Forums

Fiscal cliff and the 7500 tax rebate: Will it be on the chopping block?

Fiscal cliff and the 7500 tax rebate: Will it be on the chopping block?

I'm just wondering about thoughts on the $7500 tax rebate in light of the "fiscal cliff" we keep hearing about. Bets on its survival?
I have my "paperwork" but with too many unknowns, I have big doubts and won't sign. It seems too many questions are going unanswered. (I don't expect Tesla to have the answer on the tax rebate.) I have not even been assigned a person to help me. No person has contacted me or made any effort to talk with me. I had called with questions and the person was going to be getting "right back to me." That was probably two months ago now. The car is hugely expensive; now if it's going to cost another $7500, I'm thinking I might just have to wait for the mid-priced car with more advanced battery function and more accessible service and charging. EVERYTHING just is starting to feel so out of reach/out of control with the half-assed way some things are being handled. The lack of answers is what is pushing me away. Tesla needs to realize that people will adjust to whatever the answer will be, but their "limbo" tactic is not something that I have patience for when I am to fork over $90 grand...or will it be 97,500? I had real hope that when the bulletin board went up, we might actually get definitive answers to questions...the only problem with that is that they are choosing not to answer certain questions. That's fine. I can choose not to buy their car.

cprenzl | 26 novembre 2012

I would assume that if we do reach the fiscal cliff it will be cut but, if you finalize your car now then you may escape the price raise. That is if you have a reservation and are about to finalize your car. With less then 50k electric cars going to be sold in 2012 (and phevs) it would only cost the government 375 million in tax credits. Remember gm is getting about 14 billion in tax breaks in the years to come, that is equal to about 1.86 million electric car tax credits, not to mention the bailout. Since Obama is pro green energy I would expect him to protect it, he's actually going for 10k credit.

noel.smyth | 26 novembre 2012

I have the same concern. Wish I could pay for the car this year to ensure I qualify but that's not an option. Just hoping it lasts this round as I'm already committed.

GLO | 26 novembre 2012

While I understand the concern, Obama's mandate for cleaner, greener cars makes me feel this is not something that will be cut or the govt. will have to back off the mandate. I am in for a 2013 credit too but am comitted now so will have to wait and see. The CA 2013 funding has been approved ($2500)...so at least those of us in CA should be good for 2013.

brewdr | 26 novembre 2012

Does anyone know if California is giving a $2500 state credit for 2012 as well as 2013. Has anyone applied for and been approved for the California rebate?

The website

http://energycenter.org/index.php/incentive-programs/clean-vehicle-rebat...

says there are funds left, but I haven't heard of anyone getting a rebate.

andrigtmiller | 26 novembre 2012

I never factored the tax ceedit into my decision to purchase the Model S. In the long run Tesla will have to be viable without it. You might want to consider changing your options if the price is to high without the tax credit. The range in price, depending on battery pack and options can easily be moved by more than the tax credit.

BYT | 26 novembre 2012

I have been approved for the $2,500 in CA

stevenmaifert | 26 novembre 2012

@brewdr - I bought a Leaf October 6. CA CVRP paperwork filed October 6. $2500 rebate check arrived November 5.

brewdr | 26 novembre 2012

Great news on the CA rebate. Looks like there is 10 million still in the pot. At least 4,000 cars by my calculations. Would theoretically be more, as some cars get less than $2,500. Hope to get my production 85kw performance before it runs out. Thanks for quick response stevenmaifert and BYT.

bsimoes | 27 novembre 2012

@andrigtmiller |

"I never factored the tax ceedit into my decision to purchase the Model S. In the long run Tesla will have to be viable without it. You might want to consider changing your options if the price is to high without the tax credit. The range in price, depending on battery pack and options can easily be moved by more than the tax credit."

Ironically, the only reason I need to get the 300 mi pack is so that I can get to Boston to have it serviced! That is, of course, if they will be allowed to build a service center there. Right now, the closest is actually NYC. I am one of the few who do not live anywhere near 100 miles, let alone 50 miles from a service center.

