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Treasury releases guidance for new EV tax credits

swajames

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that seems to work around the current requirement for the buyer to have enough of a tax liability to fully utilize the credit. it looks like it's effectively now just an income test, you confirm your eligibility at the point of sale and if you're subsequently found to have exceeded it when you file you would be required to pay it back. Much better system IMO, this will definitely help accelerate sales.
 

COrocket

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that seems to work around the current requirement for the buyer to have enough of a tax liability to fully utilize the credit. it looks like it's effectively now just an income test, you confirm your eligibility at the point of sale and if you're subsequently found to have exceeded it when you file you would be required to pay it back. Much better system IMO, this will definitely help accelerate sales.
Assuming dealerships don’t add a $7500 “market adjustment” to try and absorb the credit for themselves now that they are the ones getting a check from the government. The car market seems to be weakening and these markups have calmed down but it wouldn’t surprise me in the slightest.
 

F150ROD

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Assuming dealerships don’t add a $7500 “market adjustment” to try and absorb the credit for themselves now that they are the ones getting a check from the government. The car market seems to be weakening and these markups have calmed down but it wouldn’t surprise me in the slightest.
Their Market Adjustments aren’t working for these Trucks anymore. Ford will either throw more incentive money or just stop sending that dealer trucks. I mean some of these dealers are smoking some good stuff

Ford F-150 Lightning Treasury releases guidance for new EV tax credits IMG_0765


Ford F-150 Lightning Treasury releases guidance for new EV tax credits IMG_0764
 

TaxmanHog

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swajames

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Assuming dealerships don’t add a $7500 “market adjustment” to try and absorb the credit for themselves now that they are the ones getting a check from the government. The car market seems to be weakening and these markups have calmed down but it wouldn’t surprise me in the slightest.
oh absolutely. You have to think these are now (mostly) on the way out and people should know to just go to a different dealer but yes that wouldn't help.
 

TaxmanHog

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that seems to work around the current requirement for the buyer to have enough of a tax liability to fully utilize the credit. it looks like it's effectively now just an income test, you confirm your eligibility at the point of sale and if you're subsequently found to have exceeded it when you file you would be required to pay it back. Much better system IMO, this will definitely help accelerate sales.
I foresee a uptick with "unhappy people" who tried to get the credit and succeeded at the point of sale / retail level, and later determined not eligible, primarily because of modified AGI level, that said, they will have an extra assessment tacked onto their normal income tax bill to recover the funds.

Folks with incomes in the marginal range which are seasonally variable, might be prudent to not claim the retail POS credit during 2024 purchases, wait to the end of the year, upon filing their 2024 income tax return in the winter/spring of 2025 they will know for certain that they are entitled to it without risk of improper payout and repayment complications.

All that said, people are going to do what people do regardless of sound financial advice.
 

ddimit

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Their Market Adjustments aren’t working for these Trucks anymore. Ford will either throw more incentive money or just stop sending that dealer trucks. I mean some of these dealers are smoking some good stuff

IMG_0765.jpeg


IMG_0764.jpeg
Thats gonna sit awhile... maybe year ago they could have gotten that. Not today......
 

OtterJohn

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I should be taking delivery of ours in a couple weeks 🤞and if it's offered, I'll just wait until I file next February/March. I know where our income levels are, but I'd rather not do anything more than pay the dealer (not financing) and leave. :D
 

TaxmanHog

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I should be taking delivery of ours in a couple weeks 🤞and if it's offered, I'll just wait until I file next February/March. I know where our income levels are, but I'd rather not do anything more than pay the dealer (not financing) and leave. :D
Federal Tax Credit at the P.O.S won't be available until sales executed after 12/31/2023.
So, you will collect your credit while filing form 1040 ty-23 in the spring of 2024
 

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OtterJohn

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Federal Tax Credit at the P.O.S won't be available until sales executed after 12/31/2023.
So, you will collect your credit while filing form 1040 ty-23 in the spring of 2024
It's Friday and it's been a long week...reading comprehension is not my strong suit today, apparently! :D
 
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Another way to handle this is to immediately zero out your withholding until you get $7500 less taken out of your paycheck.

IF you know your purchase will meet the standard for this tax year.

Then you do of course have to remember to fix your withholding back to the correct level after you get your $7500.
That's not how it works. Your withholding has nothing to do with your liability.
 

Maquis

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Guys….starting in 2024, the tax credit is refundable. Tax liability doesn’t matter. You just need to buy a qualifying vehicle and fall within the income limits.
 

p52Ranch

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Considering the lack of reading comprehension that many dealers have, the IRS better make this a bullet proof process. I can envision a variety of scenarios where the dealer gets things goofed up and a customer gets stuck with an unplanned $7500 tax bill come April 15th.
I can also think of a few ways where someone could skirt the rules on who the real purchaser is to get the 7500 credit at purchase.
 

bmwhitetx

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Guys….starting in 2024, the tax credit is refundable. Tax liability doesn’t matter. You just need to buy a qualifying vehicle and fall within the income limits.
Where did you read that? Looking at the Revised Q&A that @TaxmanHog linked to it says:

Q7. Is the new clean vehicle credit refundable or able to be carried forward? (updated October 6, 2023)
A7. The new clean vehicle credit may only be claimed to the extent of reported tax due of the taxpayer and cannot be refunded. The new clean vehicle credit cannot be carried forward to the extent it is claimed for personal use on Form 1040, Schedule 3, Additional Credits and Payments. However, the new clean vehicle credit can be carried forward to the extent it is claimed for business use on Form 3800, General Business Credit, as otherwise appropriate. See Topic H FAQ 3 regarding transfer of the clean vehicle credits.

So maybe for business but not individuals.
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