Curious about the EV tax credit.

[mongo]

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.

If you qualified in 2023 and took delivery in 2024, you're all set.
The law:

10) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME.— ‘‘(A) IN GENERAL.—No credit shall be allowed under subsection (a) for any taxable year if—
(i) the lesser of—

(I) the modified adjusted gross income of the taxpayer for such taxable year, or​

(II) the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds​

(ii) the threshold amount.

IRS:
https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

In addition, your modified adjusted gross income (AGI) may not exceed:

$300,000 for married couples filing jointly or a surviving spouse
$225,000 for heads of households
$150,000 for all other filers

You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your modified AGI is below the threshold in 1 of the 2 years, you can claim the credit.

Sponsored

 

[mongo]

Federal tax credit has to be point of sale!

No, you can wait, but the sale must be filed and approved by the IRS portal at time of sale:

If you do not transfer the credit, it is nonrefundable when you file your taxes, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years.

See also Topic H Q1:
https://www.irs.gov/pub/taxpros/fs-2024-26.pdf

 

[mongo]

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

Yeah, so make sure you get the confirmation form at delivery. Or better yet, take the credit at sale.

 

[yohst]

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 can put cash in IRA (ie you have no immediate need for it), and thereby lower your taxable income; do it - no matter whether there is a car/7500 involved.

 

[eswimm]

If you qualified in 2023 and took delivery in 2024, you're all set.
The law:


IRS:
https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

Interesting, thanks for the info.

 

[Mini2nut]

The Cybertruck needs the $7500 point of sale tax credit ASAP. According to this article CT sales appear to be slowing down. Tesla is cutting positions on the CT assembly line.

https://insideevs.com/news/746965/tesla-cybertruck-production-staff-cut/

 

[mitchell.glass]

I have friends that work at the plant in Austin. This is a fact. We need the credit,

Sponsored