Getting Amped Again | 27 novembre 2012

Does anyone know of a website to "write your congressman/woman" about the necessity to keep the $7500 federal tax credit?

DouglasR | 27 novembre 2012

Every representative and senator has a website. Just google it under the name of your own rep.

Getting Amped Again | 27 novembre 2012

Thanks DouglasR but I'm really looking for a central location that all PEV proponents could visit and "vote" (can't think of a better word) to show their support for the tax credit. Then the website would magically send emails to all the senators and representatives, not just those from my state.

Is what I'm describing a Facebook page? Surely there is an automated way to email our congresspeople with a link to the page to show how much support there is for this.

Maybe it's a bad idea. What if the number of Likes end up being = Model S reservation holders + N, where N is a small number?

stevenmaifert | 27 novembre 2012

With either a tax increase or a cap on deductions in the wind, is this really a good time to draw our elected representatives attention to a generous tax credit enjoyed mainly by folks wealthy enough to afford a Model S? Might be a good idea to let this one lay in the weeds until someone actually proposes doing away with it.

olanmills | 27 novembre 2012

Either way, you'll have to fork over $97,500 when you buy the car. I'm assuming that you're not getting the car this year (since you haven't even ordered yet), so that means (assuming the rebate is still available) it will be 2014 before you will get that $7500 back, or else you might try reducing your withholdings so that you don't have as much income tax withheld over the course of the year, but either way, you're not going to see that full $7500 rebate soon.

If the difference between $90k and $98k is such a huge deal, then maybe you should order the 60kwh battery.

Getting Amped Again | 27 novembre 2012

@stevenmaifert - You could be right, but don't forget about the Leafs and Volts of the world. Let's hope they don't remove or phase out the credit for vehicles above a certain MSRP! That would be "progressive", like our tax system. Yeeecchhhhh.

stevenmaifert | 28 novembre 2012

@Getting Amped Soon - Haven't forgot about the Leafs. I bought one last month :) Already have the $2500 CA rebate in hand, and am waiting for Jan. 1 to file for the Federal credit. I'm with you on any future changes... P2860 and don't expect to see my Model S until after the first of the year.

bsimoes | 28 novembre 2012

Well, I just got the news I didn't want, but at least it is the official word, and for that I am grateful. It seems that any tire change, whether mounted on a rim or not, needs to be done at a Tesla service center according to the bulletin board post. This means changing any flat or just switching winter to summer tires and back again, would require a drive of 200(Boston)-300(NYC) miles one way. I'll sit on this information for a few days, but I think this means that my dream has been shattered, and I need to pull out of my reservation. I had been getting some pretty crazy answers like: Oh, rangers will come to you, borrow a local lift at a garage, and you'll be all set! I do wish Tesla would simplify some of the electronics. It seems to complicate issues that shouldn't have to be complicated, as in the tires and again with the door handles. Heart-broken in Vermont.

Brian H | 28 novembre 2012

bsimoes;
that was a pretty general posting; I suspect your "Ranger + local lift" scenario is the equivalent.

Vawlkus | 29 novembre 2012

It's only once for the TMPS to get sync'd up. Once those sensors are registered with the onboard computer you don't need to do it again.

mbcaffe | 29 novembre 2012

so do you get a &7500 tax credit for changing to winter tires.

bsimoes | 29 novembre 2012

"When you purchase a set of winter wheels and tires, a Tesla Service Technician will install them for free and reset the tire pressure monitoring system. If you prefer to have your winter wheel and tire set sent to your home, no problem, but you will still need to visit a Tesla Service center for tire pressure monitoring system resets, alignments and mounting."

@Brian--I don't understand your message.

@Vawlkus--The above is cut and pasted from the b-board. When it says that we will still need to visit service for resets, alignments and mounting, it sounds like we need to go in any time a tire is changed. This is what alarms me; To do this would take a weekend, cost a night's stay, and use almost one-tenth of my mileage alottment before needing servicing again, if the trip is done twice a year. Personally, I think that anyone who lives any distance from a service center needs to question what they are willing to do in order to have this car. If true, this is my line in the sand.

