Intentionally pushing the tax credit, old fashioned way?

[chl]

As posted earlier the IRS has guidance for when you didn't get the 15400 from from the dealer. But it's based on the premise that the dealer reported and has the form but they just didn't give you a copy. That guidance doesn't address the situation when the dealer didn't report and the form was never generated in the first place.

It remains to be seen because as you say "it doesn't address the situation" in question.

But Ford sends the VINs of the vehicles that qualify to the IRS separately from the dealers.

So, if you can prove you bought one of those qualifying vehicles in the year you want the tax credit, why should the IRS deny it just because a dealership screwed up and didn't report it on a time of sale form?

It's a mere formality, isn't it?

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[chl]

Sigh...

Back in 2011 it WAS a tax liability test - now it is an income test to get the credit.

 

[RickLightning]

Back in 2011 it WAS a tax liability test - now it is an income test to get the credit.

Wrong. Incorrect. No.

Line 18
If you cannot use part of the credit because of the tax liability limit, the unused credit is lost. The unused credit cannot be carried back or forward to other tax years.

https://www.irs.gov/instructions/i8936

 

[TaxmanHog]

It remains to be seen because as you say "it doesn't address the situation" in question.

But Ford sends the VINs of the vehicles that qualify to the IRS separately from the dealers.

So, if you can prove you bought one of those qualifying vehicles in the year you want the tax credit, why should the IRS deny it just because a dealership screwed up and didn't report it on a time of sale form?

It's a mere formality, isn't it?

The manufacturers send VIN's of BEV's produced in one or multiple transmittals as they are released from the factory, I'd hope this is done weekly / monthly at the latest.

The dealer sends reports of vehicles sold to buyer indicating and HOPEFULLY matching the above list of the same vehicle(s) sold to retail customers indicating they attested they qualified and that they chose to transfer credit to dealer or not transfer credit.

If the timing isn't optimized I see the potential for sales matching issues when the dealer attempts to report and generate the customer a F15400

 

[TaxmanHog]

Committing perjury on the application for transfering the credit to the dealer when they knowingly do not qualify is a problem in my opinion.

 

[chl]

Committing perjury on the application for transfering the credit to the dealer when they knowingly do not qualify is a problem in my opinion.

About what, MAGI income? The IRS will get the money back from the liar when they file their tax return with the correct MAGI.

Since it is a federal form, probably a federal crime or two, fraud and perjury, theft...

Lying on any form related to taxes is a big no-no.
Lying on an application for credit when purchasing a vehicle is another big no-no.

I like that the IRS lets you use the income from the year you buy it, OR the income from the previous year.

To your point:

U.S. Treasury: Lots of People and Automakers Have Cheated EV Tax Credit
Government report claims people are taking $7500 credit for a plug-in electric car when their vehicles don't qualify....


https://www.caranddriver.com/news/a29400725/ev-tax-break-cheaters/

 

[chl]

U.S. Treasury: Lots of People and Automakers Have Cheated EV Tax Credit
Government report claims people are taking $7500 credit for a plug-in electric car when their vehicles don't qualify....

https://www.caranddriver.com/news/a29400725/ev-tax-break-cheaters/

" President Obama initiated the credit as part of the Energy Improvement and Extension Act of 2008 ... for any qualified vehicle entered into service starting in 2010. ... Very few cars met the IRS requirements in 2008, but more than a decade on, automakers have sold more than 1.2 million plug-ins eligible for the credit. Whereas just 378 claims were filed before 2013 ..."

Wow, I was one of the few who claimed it in 2011 when I bought my 2012 Nissan leaf?
I had no idea it was such an elite (small) group!

 

[JohnsonEJ23]

I purchased my truck back in April from Robert Horne Ford in the Phoenix area. They said they weren't setup to give me the tax credit at time of purchase but that I could do it at tax time. That was fine. Well then, a month or so later, I found out I was supposed to have received this form from them. I asked them about it and they said they didn't need to. I pushed and they said it didn't exist. I shared links, fliers, and even a power point presentation to teach dealers about this, all that I sourced from IRS.gov.

