Curious about the EV tax credit.

[JCERRN]

So heres a question for you internet tax pros:

if I buy a 2025 CT in 2025, and it qualifies for the EV tax credit, I would have to claim it on my 2025 tax return right?

so does that mean my MAGI would have to be under $150k for 2025 to qualify? OR since the credit *May* go away in 2025, can I claim it on my 2024 return, since it hasn't been filed yet?

additionally, if the credit does go away in 2025, but AFTER I make a purchase, can I still claim the credit on my 2025 return if i otherwise qualify?

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[mongo]

So heres a question for you internet tax pros:

if I buy a 2025 CT in 2025, and it qualifies for the EV tax credit, I would have to claim it on my 2025 tax return right?

so does that mean my MAGI would have to be under $150k for 2025 to qualify? OR since the credit *May* go away in 2025, can I claim it on my 2024 return, since it hasn't been filed yet?

additionally, if the credit does go away in 2025, but AFTER I make a purchase, can I still claim the credit on my 2025 return if i otherwise qualify?

The credit income eligibility depends on MAGI in year of purchase or the previous year.

Take point of sale credit and there shouldn't be a way for them to revoke it later on law change.
Note, it's date of delivery, not date of order that is critical, and you need a 2025 version that is eligible.

 

[JCERRN]

The credit income eligibility depends on MAGI in year of purchase or the previous year.

Take point of sale credit and there shouldn't be a way for them to revoke it later on law change.
Note, it's date of delivery, not date of order that is critical, and you need a 2025 version that is eligible.

So Tesla offers a $7500 point of sale credit in lieu of the tax credit? Interesting.

what do you mean “MAGI in year of purchase or the previous year?” If i take the point of sale credit, does Tesla need to know my MAGI for 2024?

 

[JCERRN]

The credit income eligibility depends on MAGI in year of purchase or the previous year.

Take point of sale credit and there shouldn't be a way for them to revoke it later on law change.
Note, it's date of delivery, not date of order that is critical, and you need a 2025 version that is eligible.

My issue is my MAGI for 2024 right now is over the limit, but i can still put cash in an IRA for 2024 and bring it under the limit, i just need to know which year would count if i buy the car in early 2025

 

[SCTesla]

So Tesla offers a $7500 point of sale credit in lieu of the tax credit? Interesting.

They don't on the CT, yet.

 

[mongo]

My issue is my MAGI for 2024 right now is over the limit, but i can still put cash in an IRA for 2024 and bring it under the limit, i just need to know which year would count if i buy the car in early 2025

If you meet the threshold in either 2025 or 2024 you can claim the credit.
So if you can get 2024 below the limit you lock in eligibility regardless of what happens to income in 2025.

So Tesla offers a $7500 point of sale credit in lieu of the tax credit? Interesting.

Yes, once they start delivering qualifying vehicles. The point of sale is really cash to you from IRS/Treasury which you pass on to Tesla as downpayment. Technically you can keep the $7,500 instead, but that's probably not a better choice.

 

[SCTesla]

Yes, once they start delivering qualifying vehicles. The point of sale is really cash to you from IRS/Treasury which you pass on to Tesla as downpayment. Technically you can keep the $7,500 instead, but that's probably not a better choice.

They are delivering 2025s and telling people there is no POS credit at this point.

 

[mongo]

They are delivering 2025s and telling people there is no POS credit at this point.

Right, that's why I said qualifying and not 2025 ?

Squares ve rectangles
All qualifying Cybertrucks are 2025s, but not all 2025 Cybertrucks qualify

So wait for the order page to indicate eligibility.

 

[mongo]

They are delivering 2025s and telling people there is no POS credit at this point.

Which also means no tax time filing credit either, just to be explicit.

 

[JCERRN]

Which also means no tax time filing credit either, just to be explicit.

Wait that doesnt make sense. The EPA lists 2025 CT as eligible, as long as it meets criteria? (Price, purchaser income, model year)? Why would a 2025 ct awd priced at less than $80,000 not qualify?

 

[mongo]

Wait that doesnt make sense. The EPA lists 2025 CT as eligible, as long as it meets criteria? (Price, purchaser income, model year)? Why would a 2025 ct awd priced at less than $80,000 not qualify?

Not all 2025s are built the same. If it has a pack with cells with Chinese cathodes, it's ineligible for credit.
If it is built with Tesla DBE cathodes it can qualify (assuming the rest of the criteria are met).

 

[JCERRN]

Which also means no tax time filing credit either, just to be explicit.

Confirmed with Tesla- at least locally to me- the 2025 trucks they are currently selling for $79,990 DO NOT qualify for the $7500 tax credit, hence no POS credit option.

 

[Hgamble]

Also in order to have your tax return accepted when you file and claim the 7500 tax credit. Tesla must have submitted paperwork with your information and the Vin they sold to you at the time of sale. Not sure if there is a way around this if somebody messes up but id be curious to know if there is.

It would suck to lose 7500 due to a paperwork error

 

[eswimm]

If you meet the threshold in either 2025 or 2024 you can claim the credit.
So if you can get 2024 below the limit you lock in eligibility regardless of what happens to income in 2025.

I'm not sure that's correct. I believe the AGI in the year you're filing determines credit eligibility. I got the credit on a March 2024 Model Y purchase based on the qualifying in 2023 and expecting to qualify in 2024, but some unexpected gains I can't offset are going to disqualify me for 2024. I got the 7500 credit on the Model Y I purchased, but I'm going to have to repay that to the IRS.

 

[Cyberskis]

Federal tax credit has to be point of sale!

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