@mbcaffe--please don't kick me when I'm down.

mbcaffe | 29 novembre 2012

@bsimoes
I apologize. Just trying to get the thread back on track. However, you are right, Tesla will need to expand their network quickly to be a viable car company.

JackA | 29 novembre 2012

The federal tax credit will stay in effect. Check the US Department of Energy web-site: www.fueleconomy.gov for information. This credit is current law and has a specified phase out that is indexed to the number of vehicles produced. Remember this! A credit is used once during the tax year that the qualified vehicle is placed into service. You must have a federal tax liability of more than $7,500 in order to gain the entire advantage of this credit. It is not a rebate. If you end up owing $6,000 on your return you can use your credit and pay $0 more but the credit was only "worth" $6,000 to you.

mklcolvin | 29 novembre 2012

Does anyone know whether the federal (or state too, for that matter) tax credit is applied to the year that the car is purchased (if I were to pay for my Model S now), or when I take delivery (Jan-Feb)? I'd like to get my credit for the 2012 year, and if paying for it now would make that work, I'll do it. If there's no way to make that work I guess that I'll wait for delivery before paying.

Getting Amped Again | 29 novembre 2012

It's been posted that you can't pay in advance, plus the IRS considers that you "acquire" the vehicle when it is titled in your state.

From the IRS website (I cut some stuff out):

Section 3. SCOPE OF NOTICE

The new qualified plug-in electric drive motor vehicle credit determined under this notice applies to plug-in electric drive motor vehicles that—

(1) Are placed in service by the taxpayer in a taxable year beginning after December 31, 2009;

(2) Are acquired by the taxpayer after December 31, 2009; and

(3) Otherwise meet the requirements of § 30D.

Section 4. MEANING OF TERMS

.07 Acquired. A vehicle is not “acquired” before the date on which title to that vehicle passes under state law.

mklcolvin | 30 novembre 2012

Getting Amped Soon,

Thanks for the info. That tells me that I won't be getting my tax rebate until 2013 tax year. Oh well, maybe it'll get raised to $10K by then.

JackA | 30 novembre 2012

mklcolin: It is not a rebate! It is a credit if you do not have a federal tax liability that is greater than $7,500 you will not realize the full benefit of this credit... I know why all the EV and PHEV companies quote their prices as if everyone will get the full benefit of this federal tax credit; however, I think it is deceptive because many buyers will not gain the full amount because their federal tax liability will be less than $7,500.

runswithscissor... | 8 décembre 2012

If you can afford a Tesla, and have a tax liability under $7500, please speak up. I need to know what I am doing wrong.

Velo1 | 8 décembre 2012

^Speaking. I own a small consulting company and pay estimated taxes quarterly. Therefore, I can manipulate how much I pay, to within a certain extent and IRS guidelines. Usually, toward the 3rd and 4th Quarters of each year I can compare where my income may likely stand by year's relative to the past few years for the company, and determine what I need to be paying in taxes. It can be a double-edge sword at times, especially when we have corporate clients that wish to pre-pay by year's end for services to be performed in the next year. This gets the money in their current budget year, but kind of leaves me hanging with a big tax bill if I wasn't prepared for it.

riceuguy | 8 décembre 2012

To clarify, you don't have to OWE $7500 at the end of the year to get the credit. If you paid in$7500 or more in taxes during the year, you qualify even if you otherwise are getting a rebate. It just adds $7500 to your rebate amount.

DouglasR | 8 décembre 2012

@runs

Lots of ways to do it. Be retired but invested in tax exempt bonds. Have lots of income in 2012, but expect a loss in 2013. Have great wealth but no income. Make a lot of bad investments. Be in the 47% (many of them Romney's friends) who don't pay taxes.

Nick Kordich | 8 décembre 2012

For those who aren't eligible for the tax credit, I've seen elsewhere (perhaps here or on the TMC forums) the idea of doing a Roth IRA conversion. Basically, take the money in your conventional IRA (where you pay the tax when you withdraw), move the money over to a Roth IRA (where you pay the tax up front) and take the credit on the liability that this introduces.

