back taxes.
I thought that since Ferris filing married jointly having an AGI of 400K+, they get kicked out of the tax credit? Am I wrong? But you went on to give the credit despide their income overage. What's up with that?
This was an older video for 2022. A new EV video has been created with the new rules.
Bob - can 2 friends be on the title and one claim tax credit as only one is under income limits?
Only one can claim the credit and its typically the user of the vehicle.
Dear Sir.
I signed a contract in March 2022 but I got the delivery for my model y on Nov 18, 2022. Can I qualify for ev tax credit if I live in oregon and my tax liability was over 7500.00 in 2022 tax year? Thank you in advance.
The tax credit is at the Federal level.
Please check out my updated video that I posted about two months ago on this topic - I show you where you need to look on your tax return to see if you can get the credit.
I'm 67. Would it be a good idea to take money from 401k to get mY income up to the 7500 tax credit since it would be taxed anyway. Otherwise. My regular income would fall far. Short.
I don't understand the EV tax credit in 2024 taken at the time of purchase. I just mean, how does one know they would have a 7500 tax bill?
You can work on tax projections with your CPA as the year ends to determine if you will owe taxes and what line 18 will be on your tax return. If your 2023 tax return will be similar as 2022, you can make some estimates.
Hey I have a question hopefully you can help me. Let’s say I made $200,000 last year on self employment and this year I made $50,000. Can I claim the credit on the $200,000? Thanks in advance! Bought a Model Y LR. 2023
Please watch my latest EV video - I get into more details. It really depends on line 18 of your tax return.
Is there a limit to the Federal tax credit for EVs.?
Eg: So just but 1 Tesla 3/19 and want to buy another one by 3/31 but would we get the Fed tax credit x 2? ($15k).. We meet the requirements under their requirements
i am wondering the same. does anyone know?
If I purchase a vehicle in 2024, do I fill out the necessary forms on my taxes on the 2024 tax year ?
Correct.
So if you bought in 2024, this will be a credit on your 2024 tax return that you file in 2025.
@@rob_cpathanks….. does it matter what kind of taxes? (e.g. ROTH conversion)
Hey question
If I already made my taxes how do I claim the tax credit
So you filed your 2022 taxes but forgot to include the EV credit in 2022? If you qualified for the EV credit in 2022, you can file an amended 2022 tax return.
So if i purchase a EV this year which results in credit of $7500 and Line 24 on my 1040 is $ 10900 and line 33 is $18400. According to IRS form 1040 Line 34 if Line 33 is > line 24 then it results in refund. So will there be a refund even if it is non refundable tax credit?
I will be posting a new video tomorrow to discuss the changes in the 2023 tax year.
Toward the end of the video, I'm going to explain how the nonrefundable credit works so people can see it.
After watching the new video, let me know if you have any further questions.
Hello, I am a full timer. Which makes 3200 gross per month, am I eligible for this EV tax credit. Itll be my first car if got approved so. 😢
I bought a brand new Audi Eron S in March of 2022, Do I qualify for the $7500 tax credit? Would it be too late To file it on this year‘s taxes? I’m married now but we weren’t when I purchased the car. Last question, if I’m normally receiving a return is it pointless as this is more for a demo-graphic that normally pays taxes.
Question - I am an early retiree. I purchase medical insurance thru the medical insurance exchange in my state (Minnesota). In 2022, I owed some of my subsidy to the federal government as my income was higher than I had anticipated. Now, I purchased an electric vehicle in 2023. So, hypothetically, if my tax bill in 2023 is $5000 plus I owe an additional $3000 for my due to under payment of my premium subsidy. Therefore my total tax bill would be $8000 ($5000+$3000). Would I be able to use the $7500 credit or only $5000 for the income tax portion? Thanks.
The key is line 18 on your personal tax return for 2023...if there is an amount greater than your EV credit, then it will help reduce your liabiliy.
What happens if I leased a Tesla Model 3 and took delivery Feb 11,2023? Do I qualify for tax credit $7500?