Many phone calls later, chats with Ford Mo Co, who confirmed the dealer should do it, but said they couldn't force them to, and many online reviews, news agency requests, Facebook page posts, and a BBB complaint (they didn't respond and I found out they have a D- rating) later, I have still yet to get a phone call back from their GM who I'm told the issue is escalated up to. I then filed a complaint with the Attorney General who has been going back and forth with them for a few months but still with no resolution.

Now that we're upon tax time, does anyone have any ideas to help me get this for my returns? I'm absolutely beside myself that a company can treat a customer this way and just flat out ignore them. While I have been a big pest to them, I've never been disrespectful or raised my voice with any of their staff and have given them no reason to keep ignoring me. I'm also wondering how many people they will have beating down their door if their tax credit gets denied... Anyone have any other ideas?

I am happy to report that, after months and months of phone calls, emails, social media posts, in addition to Attorney General, BBB, and FTC complaints, I FINALLY got Robert Horne Ford to figure out how to register for the IRS portal and submit my EV sale report!

My EV purchase now shows on my individual IRS portal and I'm expecting things to successfully process. It shows the day they submitted, but the placed in service date is the date of my purchase in April of 2024.

I hope everyone else can get there too!

 

[chl]

Wrong. Incorrect. No.

Line 18
If you cannot use part of the credit because of the tax liability limit, the unused credit is lost. The unused credit cannot be carried back or forward to other tax years.

https://www.irs.gov/instructions/i8936

I may not have been clear. I meant there is no apparent tax liability problem to get the full benefit of the $7500 tax credit.

Yes there is still a tax liability limit if you wait to claim the credit until filing your return - if you owe no taxes you get no benefit, if you owe $7600 or more you get the full benefit.

In other words, if you didn't transfer the credit at the time of purchase/sale, then the tax liability limit will reduce the benefit you can get to whatever your tax liability is but no more than $7500.

But consider the case where you transfer the credit to the dealership at the time of purchase.

If you do that then you get the full benefit of the $7500 and only have to worry about the income test (MAGI).

In the 2011 tax year, when I bought my Leaf, you could not get the tax credit up front at time of purchase by transferring it to the dealer, and if your tax liability was less than the credit amount, the credit was reduced, which happened to me. I don't recall an income test back then.

So, for buying the Nissan Leaf, I got the benefit of less than the full $7500.

If I could have used the credit up front I would have gotten the full benefit!

---
So, my point is, now is different because IF you take the credit up front, there is no tax liability requirement problem, only an income limit problem - if your Modified Adjusted Gross Income is too high you will/may have to pay back the IRS for the credit.

And, so far, I have not seen any requirement of repayment if your tax liability is less than the credit, only the Modified Adjusted Gross Income repayment requirement.

Caveat: I haven't run it through my tax program to see how it works out though.
---
As one analyst at Edmunds said: "If you don't owe any money on your income taxes, the only way to take advantage of the federal EV tax credit on a car is to transfer it to the dealership you're buying from. It then can be applied as a discount on the purchase."

" f your tax liability is $6,000, the credit would reduce your liability down to $0, but you wouldn’t get the remaining $1,500. Taxpayers can’t receive the difference as a refund from the IRS or carry it over to the next tax year.... If you elect to transfer the credit and for some reason do not meet certain qualifications (such as the MAGI limitation), you may have to repay the amount of the credit you received.... your MAGI for the year in which you place the EV in service—or for the previous tax year (whichever is less)—must fall below specific thresholds... MAGI for this purpose as adjusted gross income (AGI) increased by amounts excluded under IRC §§ 911, 931, or 933. ..."
---
I have not seen any requirement of repayment if your tax liability is less than the credit though.
---
Further while the dealer is not required to determine if the buyer's MAGI qualifies, "...taxpayers need to make an attestation to the dealer that they meet the threshold MAGI requirements. This distinction places the onus on taxpayers, not the dealers, to ensure they meet the income criteria before claiming the credit..." at the time of sale when transferring the credit.

