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IRS EV Credit

IRS EV Credit

Just a heads up. Filed my 2019 Federal Tax Return and what a surprise. We purchased our Model 3 in Sept 2019. We were expecting a tax credit of $1875 for the vehicle. Tesla tax credits are being phased out. With that in mind be prepared for the IRS to reduce the $1875 by 25%. IRS Form 8936 line 4B explains the reduction:

Line 4b
Enter 100% unless the vehicle was a vehicle with at least four wheels manufactured by Tesla or General Motors (Chevrolet Bolt EV, etc.).

Tesla. Enter the following percentage if the vehicle was manufactured by Tesla.
100% if you purchased it before January 1, 2019.
50% if you purchased it after December 31, 2018, but before July 1, 2019.
25% if you purchased it after June 30, 2019, but before January 1, 2020.

I went from a refund to paying. Oh joy!!

TeslaTap.com | 20 februari 2020

The form could be written better. You need to start with $7500. Then the 25% applies to $7500, giving you $1875 credit. Seems a few people are confused about this. You can use a tax pro if you're still confused.

TabascoGuy | 20 februari 2020

The 25% applies to the full credit.

$7500 x 25% = $1875

TabascoGuy | 20 februari 2020

ninja'd by TT :-)