Forums

Didn't Recieve my Full 2019 Tesla Tax credit - $1875

Didn't Recieve my Full 2019 Tesla Tax credit - $1875

I purchased a MS in September 2019. I am playing around in my tax software (Form 8936). I noticed that I only got $463 of the total $1875 available to me. The reasoning says it the "smaller amount of my other credits." Has this happened to anyone? I am putting in $1875 into the "Tentative Credit" block of the form. Am I doing anything wrong? Any guidance would be great...

blue adept | 12 February 2020

Try contacting a tax preparation agent as this is a mater of state level regulations and well beyond any influence of Tesla Motors itself.

rob | 12 February 2020

I haven't done mine yet... but I bet you started with the wrong number. If you start with the $7,500 then let the form do it's stuff you should wind up at the $1,875.

jordanrichard | 12 February 2020

Ok, one only will get the full credit if in fact their tax situation is as such to get it. In other words, if one’s tax liability is say $2,200, minus 1875, you would owe $325. If one’s tax liability is $1500, the $1875 wipes that out and you get back whatever was taken out of your paycheck for the year.

Too many people assume one, that they will get the whole credit amount. Two, that to calculated what their car really cost them with the credit, they deduct the full credit amount. $50,000 - $1875 = net cost $48,125

Techy James | 13 February 2020

This is a misconception about Tax Credits. To get the full $1875 you must have a Tax Liability where you would owe at $1875 for the year in taxes. If you have Children, School Loans, Home Loans, all these count to lower your tax liability. So if you have children and get Earned Income Credit or other Credits, then you may have the required Tax Liability. You can always have a Tax pro review everything and verify there was no errors in the documentation.

Nexxus | 20 February 2020

@Raymonperry1,

Like Rob said: You used the wrong figure to start with. Your $463 is 1/4 of the $1875, which is what you would expect if the starting price of the credit was that much. The actual starting price is the full $7500 credit, which was halved and then halved again to get to the $1875 or 1/4 of the $7500. Start with that on the form and you'll see the $1875 credit you were expecting.

GandalfTheGrey | 20 February 2020

What seems to have hit many of us is called the credit phaseout, and, as near as I can tell, it kicked in this month when Tesla sold its 200,000th vehicle in the US. Up until then everyone was getting the full final reduction in the incentive, i.e $1875. I planned my taxes around this amount, completed my taxes in TurboTax realizing a very small federal return. Then I eFiled. After a week, the IRS rejected my submission, and TurboTax said in essence, "We thought were done with the EV incentive portion (Form 8963), but it turns out we weren't, and we'll update the program. Log back in when you get the update and re-do the section and eFile again." I completed the updated portion of TurboTax today, and to my dismay I now only get a portion of the $1875. Here is what people get now:

- 100% of the $1875 if you purchased your car before Jan 1, 2019
- 50% if you purchased between Dec 31 2018 and July 1, 2019
- 25% if you purchased after June 30, 2019 and by Dec 31, 2019

So in my case I only get $463, and ended up with a $1200 tax bill after filing for the second time. From all I've been able to read, it seems no one really knew about this, not even TurboTax. I feel so blind-sighted that it seems that this could be taken to the courts if enough people were upset enough, though I don't hold out much hope that anything will ever be done about it. It does seem plain that the government doesn't really want to incentivize electric vehicles.

TeslaTap.com | 20 February 2020

@GandalfTheGrey - You have to start with $7500 THEN apply the 25% discount. Don't know if the Turbotax is at fault, but the IRS forms are confusing at best. You get 25% of $7500 for the June 30 to Dec 31 2019 period. You're starting with the wrong amount.

GandalfTheGrey | 20 February 2020

I would love to be wrong, but I submitted the full $1875 to the IRS the first time and it was rejected.