Not sure how that is done, you'd think there would be a form to sign about that, but I do not remember if there was and I never got all my paperwork printed out (like to time of sale report the "Clean Vehicle Seller's Report").
---
The income determination is:

"Your modified adjusted gross income (AGI) for 2023 or 2024 is not more than $150,000 ($300,000 if married filing jointly or a qualifying surviving spouse; $225,000 if head of household). Use Part I of Form 8936 to figure your modified AGI. For additional information, see Part I—Modified Adjusted Gross Income (MAGI) Amount , later....
---
Repayment of credit.
If you purchased a new clean vehicle from a registered dealer and reduced the amount you paid at the time of sale by transferring the credit to the dealer and you no longer qualify for the credit when you file your tax return, you must repay the amount of the credit that you transferred to the dealer...."
---
As I said, and I hope it is the case, I have not seen any requirement of repayment if your tax liability is less than the credit.

Repayment may only be required if your income (Modified Adjusted Gross Income) does not qualify either the tax year you buy the EV, or the preceding year.

-----
NOTE: The IRS instructions say about repayment:

Repayment of credit.
If you purchased a new clean vehicle from a registered dealer and
reduced the amount you paid at the time of sale by transferring the credit
to the dealer and you no longer qualify for the credit when you file your
tax return, you must repay the amount the of the credit that you
transferred to the dealer.

So it all depends on what "no longer qualify for the credit" means. Does that only refer to the income test and the vehicle requirements? Or does it also refer to your tax liability at the time you file?

Time will tell.

 

[jamelski]

Currently In the last few steps of finalizing a Lightning, for which there’s 0% APR being offered.
As a result, we decided to not push the 7500 tax credit into the loan/lower the price of the car, but instead delay it until tax time to get that cash upfront. Obviously this increases the loan amount, but as the APR is low, we’d rather have the cash now.
Looking at the IRS website, they state the following:
“Seller must give you a time-of-sale report and a copy of the confirmation the IRS provides when it accepts the time-of-sale report submitted through IRS ECO”

But no information as to what these look like, what qualifies as these docs, or any other details.
Has anyone done this before? Any tips?
Thanks!

I’m with you. To me saving 125 bucks a month was not worth it. I really liked my 9k fed tax return thanks to the credit, next year won’t be so kind lol

 

[TaxmanHog]

I am happy to report that, after months and months of phone calls, emails, social media posts, in addition to Attorney General, BBB, and FTC complaints, I FINALLY got Robert Horne Ford to figure out how to register for the IRS portal and submit my EV sale report!

My EV purchase now shows on my individual IRS portal and I'm expecting things to successfully process. It shows the day they submitted, but the placed in service date is the date of my purchase in April of 2024.

I hope everyone else can get there too!

Awesome to hear this, you are the second report I've read in recent days that a "late" report is processable and that the E-File should validate, make sure your sales/inservice date and VIN are accurately recorded on the 8936/8936-A and hopefully it will sail through the system.

 

[bmwhitetx]

I may not have been clear. I meant there is no apparent tax liability problem to get the full benefit of the $7500 tax credit.

Yes there is still a tax liability limit if you wait to claim the credit until filing your return - if you owe no taxes you get no benefit, if you owe $7600 or more you get the full benefit.

In other words, if you didn't transfer the credit at the time of purchase/sale, then the tax liability limit will reduce the benefit you can get to whatever your tax liability is but no more than $7500.

But consider the case where you transfer the credit to the dealership at the time of purchase.

If you do that then you get the full benefit of the $7500 and only have to worry about the income test (MAGI).