Hello,
Thank you for providing this valuable information. My situation is I reserved a Tesla Model 3 in July 2022, and then it got delivered in November 2022. However, the delivery shows I received the 2023 model. I understand there's the manufacturers sales volume cap? Was the delivery too early to receive the EV tax credit?
So basically every year I tend to owe only $500. Since I just bought a model Y I should modify my withholdings for more take home pay until I’ll owe the IRS 7,500? Otherwise ill lose the credit?
No, you don't necessarily need to modify your withholding. What does your line 18 of your 2022 tax return show? Just say it shows $3,000...then the most you could get from the $7,500 credit is $3,000.
@@rob_cpa thanks for the reply! My line for 2022 shows I owe $700. To be completely honest I want to take full advantage and get the $7500. Do you think it would be best to claim exempt for a few months so I can maximize the credit? It just seems if I typically owe 500 to 700 I’m loosing out on that credit. I’m not a tax pro by any means so I might not know what I’m talking about lol
great video. say i owe 20,000 taxes in 2023 , but TDS withholding at paychecks by itself= $18000...... i buy a n EV in 2023 and qualify for the $7500 NON_REFUNDABLE credit, how much will i be refunded when i file my taxes in 2024? $0 (or) 20000-18000-7500 = $5500 credit?
Here is a new video I just created given all the questions from the first video. th-cam.com/video/wZwwhdYT950/w-d-xo.html
You want to look at line 18 on your tax return - Tax before non-refundable credits, then from there, you reduce it by credits, such as the EV credit.
Hi Rob, I am looking to buy an EV which currently qualifies for $7500 tax credit. I am single with $125k income. My federal taxes gets witheld throughtout the year and I do receive some refund at the end of the year. So does that mean I will receive additional $7500 in refund (but as your video suggests it is non refundable)?
I just posted a new video last Friday. Please watch it as it will answer your questions.
I want to make sure I under it correctly; because of the nonrefundable rule. Let's say I owed the fed $10,000 2023 tax return and I made my quarterly estimate payments of $2500 per x 4. I want to take advantage of the EV tax credit therefore when making my estimate payment I would pay (1) payment instead of all four payments. The final tax return document should compute with the ($7500) credit and apply against what I owed and my estimated payment will also apply therefore it will zero out my dues, correct?
Please see my updated video released today on this topic. th-cam.com/video/wZwwhdYT950/w-d-xo.html
The new video just focuses on the 2022 tax year - so if you bought and took possession of the EV in 2022, the video applies to you.
I walkthrough a tax return example.
can i reduce self employment tax by that credit?
Unfortunately not. Self Employment appears on line 23 of the tax return.
I'm posting a video tomorrow with an update to the EV credit for 2023 tax year, then at the end of the video, I will have some examples of a tax return to show the nonrefundable credit.
@@rob_cpa thank you thats so fun because some accountants say you can, others can’t, and all 15+ years of experience and idk who to believe (
Question: In May 2023 suppose if you buy 2 tesla model y can you claim 15k if you meet all income requirements and married filing jointly and if you pay taxes more than 20k+ thanks 🙏 in advance.
You would want each purchase to be under the taxpayers name.
@@rob_cpa thanks 🙏 so basically 1 car on my name and other car on my wife’s name or can we have both car on single tax payers name ?
@@chintanshah75 Hi Chinatan, I also have the same question. Were you able to find the right answer?
@@harindesai3925 you can buy 2 tesla and get credit for both if you meet all the other requirements
@@chintanshah75 Thanks Chintan. so it wil be best to buy one on my name and other on my wife's name?
6:42 I have SCOURED the internet for this information!
NO ONE mentions this and makes it so confusing. I'd lean more towards your word than an average reviewer
Rob if my wife and I usually get a refund. Would it be more helpful to pay less throughout the year with the thought we may then owe and can use the credit to zero out? If not and we usually get a refund the credit is essentially worthless correct?
