[BlueDH]

To All ID.4 Owners:
Remember that to get the full $7500 rebate, you must OWE the IRS at least $7500.
If you only owe $3500 in taxes, then you will only get $3500 back.

Consult your tax advisor about getting your full $7500 back.

 

[Cowclops]

To All ID.4 Owners:
Remember that to get the full $7500 rebate, you must OWE the IRS at least $7500.
If you only owe $3500 in taxes, then you will only get $3500 back.

Consult your tax advisor about getting your full $7500 back.

To clarify, your tax liability has to be at least $7500. This isn't based on overage or underage on "what was withheld from your paycheck" but rather based entirely on how much money you made and what other credits you were planning to use. Just because you had a refund of $0 last year doesn't mean your tax liability wasn't >$7500.

For individuals with relatively normal taxes, thats about $60,000 a year income with no additional credits.

 

[BlueDH]

To clarify, your tax liability has to be at least $7500. This isn't based on overage or underage on "what was withheld from your paycheck" but rather based entirely on how much money you made and what other credits you were planning to use. Just because you had a refund of $0 last year doesn't mean your tax liability wasn't >$7500.

For individuals with relatively normal taxes, thats about $60,000 a year income with no additional credits.

Doesn't owe and liability mean the same thing?
I'm neither an accountant nor tax advisor, but a microelectronics EE (disclaimer).
If your tax liability (what you owe to Uncle Sam) is $3500, you will only get $3500 rebate.

 

[Cowclops]

Doesn't owe and liability mean the same thing?
I'm neither an accountant nor tax advisor, but a microelectronics EE (disclaimer).
If your tax liability (what you owe to Uncle Sam) is $3500, you will only get $3500 rebate.

When you file your taxes, you either get a refund or owe money based on whether your employer withheld less than your tax liability or if they withheld more than your tax liability. Lets say your emplyoer withheld $6000 but your actual tax liability was $7500. In that case, you would have to cut a check to the federal government for $1500. This is what you owed based on underpayment of taxes.,

However, if your employer withheld $6000 and your tax liability was 7500 but you also took the $7500 ev credit - you'd actually get a refund of $6000. The government owes YOU that money.

The owe vs refund parlance has more to do with how close you were to withholding exactly the right amount, whereas tax liability is simply what the government needs to get out of you to be square at the end of the year. If your employer withholds 9000 in federal income taxes, but your income taxes were supposed to be $8000 before the EV credit, you'd actually be getting $8500 back after you file.

 

[kens98]

Best way to explain is that this is a non refundable credit to be appied to your taxes owed before your contributions.

IE, If you owe before contributions, you get a credit of up to $7,500. In my case, I normally owe about $8k with about $9k of payroll tax collected which = $1k return. Since we qualify, our return would instead by $8,500. If you owe less before contributions then it would be less.

Please consult a tax advisor as someone expecting the full amount under x amount of income with multiple kids would not get anywhere close to the whole amount........

Easy solution is to make it a totally refundable credit but that turns into another nightmare political argument.

 

[Froggy]

I deliberately withdrew money from a tax deferred 457 account in order to increase my taxes with held for the year and to increase my down payment. I figured tax rates were as low as they were going to get. Don’t forget that installing a level 2 charger is also a 30% tax credit.

 

[artgpo]

The $7,500 federal income tax credit is just that, a credit, NOT a refund. It lowers your federal tax liability by UP TO $7,500. So, say the amount you owe is $8,400, after the credit you would owe $900. If you owe $3,200 you would owe $0 after $3,200 of the maximum $7,500 is applied. You DO NOT get the balance of the credit as a refund. It simply a credit on the amount you owe up to $7,500. It is only applicable to those who PURCHASE not LEASE. VW was offering the $7,500 as a Cap Cost Reduction when we leased our ID.4 at the end of April. So depending on your tax status you might get more if you lease as the entire $7,500 discounts the lease price cost.

