I bought car on s corp and it's 100% use for business. Now if my corp doesn't have enough income(less than 10k), will i be still able to get $7500 tax credit?
It was for the year 2018 a 7500 tax liability credit. But only if you was to owe 7500. With 10k income you would not see that. I only used 4500 of the 7500 bar sue that was my tax liability.
You can't get credited more than you owe and the credit does not carry over into the next year.
I thought we were easily clear for the full $7500, but ended up with too many other deductions and credits, so we found a few large items that could be depreciated over 7 years in order to get the full credit.
"S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes."
@tew ms us, it's not quite that easy: https://www.irs.gov/businesses/small-businesses-self-employed/s-corporat...
S corporations MUST pay reasonable compensation to a shareholder-employee in return for services that the employee provides to the corporation BEFORE non-wage distributions may be made to the shareholder-employee. The amount of reasonable compensation will never exceed the amount received by the shareholder either directly or indirectly.
@samirtalati, My wife and I run two S-Corps, one LLC and one farm which falls under similar rules as an S-Corp. The taxes get very complicated. Consult with an accountant.
For example. My wife's LLC and S-Corp make enough for her to deduct personal medical insurance costs. My S corp and Farm in some years don't make enough equal to or greater than the whole cost of my medical insurance; therefore, I cannot deduct the full amount of my medical insurance costs because those costs exceed what the S-Corp and Farm profit collectively. I can only deduct an amount of my medical insurance equal to or less than profit less reasonable compensation.
I believe your S-Corp's $7500 tax credit for the purchase of the Tesla would be treated similarly.
Talk with an accountant. We use BDO.