Depending on how large your refund is, if its large, you may want to double check your W4 forms from your employers, assuming you don't own a business. There is a good witholding calculator on the IRS website to help you plan: www.irs.gov/individuals/tax-withholding-estimator
I wanted to ask if lets say im on a w2 and will make about 62k this year, i pay around 2100 in mortgage and on side i have a real estate business which is 8 months old.
Based on smart asset and since im already on w2 and have already payed taxes to irs will i get my money back inform of tax refund.
Can i roll portal of EV credit for next year?
So what if the government owes you 5000. Then tax credit would just be added to amount owed...12,500 back form government now?
Hi Rob! Thank you for the info! I typically don't owe anything by the end of the year, I usually get a refund when I do my taxes. Should I adjust my tax deductions for the remainder of the year? Sounds like I won't be getting anything for buying a Tesla 3 this year, unfortunately. I would have changed my tax deductions months ago if I knew that! I am single with no dependents. Thank you for your feedback!
Same question. That's beyond stupid if this is true.
help me with this scenario! If I allow my employer to take out usual amount from my paycheck then I owe IRS nothing. This also means I will get $0 out of that $7500 credit, right? What can I do to owe IRS at least $7500. Can I just ask my employer to not take out any federal tax? Is that allowed?
Correct me if Im wrong but the credit applies to the line 16 amount NOT line 37. If line 18 is 7500 or higher then youd get the full credit on line 20. Thoughts?
Please see my updated video: th-cam.com/video/wZwwhdYT950/w-d-xo.html - the original was prepared before guidance came out.
Hi, I am a salaried employee and I am already paying my federal taxes per pay check. At the end of the year, I doubt if I will owe any tax to the government. Rather I will be eligible for a tax refund.
In my situation, how can I claim the ev tax credit if I don’t owe anything to the government? Is there any way I can change my W4 form so I end up owing the federal tax to the government and utilize the ev tax credit ?
You have to look at line 18 - just say this amount is $10,000. Then, just say the EV credit for you is $7,500. Line 24 will be $2,500 of tax due - assuming you have nothing on line 23. If you have withholding on line 25 and other credits. you will get a refund.
So you can still get a refund, with the EV credit, its just hows its calculated.
You don't want to look at what's happened in the past - only the current year - 2022.
Hi Mr Rob, thanks in advance for your help , so in my case that I make roughly 40K a year and I’m single ( this year I got back $500 refund) I would get that $7500 refund right? I’m not exactly a numbers and figures kind of person, just trying to get a simple-peace-of-mind answer, thanks again for your time
My wife does my taxes 🫣 so I’m not familiar with all the numbers. What if I “owed” $7500 but I withheld enough she’s come tax season I get a tax return. The government is returning my extra money I sent them- but they still kept the $7500 I owed them. Would you get +$7500 on the tax return or is that also what is meant by non-refundable…. Meaning I shot myself in the foot by overpaying on taxes…
What if you are W2 income. You pay in over the year. So, you get a refund at the end of the year. Would this credit get you a bigger refund? Since, you pay in.
Same question I have.. I am trying to get answer for but no luck.. all videos and blogs giving examples of when person owes to IRS.. but what if IRS owes to tax payer?
Majority of people that are purchasing for the tax credit are probably W2 income earners. All of these TH-camrs should make that part clear.
@@shawnp3289 Exactly, I’ve watched several videos and it seems no one knows how this policy works. But from what I’m getting online, you can fill out a W4 form, to no pay federal taxes every paycheck so at the end of the year you will owe money. In the short term you will be making more money since you won’t be paying federal taxes. Not financial advise. But starting 2024, the tax credit turns into a rebate at the time of purchasing an ev , and in Oder to get the $7500, it must meet the battery l/assembly requirements
@@suryachu1 Its actually real simple, if the IRS owes you money you do not get the credit at all.
5:48 You will get the full tax credit if your tax form on Line 24 has at least $7,500.