Nick Kordich | 8 décembre 2012

I did not see a definitive answer on whether the EV tax credit could be affected by the 'fiscal cliff' so I did a little research and the answer is that refundable income tax credits are exempt from sequestration, so it isn't subject to an automatic cut.

I didn't spot it in the text of the act, but there's a Congressional Research Service report on special rules and exemptions for members of Congress. Pages 6 and 18 list individual income tax credits as exempt.

So, unless Congress actually does something, the tax credit is going to be applicable in 2013 and beyond. It is possible that this credit could be negotiated away as part of a deal, if Congress were to pass a budget in 2013, but that's true of any tax credit.

stuberman | 9 décembre 2012

Nick,

Thank you for reporting on your research. Your observations offer me some solace. Now I will hope that the credit doesn't get negotiated away.

joshuaeven | 28 décembre 2012

I have seen several mentions that this $7500 credit might be changed to a $10000 credit, or even an immediate 'rebate' taken off the purchase price of the EV. Can anyone shed some light on this? Thanks!!

Brian H | 28 décembre 2012

Would apply to only cars with MSRP <=$45K. Not relevant to Tesla (yet).

Brian H | 28 décembre 2012

typo: 'only to cars'

I suspect the thinking is to encourage the production of "affordable" EVs. Like the GenIII!

cprenzl | 28 décembre 2012

What about the immediate price reduction?

GDH | 28 décembre 2012

I actually called the FEDS two weeks ago and spoke to a nice lady who was actually looking into getting herself a Tesla....regarding the tax credit, it is not changing unless there is something already in the works to cancel it and there is not...so no matter what happens in the next few weeks the $7500 tax credit will still be intact. And no it's not going to $10K....I wish but no.

Last year I owed a little over $5K in taxes, so starting 1/1/13 I have lowered my 401K amount that is taken out of my check, I am only doing this for 2013 so I can get a better benefit for the tax credit. I am keeping my fingers crossed it works lmao. If not then I will not get the full benefit of the tax credit.

Brian H | 29 décembre 2012

I repeat, the $10K is not intended to increase the $7.5K appolicable to cars worth over $45K. To be quite clear, a $57.5K Tesla would net out at $50K, a $40K Leaf would net out at $30K.

Brian H | 29 décembre 2012

typo: applicable

adonbaker | 2 janvier 2013

Happy New Year to all... Just wanted to leave a quick note on the forum and let everyone know that late last night the House finally voted on the American Tax Payer Relief Act. As a result the $7500 Credit for alternative fuel vehicle refueling property (Sec. 30C) was extended into 2013. Yay!!!!!

fluxemag | 2 janvier 2013

Just a note of clarification. I believe the $7500 credit did not need to be extended, it just wasn't eliminated with the new bill. The credit for refueling property refers to (in our case) charging equipment installed at your main residence or business and it is 30% of the cost up to a max $1000 credit in the case of your home. There was also an extension of a tax credit for 2 or 3 wheel vehicles in the new bill.

So I'm pretty sure that means if you buy a HPWC and install a new circuit in your home, you could claim 30% of the cost as a tax credit.

riceuguy | 2 janvier 2013

Does anyone know if a NEMA 14-50 outlet counts towards the refueling credit? I know it does for my local utility's rebate program...

jat | 2 janvier 2013

@riceuguy - IANA(tax)L, but my understanding is if it is dedicated to only an EV, yes.

riceuguy | 2 janvier 2013

@Jat, Thanks, I'll definitely look into it. If the city covers half the cost (already got that in writing!) and I can get 30% back as a tax credit (wonder if that's 30% before or after rebate?!), it's a pretty sweet deal!

DTsea | 3 janvier 2013

riceuguy, just to be clear... A credit applies against your total tax liability. If you mean that you don't have to owe extra in April because of underpayment that's different, you are right there.

So if your total tax liability (forget refunds and all that) is >$7500 you can enjoy the credit. If it is less, you will only get credit up to total tax liability.

So, if you paid $6000 in the year in tax, and your 1040 says you owe exactly $6000 (before the credit) so normally you would get no refund, the credit would get that $6000 back... no more.