CT does or does not qualify for the $7,500 Federal Tax Credit as of 1/1/24?

[Gurule92]

there is no way around it

and this should have been clear to anyone once the pricing went live for either both Foundation trims, or the retail beast trim.


Though I do sometimes forget that the Tesla crowd hasn’t for some time paid as close attention to the credits as the rest of us have.

the Lightning crowd in particular, during first year production and while the new regime was being proposed/amended/passed, we’re forced to get agile or be left totally confused

But it’s settled law and process now


as for the suggestion that because of the credits the FS would depreciate more quickly because of this, however, is a bit unclear. except for those not paying attention, the FS AWD was always priced at an effective $27,500 more than A RETAIL AWD for someone who otherwise qualifies for the credit.

but the retail Beast never qualified, and the retail AWD wouldn’t qualify for anyone who didn’t qualify for the credit in the first place (due to income caps, etc.).

Meanwhile, when it comes to the AWD Foundation unit: someone who qualifies for the credit based on income, is already YOLO’ing financially to decide to buy a $100K highly depreciating BEV asset - especially in this interest environment.

Hell, they’re YOLO’ing enough to reach for a $79K highly depreciating asset.

Long story short: that no CT trim currently offered qualifies for the credit boils down to the following small bucket of relevance:

Those who qualify for the credit in the first place (based on income), considering an AWD model, and deciding between a regularly YOLO of $79K vs a hyper-YOLO of $100K.

I’d argue that *should* be a relatively small bucket (though never underestimate the American’s willingness to YOLO for a vehicle).

We can YOLO. A little easier in CO with that $5k on top of the feds. (When it happens)

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[cvalue13]

That federal tax credit isn’t the only one available. Either trim for the FS is eligible for the CCV $7500 credit.

is Tesla offering FS via lease?

if not, doesn’t the CCV reduce down to legit business acquisitions?

And since CCV for businesses are nonrefundable, you can't get back more on the credit than the business owes in taxes (which makes shenanigans more difficult).


but yes, if a person had a legit business, for which the vehicle would be 100% used only for business purposes, and the business had >$7,500 in annual tax liability - it’s a route

unless/until Tesla is offering FS leases?

 

[Old Pro]

Help me understand the income level factor and how it impacts the Federal Tax Credit,

 

[tenetke]

Help me understand the income level factor and how it impacts the Federal Tax Credit,

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

 

[Woodrick]

Help me understand the income level factor and how it impacts the Federal Tax Credit,

It doesn't

I made a longer response and deleted it, it gets confusing. Simply put, your tax must be at least the tax credit.
It is NOT the amount that you write the check for when sending to the IRS at end of year.

Except for retirees, if you can afford a new car, you probably make enough.

 

[Cybertruck2024]

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

I sprung for the beast, because I don't qualify for the rebate. I didn't want to spend $7,500 more for something people are getting cheaper. I had assumed all along I would get the AWD, but Uncle Sam convinced me otherwise.

 

[tenetke]

I sprung for the beast, because I don't qualify for the rebate. I didn't want to spend $7,500 more for something people are getting cheaper. I had assumed all along I would get the AWD, but Uncle Sam convinced me otherwise.

I don’t qualify for that rebate either but will for the $7500 ccv. I went awd because I’m good with a little more range and I’m fine with the comparable acceleration to my Lightning. Tires start to add up when you’re enjoying 0-60 in around ~4 secs
I’m about 6 months from buying my second set for my Platinum. Can’t imagine how often it would be with 2.6 to 60

 

[Cybertruck2024]

I don’t qualify for that rebate either but will for the $7500 ccv. I went awd because I’m good with a little more range and I’m fine with the comparable acceleration to my Lightning. Tires start to add up when you’re enjoying 0-60 in around ~4 secs
I’m about 6 months from buying my second set for my Platinum. Can’t imagine how often it would be with 2.6 to 60

I have two sets of wheels for my M3P, summer and winter. The winter look brand new after a few years, the summer already needed to be changed.