Let's say that line says $10,000, and through tax withholding you paid $11,000 in taxes.
Normally you would get $1,000 back. With the $7,500 credit, it's as if you paid $18,500 in taxes.
So you will get $8,500 back as tax refund.
Hello,
I'm employee with W4 tax. My AGI is $40000. I pay around $10000 for federal tax this year. I'm really curious how the credit will work? Does federal will refund me with $7500 check or ?
Thank you for watching this video. Please check out my recent EV video - it will help answer your question. I posted it about a month ago. The key is line 18.
Can you clarify on the AGI limitations. I was just working thru the Form 8936 line 18 instructions and it appears the AGI considered is the lower of year 2022 AGI and year 2021 AGI.
Thoughts?
You have to look at line 18 - just say this amount is $10,000. Then, just say the EV credit for you is $7,500. Line 24 will be $2,500 of tax due - assuming you have nothing on line 23. If you have withholding on line 25 and other credits. you will get a refund.
So you can still get a refund, with the EV credit, its just hows its calculated.
You don't want to look at what's happened in the past - only the current year - 2022.
Well explained, thanks!
Glad it was helpful!
Hi Rob,
I have a question regarding this credit when the vehicle is purchased for business use. I went to tesla website recently and looked in a Model X. At checkout, they noted that it qualifies for $7500 only if you meet the AGI. However, there is a tab for business purchase that seems to have no income limit under the inflation reduction act. Does this mean that if it is bought for business use, I can still get the $7500 without considering AGI?
Hi, I see someone asked this question in your comment section. I'm going to ask it again I know the 7500 apply to 2023 models. But when you started the video you was talking about buying a car in 2022 year should we still file our taxes with that paperwork for the 22 Model even though the new tax Arrangement is for 2023?
Yes, the credit is good for 2022, but for certain vehicles.
Here is an article from the IRS with more details:
www.irs.gov/credits-deductions/credits-for-new-electric-vehicles-purchased-in-2022-or-before#:~:text=If%20you%20bought%20a%20new,least%205%20kilowatt%20hours%20(kWh)
@@rob_cpa Thank you for getting back to me. But my car was made in Germany and yes I did pick the car up after August. My question should I still fill out that form when I go to do my taxes to see if I get the EV credit or not? I know you said that it would qualify if it makes the weight and everything like that but when I read down further it says the car have to be made in North America.
@@rob_cpa I saw that even if you bought your car in 2023, you can use the preceding years AGI to qualify for the rebate. How does this work if for 2022, a person is single and meet the AGI, but gets married in 2023 and doesn't meet AGI. Can they still file for 2022 single meeting AGI for the rebate?
Can I buy 2 EV’s in the same year and get a $15000 tax credit?
No, its one per taxpayer, per year.
@@rob_cpa Thank you very much for this useful tax information.
The problem is that the program is misdefined a tax credit. In fact its a tax rebate. You get the full $7500 only after qualifying and having tax consequences of $7500 or more. But for millions of Americans who are on fixed incomes or have low incomes with little or no tax consequences cannot qualify for the discount. A true tax credit like the $3600 Child Tax credit had no minimum tax liability to qualify for it. You got it by having a dependent under 5 or $3000 fir under 18 regardless of paying taxes pr not.
Very helpful info, but what if a fisker ocean car (a new EV) was bought in july 2022... but delivery of the vehicle isnt expected until mid 2023. Would a person be eligible for the pre inflation reduction act EV tax credit?
Jeffery - we just posted an updated video on this topic given all the questions from our first video: th-cam.com/video/wZwwhdYT950/w-d-xo.html
Based on the IRS rules, you would follow the new 2023 EV rules.
Rob
Not available for resale? So I can’t sell it to a dealer or trade it?
In 2024, if you buy a new EV and if it qualifies, you can sell the credit to a dealer.
How long do I have to wait to sell my EV after it was purchased with the $7,500 Federal Tax Credit?
