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Tax Credit Questions

Tax Credit Questions

I understand that the $7500 federal credit is taken off at the year of purchase for that tax year.

Is the tax credit from the tax of the vehicle or is it from income tax? Or would you just get the credit regardless?

Do you have to have income or have paid tax for that year to get the credit? If so, why? and how much income do you have to make in order to get the credit?

What if there are two buyers? How does that get credited?

I just want to make sure I have no surprises and cover everything before we go through with the purchase.

Thank you for all of your help!

vp09 | April 9, 2017

Thanks Bill.

Pretty much, this year's taxes have me buried, all in all.

Bill_75D | April 10, 2017

I also got to use the $7500 credit but the 30% charger install credit was denied. I should have installed the charger in January since I got the car December 20th.

akikiki | April 10, 2017

RCorsa, Congratulations, Welcome to the family

aj | April 10, 2017

From what I have read, the credit for charging equipment is subject to the alternative minimum tax, so if you already have a number of deductions, you will likely be subject to the AMT, and will lose that credit. That is what happened to me this year.

stevenmaifert | April 10, 2017

The 30% tax credit for installing EV charging infrastructure expired at the end of 2016 and AFAIK has not been renewed. It was subject to reduction if you owed AMT. Here is a pretty good article detailing the current incentives by the Fed and the States: https://www.pluglesspower.com/learn/updated-2017-incentives-electric-veh...

reed_lewis | April 10, 2017

I installed a charging station, and because of AMT, the credit was completely wiped out.

Luckily, it would have only been about $270. I still got the $7500 for the car.

sabuson | April 10, 2017

Anybody know if the "date of purchase" can be the initial $1000 payment or it has to be the final full payment. For example if the initial decision to purchase was made in November 2016, but the final payment and delivery was completed in January 2017, can the deduction be claimed in 2016 tax return?

abtesla | April 10, 2017

The "date of purchase" is when the delivery was completed.

reed_lewis | April 10, 2017

As @abtesla says, it is when the vehicle is delivered or put into service.

stevenmaifert | April 10, 2017

https://www.irs.gov/pub/irs-pdf/f8936.pdf Line #3, which for most folks is the day they take delivery.

pastor2pbc | April 10, 2017

ok do I need to take anything with me to my accountant when I get my taxes done?

aj | April 10, 2017

You will need the basic info for the car: model, date purchased, and the VIN. Best to take the Tesla paperwork as it should have the info you need. Also, don't forget that you can deduct the sales tax above the standard amount if you don't deduct a state income tax.

stevenmaifert | April 11, 2017

aj makes a good point about the sales tax. I purchased both a Model S and a Leaf in tax year 2012 and made out much better deducting sales tax instead of CA income tax on my Federal tax return. Your accountant should be aware of this option, but here is a useful link: https://www.irs.gov/individuals/sales-tax-deduction-calculator You don't have to have saved the receipts for everything you purchased during the tax year. The calculator takes into account your income range and exemptions to figure a base amount to which you add the sales tax paid for big ticket items like a vehicle purchase. It's worth running the numbers to see which option works out better for you.

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