California buyers expecting CA Rebate

California buyers expecting CA Rebate

I've looked into the CA Electric Vehicle Rebate program and currently is everyone aware that only the Roadster is on the Approved Vehicles list! The Model S is not on the list and does not currently qualify.

Has anyone heard from Tesla on why this might be? Are they awaiting approval? Have they petitioned the Model S to be included?

The more and more I've looked into the rebate and tax credits the more I realize this car will be expensive.

Im looking at the 230 mile option, with pano roof, $950 sound system, $3500 premium wheel and $1500 leather seats and realizing for the US Federal Tax credit, it's a credit meaning you will still have to come up with the $7500 at signing. This car with a 8.75% sales tax using either Fremont city or Los Angeles as the tax region comes out to $81,399.00!!

Please also know that the Federal credit works like this: If you owe $2500 to the government after you computed your taxes, you'll owe nothing with a $7500 credit, but you won't get the leftover $5000 in a rebate check if that's what you were expecting.
Additionally, if you owe nothing and almost always get a return, the tax credit will do nothing for you.
It seems as though it cannot be applied to lower your tax basis. I will be confirming this with my accountant but if anyone has info to the contrary please advise.

Any thoughts?


Scwins | 1 mai 2012

"6. It is important to note the tax credit will not, under any circumstances, exceed your tax liability. This means you can’t use the credit to generate a tax refund. In other words, if after preparing your taxes, you find you owe the government $7,500, and you bought a suitably qualifying vehicle in 2011, you’re in luck; your tax bill will be reduced to zero.

However, if you owe say, $2,500, that $2,500 will be the total amount of your tax credit and your tax bill will be reduced to zero. The government isn’t going to then turn around and refund you the other $5,000. Similarly, if you owe no taxes at all, you won’t get the electric car tax credit, nor will you be permitted to roll it, (or as in the scenario above, the $5,000 “balance”) into your potential 2012 tax liability.

However, if you’re a person who typically qualifies for a refund, there is a nice little loophole you could slip through. You could still technically take advantage of the $7,500 credit by leasing a fully qualifying electric or plug-in hybrid vehicle instead of buying it. Remember, most leasing companies automatically apply the credit toward the capital reduction payment required to establish the lease. This strategy enables you to get the benefit of the electric car tax credit, regardless of your potential tax liability

Mark K | 1 mai 2012

Just to be sure were are talking the same thing:

How much you've already paid in for estimated taxes has no effect.

The only thing that matters is that your total tax bill for the year when you complete the purchase is at least 7,500 in federal taxes. If it is, you will get the full credit.

If you already paid in estimated taxes in excess of 7.5k federal, you'll get a check back from Uncle Sam.

If you still owed some money, it will reduce your total payments by 7.5k, so the amount you send in would be less.

Remember that a credit is different from a tax deduction, and it's actually far superior.

Example: you earn 100k and have a deduction for 5k. Then your adjusted income base is 95k. If your tax rate was 30 %, you save 1.5k in tax, or 30% of the deduction.

A tax credit of 5k is much better. Let's say you earned 100k and owed 30k federal. After a 5k credit, you only owe 25k, so you save the whole credit amount.

masterjrm | 2 mai 2012

I did not realize that was how this federal tax credit works. I thought it was more like the first time home buyers tax credit that adds to your return.

The unfortunate thing is that I am P564 and will have been deployed almost the entire year. Since I am such a low P number I would recieve my car this year. However, becuase I would have been deployed this entire year I would have no tax liability and therfore not receive this tax credit.

David70 | 2 mai 2012

My tax liability has been anywhere near $7500 in the last 4 years. That's why I hope they come up with the dealer rebate version of the credit.

If you're out of country almost the entire year, you might want to delay delivery until after the end of this year.

David70 | 2 mai 2012

P.S. That is nowhere near $7500.

masterjrm | 2 mai 2012

In order to get the value I was expecting / wanting I will have to wait until 2013. I've already been waiting since Mar 2009.

The dealer rebate would be very helpful.

I'm not sure what my liability would be if was in the U.S. the entire year. I've been deployed 1Jan07-26Mar08, 17Sep09-12Sep10, and 5Nov11-?Nov12. So I haven't had a full year in the states to assess liability since 2006.

Brian H | 4 mai 2012

I think we see a need or use for the transferability option.

Scwins | 9 mai 2012

Mark K,
I don't think you are correct if I understand your description.

This is very simple.
If you owe taxes at the end of the year, you will be able to knock off what you owe up to $7500.

If you typically get a return/refund, this credit will not help you at all.
The government is NOT going to give you a check for $7500 if you have no tax liability.

Another example: if you owe $2500 at the end of the year, this credit will wipe out that tax bill, BUT WILL NOT give you back another $5000 in the form of a check to equal $7500.

Brant | 9 mai 2012

I think the confusion here is the definition of "owe taxes at the end of the year". Anyone who makes a decent income is going to "owe taxes" to the feds. Usually in excess of $7500 I would imagine. I know I give them plenty more than that each year.
If not please tell me who your accountant is.
I thinks Mark K's point is that if you have withheld adequate income throughout the year to cover that tax bill, in effect pre-paying that tax bill, this will not effect your ability to use the $7500 tax credit.