My line 18 is $9621. Line 21 is $4000 for child tax credit. Line 24 is $5621. Do I get the full $7500 or do I get partial credit?
Part
Hiya- thanks for the video & input. I’m confused by your example, Ferris & Sloan’s AGI is above 300k but you still reduced their tax liability by the 7,500. Wouldn’t their AGI have to be below in order to qualify?
Thanks for watching the video.
This was an older video.
I created a newer one about 2 months ago with the new rules for 2023.
What if one hasn't enough income to owe at least $7500 in federal taxes?
Then you won’t get the $7,500 since there is no tax to offset it
If someone is getting tax refund in filing, will this EV tax credit help in anyway?
Yes, you could get a larger refund..please watch my updated EV video - it all depends on line 18 of your 1040.
So i claim exept the possibility of me getting the full tax credit is more likley ?
What does line 18 show on your 2022 tax returns?
Is there a way to adjust amount of tax taken to owe so you can use the credit, also where would that be on a W2
adjust the tax withholding through W2, notify your HR. However you can still get the tax credit in 2024 as long as you have $7,500 in tax liabilities BEFORE any tax payment.
Resubmit your W4 form
Increase your income
@@saurabhmarwaha2665 Not true, actually found its tax liability not tax return. i pay 120k in taxes so income past about 60k doesnt matter.
are small businesses eligible to write off the model y (under 6000lbs) AND qualify for the $7500 ev tax credit IF the company owner’s income exceeds $300k, BUT the vehicle is for an employee and to be claimed by the employee?
I hope you can do double check to give confirming information. For what you explained, it sounds not reasonable which punish people who overpaid their tax.
Please let me know what you would like double checked.
@@rob_cpa th-cam.com/video/yqg_N5H8kf0/w-d-xo.html
We bought a Tesla Model Y in 2021 but didn't take delivery until April 2022. It was purchased before the prices went up and Tesla honored the price from when we ordered it. Question: Do we qualify at all for any type of tax credit? Based on your video we don't but we were told if it was under I think they said 55,000 we would qualify? Then of course it seems that they no longer allow tax credits for Tesla's? Just making sure I have the facts. Thank you so much!
If the dealer can provide proof that you are part of the original Tesla credits, you might be able to qualify for it.
What if a EV buyer sells his vehicle in the same year he bought it and sells it after only a week of use. Who claims the EV tax credit?
how do these nonrefundable tax credits benefit families with AGIs
You could change your W4 withholding and claim more allowances, so your paycheck is higher to get this credit...but before you make any changes to your W4 form, work with your CPA to forecast/estimate so you can get the credit.
What if I'm doing Estimated tax payment (Form 1040-ES) for 2023? What would happen to my EV Tax Credit?
Nice and to the point!
How about independence contract thx
So should I exempt my federal tax
Hi,
I would like to ask. I purchased tesla model 3 2023 in December 19 can I still claim the ev tax credit if I file?
December 19 2022
No, the tax credit only starts with vehicles purchased from 1/1/2023.
Please see this site:afdc.energy.gov/laws/electric-vehicles-for-tax-credit#/tab-2022
Tesla sales cap was met, so you can't get the credit.
The taxes are taken out of my check bi-weekly so if I’ve already paid $12,000 in taxes throughout the year. So if I get a tax credit reducing my tax liability from $12,000 to $4500. Would I see any of that money in my tax refund after filing taxes?
Are you asking about the EV credit? if so, you need to check line 18 of your tax return...what does that show as total tax? Is that above your EV credit?
Ty for your video.
I don’t get it. So I can only benefit if I owe money in tax after filing my tax. As someone that always get a refund, does this mean the tax credit is useless since I don’t owe the federal anyways?
Please see below - a new video that was posted later - this should answer your question.
th-cam.com/video/wZwwhdYT950/w-d-xo.html
Does this tax credit work the same way as the solar panel tax credit?
If I ordered
Tesla on August 17, 2022, and bought on February 2023, will I eligible for credit. $7500?
jaguar ipace works ?