 

[stowington]

Easy solution is to make it a totally refundable credit but that turns into another nightmare political argument.

Easiest solution is to make it a point of sale rebate as many states have done, rather than wrap it into the tax system at all.

 

[edid4]

I had been thinking of getting a smaller more efficient vehicle for daily driving vs the 3/4 ton diesel truck I tow my RV with for some time. What got me off of the fence for an EV was the $7,500.00 credit. I sold a piece of rental property in January 2021 with a tidy profit which will cost a pretty penny in capitol gain. $7,500 will make that check to IRS a bit easier to swallow.

 

[Tinman]

I deliberately withdrew money from a tax deferred 457 account in order to increase my taxes

If you're eligible to do a Roth conversion from a traditional IRA, you can tailor the taxable conversion amount to maximize the credit.

 

[kens98]

Don’t forget that installing a level 2 charger is also a 30% tax credit.

We also got a 50% credit from the utility company for both the install and the charger applied to our bill.

 

[Ray Noneya]

for all of those who won't owe the IRS or paid enough in taxes to get the full $7500 tax credit, you might want to take enough money out of an tax sheltered annuity, cash some savings bonds or cash in some other tax sheltered vehicle to raise your tax liability just enough to take advantage of it, by doing so you get that money without paying tax on it and use the credit.

 

[Salish.4]

To All ID.4 Owners:
Remember that to get the full $7500 rebate, you must OWE the IRS at least $7500.
If you only owe $3500 in taxes, then you will only get $3500 back.

Consult your tax advisor about getting your full $7500 back.

 

[J. Walter Weatherman]

A workaround for anyone that does not owe enough taxes (or just doesn’t want to deal with having to claim the credit) is to lease the car. The leasing company claims the tax credit, and the $7500 get credited to you as a capital cost reduction.

 

[Eric (Oregon)]

We are getting $500 from our city,,for a charger. Our state will kick in $2500..I don't think we can use the tax rebate. Ordered the Pro S AWD.

 

[Spin]

We are getting $500 from our city,,for a charger. Our state will kick in $2500..I don't think we can use the tax rebate. Ordered the Pro S AWD.

If you pay any Federal taxes at all you can apply the $7500 credit to that.

 

[Eric (Oregon)]

If you pay any Federal taxes at all you can apply the $7500 credit to that.

Yep. Don't know yet, but maybe we will pay some.
and then there is this>>>>
No EV tax credit if you earn more than $100,000, says US Senate
The amendment would also limit the tax credit to EVs that cost less than $40,000.
JONATHAN M. GITLIN - Today at undefined

No EV tax credit if you earn more than $100,000, says US Senate

The amendment would also limit the tax credit to EVs that cost less than $40,000.

arstechnica.com

 

[Spin]

If you purchased the car already you get the tax credit. They can't change the law after you made the deal.

 

[wtatun]

If you purchased the car already you get the tax credit. They can't change the law after you made the deal.

👆

That amendment that is mentioned (the $100K limit, etc) is a non-binding amendment to the infrastructure bill that was passed only by the Senate (the House still needs to pass) and is unlikely to pass the House AND, IF PASSED, would apply to new purchases AFTER a date in the future (date signed into law or other date listed specifically in the legislation). PLUS, it goes against what the current administration wants - more EVs.

The tax credit is alive and well as it has always been as of now.

 

[salant76]

👆

That amendment that is mentioned (the $100K limit, etc) is a non-binding amendment to the infrastructure bill that was passed only by the Senate (the House still needs to pass) and is unlikely to pass the House AND, IF PASSED, would apply to new purchases AFTER a date in the future (date signed into law or other date listed specifically in the legislation). PLUS, it goes against what the current administration wants - more EVs.

The tax credit is alive and well as it has always been as of now.

Let’s hope that it doesn’t pass. Seems similar to what UK did recent caping the max price of a new BEV on the low side to get any rebate. Funny how they treat a $40k+ BEV as a high price car. How much does a new Ford F-150 cost again?