TikiMan | 9 mai 2012

LOL! In order to afford this car, I better be paying more than $7,500.00 in taxes!

Otherwise, Hell, I'll take the Ferrari Enzo, and a new Range Rover Sport.

BYT | 10 mai 2012

I changed my W-2's last year to accommodate the higher taxes I was paying when I moved retirement money from my company held accounts to a Traditional IRA then to a Roth IRA. I know I will owe a lot more then $7,500 in taxes to both State and Federal but because of the much higher deductions I have taken out of each check of way of my W-2, I generally always get a little refund, not much but still a refund. I'll definitely be e-mailing my Tax guy on this one!

BruceR | 10 mai 2012

Mark has it exactly. It is Mr. Scwins who does not have it correct. A tax CREDIT is added to your normal prepayments during the year (from withholdings or estimated payments). This unfortunately currently happens when you do your calculations come April of the following year. Your tax liability is your total amount due. As long as your liability is larger than your credit, you can use the entire credit. How much you get back is then just subtracting your credit and prepaid estimated tax total from your liability. (Hopefully a negative number and you are getting money back.)

I'll say it again on this thread as I've mentioned before: STOP getting your tax advice from blogs. Hell, don't take my word for it either! (Even though I've done taxes for a living in years past.) Go see a tax advisor if you have any questions on your specific situation.

ModelS3P | 10 mai 2012

The federal rebate has nothing to do with whether or not you owe money or receive money when you file your taxes, it only looks at your tax liability (line 46 on 1040). Assuming no one-off credits in lines 47-50 of 1040, if line 46 is greater than $7,500, then you get the full $7,500 rebate for the electric car purchase. This rebate may reduce the amount you owe, it may allow you to go from owing to receiving, or it may increase the amount you are due (all depends on how much federal tax was paid during the year).

Look at IRS Form 8936 if you want to walk through the calculation for yourself.

BYT | 10 mai 2012

Here is the reply from my tax guy in my case, of course like stated before, you all should consult the one you trust to do yours as well:

"There are things the Gvt does well and things it does very badly. I'm a skeptic. If a Gvt performs; that's fine. If it doesn't, I expect it and can only blame myself for trusting.

Here's the point regarding your car: The latest info on the subject is IRS Bulletin 2009-48. You already know the basics; the amount of the credit and the qualifying vehicle, etc.

Here's the bottom line: Purchaser's Reliance: "A purchaser of a motor vehicle may rely on the manufacturer's certification concerning the vehicle and the amount of the credit allowable with respect to the vehicle. The purchaser may claim a credit in the certified amount."

Here's the "however": However, "The acknowledgment that the Service provides for a certification is not a determination that a vehicle qualifies for the credit or that the amount of the credit is correct.. The Service (IRS) may, upon examination determine that the vehicle is not a new qualified plug-in electric drive motor vehicle or that the amount of the credit determined by the manufacturer with respect to the vehicle is incorrect."

It goes on to say that this could happen if the Mfr makes an error or files a wrong report. And if this happens the Mfr has to make good with the buyers.

It's not exactly a throw of the dice; but it's a bit of a gamble with a lot of reliance on the Mfr's certification. By the way, to get certification the Mfr has to meet 20 tests----according to this Bulletin.

Let's see if I understand what you mean by..."if you don't owe the Fed $7,500 that you can't get a return from them on the $7,500." This credit is not refundable. This is how it works. Let's say your tax is $19,000 and your withholding is $21,000. The credit would reduce your tax to $11,500 (19,000 - 7,500)so you would get a refund of $9,500 (21,000 - 11,500) instead of $2,000----so no change is required on your W2.

I hope this answers your question and that this info is helpful."

I did find this helpful and did reiterate what some of you said above. Again, make sure to check with your guy as the government will not forgive you if you try to pull something you aren't supposed to... ;)

JohnEC | 10 mai 2012

I think the fed tax credit thing has been beaten to death, but does anyone have an answer on the Ca rebate part of the original post? Will TM get the Model S on the “approved vehicle list” for the CA rebate?

jerry3 | 11 mai 2012

If it doesn't, Jerry Brown won't be invited to speak at the next unveiling.

BYT | 11 mai 2012

Are you all saying that there is an additional credit from the state (California) above and beyond the $7,500 from the FED possibly??

jerry3 | 11 mai 2012

Yes. Some states, like CA, have additional incentives. Others just have invectives.

stevenmaifert | 11 mai 2012

The CA Clean Vehicle Rebate Project is funded by the California Environmental Protection Agency's Air Resources Board and administered statewide by the California Center for Sustainable Energy located in San Diego. It's a local call for me, so I called them yesterday afternoon and asked if TM had applied to add the Model S to the list of CVRP Eligible Vehicles: The gentleman I spoke with said he thought they had. I asked him if he could confirm and get back to me. If he does, I will post the response.

BYT | 13 mai 2012

I look forward to hearing about it and thanks stevenmaifert

stevenmaifert | 16 mai 2012

Happy to report the Model S has been added to the CA Clean Vehicle Rebate Project list of CVRP Eligible Vehicles $2500 for the 85kWh battery version. No mention of the other battery sizes, but since the rebate amount is based on battery capacity, I would think the others would qualify for something. Their number is: 858-244-1177.

BYT | 17 mai 2012

Cool! Thanks for sharing!