So it would seem to benefit only those that typically owe after doing their taxes. For those that typically get a refund I'm assuming maximizing the deduction would require claiming more deductions that you normally would.
No, all one needs is to have $7,500 tax liability to be able to get your full credit. Doesn't have anything to do with people that are getting refund to NOT be able to get the credit.
@@Trust_but_Verify yeah. But if you paid 7500, then add normal dedications, medical, prescriptions, co-pays, charity, donations, good will, etc, you’d be way under 7500 and probably close to zero.
@@CurieBohr Typically now standard deduction will exceed the other ones unless you have outsized charitable donation (lump 3 years into 1 into charitable grant type of account). The $7,500 I was referring to is after all the deductions.
@@Trust_but_Verify agreed with you, but it is not what the CPA explained
@@huynhfamilychannel7021 The CPA wasn't wrong but the example he used showed folks that owed taxes. As @Trust but Verify explained, one just needs to have a total federal tax liability of >= $7500. If you advanced paid your taxes throughout the year from payroll deductions you can still claim the tax credit.
Quick question. If you are certain you wont owe anything the year you file...could you take advantage of the credit by maxing out (for a certain period of time) the dependants to build up the credit owed to then be relinquished?
I'm not sure I follow...can you rephrase your question? FYI - I'll be posting another video tomorrow regarding the EV credit.
Hey I have a question hopefully you can help me. Let’s say I made $200,000 last year on self employment and this year I made $50,000. Can I claim the credit on the $200,000? Thanks in advance! Bought a Model Y LR. 2023
I purchased a 2022 KIA in May 2022 and installed the charging system in my home in June. My tax refund for the vehicle is only giving me $4,500. Should I be getting the full $7,500?
If you remove the vehicle, what is your refund? Also, depends on your Kia - see the site below - not all Kias are elligble for the full $7,500 credit: www.fueleconomy.gov/feg/taxevb.shtml
what about commercial electric tax credit?
Hello,
My wife and I purchased and took delivery of our Tesla Model Y Performance in March of 2022. Do we qualify for any credits
You might be able to...I know the Tesla credits stopped at some point in 2022 because they reached their capacity. Here is a website you can use to check: afdc.energy.gov/laws/electric-vehicles-for-tax-credit
No, the tax credit only starts with vehicles purchased from 1/1/2023.
So if I bought my Tesla Model Y in 2023 and meet all the requirements, I will have to wait to file for the tax credit in 2024?
Correct...if you purchased and took ownership in 2023, you'll show this on your 2023 tax return, not 2022.
@@rob_cpa thank you for this.
What if you dont owe anything, instead you gona get some refund, do you get extra 7500 refund?
Look at page 2 of your 1040 - line 18 - is there a tax amount there? You may not owe anything because you had W2 withholding or made quarterly tax estimates.
I am a regular W-2 employee and every year I get a few thousand $ refund. Recently bought an EV that qualifies for the EV tax credit.
Should I file a new W-4 to reduce my withheld money so I can owe money to IRS? Or I probably didn’t understand the point of this video.
Thank you
No...the key is to look at line 18 of your tax return...if it shows a tax amount, then you can use the credit to reduce that tax amount.
the W4 is a different matter. excluding the EV credit, if you've been owing taxes each year, I suggest you change your W4 form.
Hi Rob, Thanks for the video and detailed explanation of Tax credit. I recently (Feb 2023) purchased Plug-in Hybrid car which is eligible for Federal Tax credit of $7,500. I had some issues with the car and planning to exchange the same with Dealer but this time I am going with full Gas (No Plug-in Hybrid). I am expecting my new car sometime in September 2023. Am I still eligible to apply for Tax Credit?
This applies to electric vehicles. How about Hybrid vehicles still qualify for tax credit in 2023 if I buy Car/SUV this year?
Some do...you should check out this website to see if your vehicle is listed:
afdc.energy.gov/laws/electric-vehicles-for-tax-credit#/tab-2023