For the CT, I think I'm going to keep the AT for winter and pickup a set of AS for summer. The AS should be cheaper and will get me better range in the summer. I don't even want to see the price Tesla charges for a new set of the AT.

 

[tenetke]

I have two sets of wheels for my M3P, summer and winter. The winter look brand new after a few years, the summer already needed to be changed.

For the CT, I think I'm going to keep the AT for winter and pickup a set of AS for summer. The AS should be cheaper and will get me better range in the summer. I don't even want to see the price Tesla charges for a new set of the AT.

My plan was to keep AS on my Lightning and keep the CT with AT. Looking at the Goodyear tires in 285/65 r20 sizes I might switch to a Michelin LTX Platinum because they will probably weigh less but they’re close to $500 a tire.

 

[Rutrow]

Help me understand the income level factor and how it impacts the Federal Tax Credit,

It doesn't

I made a longer response and deleted it, it gets confusing. Simply put, your tax must be at least the tax credit.
It is NOT the amount that you write the check for when sending to the IRS at end of year.

Except for retirees, if you can afford a new car, you probably make enough.

Woodrick seems to be referencing the tax liability portion of the credit qualification, while Old Pro is asking about the income limit portion.

Woodrick is under the impression that, since the credit is "non-refundable" that you have to have at least $7500 of tax liability to take the credit at the Point of Sale. But, this isn't true. Take the credit, and the government has promised not to make you pay it back, even if your tax liability was inadequate. Sure, it sounds fishy, but the regulation was written that way so that lower income buyers could still reap the credit and legislators didn't have to be in favor of refundable tax credit to poor people.

Old Pro's question is how much income is too much to "keep" the credit. Single tax payers with an AGI (line 16 on 1040) of the year you purchase, or the prior year, whichever is lowest, below $150,000 can keep a PoS tax credit. Married couples filing jointly with AGI below $300,000 can keep the credit.

As to whether you should take the credit if the dealership allows you to, but you know your AGI will be too high?!? I'd say take it. You WILL have to pay it back next April, but you're essentially getting a one year zero interest loan from the IRS. A confounder that you should talk to your CPA about is if you get hit with an interest penalty for inadequate withholdings for the year. ??

 

[Johnelrod12]

We have an LLC and will be using the truck for business purposes. Can we purchase under the LLC and still get the $7,500 tax credit? Is there a price restriction for purchasing under an LLC? I looked up information online but couldn’t find the answers I was looking for.

 

[tenetke]

We have an LLC and will be using the truck for business purposes. Can we purchase under the LLC and still get the $7,500 tax credit? Is there a price restriction for purchasing under an LLC? I looked up information online but couldn’t find the answers I was looking for.

I’d ask your tax professional to be clear. Tesla is a qualified EV manufacturer for the ccv $7500 credit. There is no price cap. There is a weight difference where a vehicle that weighs over 14,000 lbs qualifies for a $40,000 credit. So if you’re getting a Tesla semi that’d work. One thing to consider is also using section 179 if you use your LLC as well. Tesla even has similar notices when you look at their pricing and purchase cash, lease, loan page.

 

[Rutrow]

We have an LLC and will be using the truck for business purposes. Can we purchase under the LLC and still get the $7,500 tax credit? Is there a price restriction for purchasing under an LLC? I looked up information online but couldn’t find the answers I was looking for.

https://www.irs.gov/credits-deductions/commercial-clean-vehicle-credit

 

[Woodrick]

We have an LLC and will be using the truck for business purposes. Can we purchase under the LLC and still get the $7,500 tax credit? Is there a price restriction for purchasing under an LLC? I looked up information online but couldn’t find the answers I was looking for.

Make sure that you don't forget that other things can get more expensive if you claim it as business instead of personal. Insurance being a big one.

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