EV Tax Credit - Recapture?

[Blaster]

I have a 2022 PRO purchased for personal use in late August, 2022. I don't plan on selling soon, but given the market I mentioned possibly selling in 12+ months with my accountant and they said that the IRS would recapture a portion of the $7500 credit if sold in the first 3 years.

This is the first I'm hearing about this, and have gotten some conflicting results in my googling, I generally like to assume my accountant is right but in this case would be happy to hear otherwise. And frankly most folks on this forum have stated otherwise.

Anyone have some specific information my accountant can reference if I sell in the next year?

Thanks for your help.

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[TaxmanHog]

IRS does not recover the credit, though some states do, not sure about VT EV rebates, but possibly that is what your accountant is concerned about.

In Mass (impacting me) I need to continue ownership for four years or be subjected to recapture of a portion of the rebate.

The IRS web page here does not mention anything about recapture, though if you dig deep into the issue, folks making a purchase solely to collect the credit then selling the vehicle quickly (ex. days to a couple weeks) expose themselves to scrutiny.

https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d

 

[VTbuckeye]

The only credit that I am aware of for EV in VT is through your utility. We missed last year by a couple hundred dollars 60k MSRP cap on our Volvo xc40 EV. We miss this year on the lightning with a 75k MSRP cap. There is also an income bonus if income is low enough. My mom is a partially retired CPA in VT if you have any questions.

 

[sotek2345]

Never heard of a hard time limit on the Federal credit. You just can't purchase "with the intent to resell".

NY has a 3 year clawback on their credit, but it is only $500 for the Lightning anyways and is prorated if you do sell or trade before then.

 

[Blaster]

The only credit that I am aware of for EV in VT is through your utility. We missed last year by a couple hundred dollars 60k MSRP cap on our Volvo xc40 EV. We miss this year on the lightning with a 75k MSRP cap. There is also an income bonus if income is low enough. My mom is a partially retired CPA in VT if you have any questions.

Thanks for the advice, we got a check through our local utility company without any restrictions. I don't qualify for any state rebates/credits.

My accountant was referring to the federal tax credit, but i have read that this was a detail in the code from 2014 that has since been removed. I've got plenty of evidence to show this was purchased for personal use, hell, I even traded in my ICE for it.

All I can tell is if I sell it for more than the purchase price I need to fill out a form and pay tax on the difference. I'll ping my accountant for details on this recapture if I do end up selling. There is nothing more reassuring than an accountant who gets tax code wrong...

Thanks again @VTbuckeye and @TaxmanHog

 

[monsterlag]

Thanks for the advice, we got a check through our local utility company without any restrictions. I don't qualify for any state rebates/credits.

My accountant was referring to the federal tax credit, but i have read that this was a detail in the code from 2014 that has since been removed. I've got plenty of evidence to show this was purchased for personal use, hell, I even traded in my ICE for it.

All I can tell is if I sell it for more than the purchase price I need to fill out a form and pay tax on the difference. I'll ping my accountant for details on this recapture if I do end up selling. There is nothing more reassuring than an accountant who gets tax code wrong...

Thanks again @VTbuckeye and @TaxmanHog

Bro if your accountant is still quoting you verbiage from 2014, it’s time to get a new accountant.

 

[Blaster]

Bro if your accountant is still quoting you verbiage from 2014, it’s time to get a new accountant.

Heard that.

 

[TaxmanHog]

All I can tell is if I sell it for more than the purchase price I need to fill out a form and pay tax on the difference. I'll ping my accountant for details on this recapture if I do end up selling. There is nothing more reassuring than an accountant who gets tax code wrong...

Yup, and Schedule D is your concern, as that would be a personal property cap gain, be mindful of short and long term holding periods and the applicable tax rate.

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