In the 2011 tax year, when I bought my Leaf, you could not get the tax credit up front at time of purchase by transferring it to the dealer, and if your tax liability was less than the credit amount, the credit was reduced, which happened to me. I don't recall an income test back then.

So, for buying the Nissan Leaf, I got the benefit of less than the full $7500.

If I could have used the credit up front I would have gotten the full benefit!

---
So, my point is, now is different because IF you take the credit up front, there is no tax liability requirement problem, only an income limit problem - if your Modified Adjusted Gross Income is too high you will/may have to pay back the IRS for the credit.

And, so far, I have not seen any requirement of repayment if your tax liability is less than the credit, only the Modified Adjusted Gross Income repayment requirement.

Caveat: I haven't run it through my tax program to see how it works out though.
---
As one analyst at Edmunds said: "If you don't owe any money on your income taxes, the only way to take advantage of the federal EV tax credit on a car is to transfer it to the dealership you're buying from. It then can be applied as a discount on the purchase."

" f your tax liability is $6,000, the credit would reduce your liability down to $0, but you wouldn’t get the remaining $1,500. Taxpayers can’t receive the difference as a refund from the IRS or carry it over to the next tax year.... If you elect to transfer the credit and for some reason do not meet certain qualifications (such as the MAGI limitation), you may have to repay the amount of the credit you received.... your MAGI for the year in which you place the EV in service—or for the previous tax year (whichever is less)—must fall below specific thresholds... MAGI for this purpose as adjusted gross income (AGI) increased by amounts excluded under IRC §§ 911, 931, or 933. ..."
---
I have not seen any requirement of repayment if your tax liability is less than the credit though.
---
Further while the dealer is not required to determine if the buyer's MAGI qualifies, "...taxpayers need to make an attestation to the dealer that they meet the threshold MAGI requirements. This distinction places the onus on taxpayers, not the dealers, to ensure they meet the income criteria before claiming the credit..." at the time of sale when transferring the credit.

Not sure how that is done, you'd think there would be a form to sign about that, but I do not remember if there was and I never got all my paperwork printed out (like to time of sale report the "Clean Vehicle Seller's Report").
---
The income determination is:

"Your modified adjusted gross income (AGI) for 2023 or 2024 is not more than $150,000 ($300,000 if married filing jointly or a qualifying surviving spouse; $225,000 if head of household). Use Part I of Form 8936 to figure your modified AGI. For additional information, see Part I—Modified Adjusted Gross Income (MAGI) Amount , later....
---
Repayment of credit.
If you purchased a new clean vehicle from a registered dealer and reduced the amount you paid at the time of sale by transferring the credit to the dealer and you no longer qualify for the credit when you file your tax return, you must repay the amount of the credit that you transferred to the dealer...."
---
As I said, and I hope it is the case, I have not seen any requirement of repayment if your tax liability is less than the credit.

Repayment may only be required if your income (Modified Adjusted Gross Income) does not qualify either the tax year you buy the EV, or the preceding year.

-----
NOTE: The IRS instructions say about repayment:

Repayment of credit.
If you purchased a new clean vehicle from a registered dealer and
reduced the amount you paid at the time of sale by transferring the credit
to the dealer and you no longer qualify for the credit when you file your
tax return, you must repay the amount the of the credit that you
transferred to the dealer.

So it all depends on what "no longer qualify for the credit" means. Does that only refer to the income test and the vehicle requirements? Or does it also refer to your tax liability at the time you file?

Time will tell.

I asked Microsoft Copilot to summarize your post in 50 words or less:"

" Transfer the $7500 EV tax credit to the dealer at purchase to get full benefit, avoiding tax liability limits. Only income (MAGI) matters now. If MAGI is too high, repay credit. No repayment required if tax liability is less than credit. Dealer must ensure MAGI threshold is met at sale. "

Cool, literally the first time I used their service. . I think the only thing they missed is dealer doesn't "ensure". They require you to "attest".

 

[TaxmanHog]

I can make it simpler

[.... either the current or prior year .......]

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