Can anyone explain the Colorado state tax credit for EVs?

[dgpcolorado]

I read through all of this and I am afraid that none of this iv very relevant in Colorado. I am not 100% positive but I worked for Tesla and Colorado changed the EV tax credit to an "OR" so you could take the FTC OR the State but not both. So with the FTC being a higher credit it wont make much sense to take the CO credit. I hope this has been changed since 2010 but I am assuming not. If anyone has the exact wording please post it so everyone knows exactly what they can get I talked to a Nissan dealership and they were not very clear.

You are mistaken, please read FYI Income 9 Alternative Fuel Income Tax Credits [for others here, be aware that this is a new version with a revision date of 2/2012]. You will find:

For vehicles purchased on or after Jan. 1, 2010, the cost used in the computations described above must be reduced by any credits, grants, or rebates, including federal credits, grants, or rebates for which the purchaser is eligible. For example, if a person purchases a 2010 Honda Insight with an incremental price difference of $3,480 and receives a $3,500 rebate from the Federal CARS program, the cost difference for the computation of the state credit will be reduced to zero and no credit will be granted. These federal tax credits offset the incremental price difference of the vehicle not the income tax credit directly.

If you would like to read the law directly:

For tax year 2011: CRS 39-22-516. Tax credit for purchase of vehicles using alternative fuels

39-22-516 (2.5) (c) The amount of the credit allowed pursuant to this subsection (2.5) shall be an amount equal to the percentage, as set forth in paragraph (d) of this subsection (2.5), of the following:

(I) The difference between the actual cost incurred by such person during the tax year in purchasing a motor vehicle that uses an alternative fuel and the cost of the same motor vehicle that uses a traditional fuel or, if the same vehicle is not available, then the cost of the most similar vehicle, taking into account the model, make, engine size, and options, that uses a traditional fuel;

39-22-516 (2.6) (a) As used in this subsection (2.6), unless the context otherwise requires:

(I) "Actual cost incurred" means the actual cost paid by the purchaser for the vehicle, conversion, or idling reduction technologies. The actual cost paid shall be calculated as the net of any credits, grants, or rebates, including federal credits, grants, or rebates for which the purchaser is eligible, but excluding the credit specified in this subsection (2.6).

For tax year 2012: CRS 39-22-516.5. Tax credit for innovative motor vehicles

39-22-516.5 (1) As used in this section, unless the context otherwise requires:

(a) "Actual cost incurred" means the actual cost paid by the purchaser for the vehicle, conversion, or idling reduction technologies. The actual cost paid shall be calculated as the net of any credits, grants, or rebates, including federal credits, grants, or rebates for which the purchaser is eligible, but excluding the credit specified in this section.

39-22-516.5 (3) The amount of the credit allowed pursuant to this section shall be an amount equal to the percentage, as set forth in subsection (4) of this section, of the following:

(a) The difference between the actual cost incurred by such person during the tax year in purchasing a motor vehicle that uses an alternative fuel and the cost of the same motor vehicle that uses a traditional fuel or, if the same vehicle is not available, then the cost of the most similar vehicle, taking into account the model, make, engine size, and options, that uses a traditional fuel;

39-22-516.5 (6) If a credit authorized in this section exceeds the income tax due on the income of the taxpayer for the taxable year, the excess credit may not be carried forward and shall be refunded to the taxpayer.

 

[travisty]

I discussed how the Colorado tax credit works with my tax advisor and she said that it's either Federal or State; not both.

i.e. If you owe more than $7500 Fed then the state credit does not apply. If you owe less than $7500 then the state will pick up the difference up to $6000.

This seems counter to everything I've read and what I read in the colorado tax form. I thought it was in addition to the Federal: if you owe more than $7500 then the $4500 (or whatever it is with the 75% modifier) is added

i.e. I owe 11,500 I'll get 11,500 back with 500 rollover for next year

Maybe my tax advisor is confused how the Fed credit is subtracted from the incremental price? Maybe she thinks Fed return - state return?

As opposed to

85% of $8510 = $8510 x 0.85 = $7234

$7234 > $6000 so the tax credit is $6000

Or am i confused?

Thanks!

P.S. It looks like the URL for the tax document changed. Here's the new link FYI Income 9 Alternative Fuel Income Tax Credits

 

[dgpcolorado]

I discussed how the Colorado tax credit works with my tax advisor and she said that it's either Federal or State; not both.

i.e. If you owe more than $7500 Fed then the state credit does not apply. If you owe less than $7500 then the state will pick up the difference up to $6000.

This seems counter to everything I've read and what I read in the colorado tax form. I thought it was in addition to the Federal: if you owe more than $7500 then the $4500 (or whatever it is with the 75% modifier) is added

i.e. I owe 11,500 I'll get 11,500 back with 500 rollover for next year

Maybe my tax advisor is confused how the Fed credit is subtracted from the incremental price? Maybe she thinks Fed return - state return?

Or am i confused?

Thanks!

P.S. It looks like the URL for the tax document changed. Here's the new link FYI Income 9 Alternative Fuel Income Tax Credits

That doesn't make any sense. Even the new version of "FYI Income 9" specifically addresses the issue:

...These federal tax credits offset the incremental price difference of the vehicle not the income tax credit directly.

Can the DOR be any more clear than that? I don't understand why these tax advisors are having so much trouble with this. You can read the state law if you wish (I have links in my post above).

 

[travisty]

Thanks dgpcolorado.... I didn't think I was confused but when she said what she did I started doubting my understanding of how it worked.

P.S. The links in your previous posts are no longer valid. Here's the new link
http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheadername1=Content-Disposition&blobheadername2=Content-Type&blobheadervalue1=inline%3B+filename%3D%22Alternative+Fuel+Tax+Credit.pdf%22&blobheadervalue2=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1251759239122&ssbinary=true

 

[dgpcolorado]

Thanks dgpcolorado.... I didn't think I was confused but when she said what she did I started doubting my understanding of how it worked.

P.S. The links in your previous posts are no longer valid. Here's the new link
http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheadername1=Content-Disposition&blobheadername2=Content-Type&blobheadervalue1=inline%3B+filename%3D%22Alternative+Fuel+Tax+Credit.pdf%22&blobheadervalue2=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1251759239122&ssbinary=true

Your link is the the old 5/2011 version of FYI Income 9. My link above does work but it uses a pop-up and embedded pdf, so if you have a pop-up blocker enabled that might be the problem. The direct link to the 2/2012 revision: FYI Income 9 Alternative Fuel Income Tax Credits.

 

[dgpcolorado]

I tried to file my taxes on-line but found that there is a bug on the form 104CR, part II, pop-up, line 8: it won't allow a 2012 model year to be entered. So I had to print forms and file the old fashioned way. Makes it easier to submit the documentation though (requires a copy of the purchase "invoice", whatever that is, and the car registration).

 

[batzman]

I also would encourage you to register online to track that they have received your information, etc. https://www.colorado.gov/revenueonline/_/#1" onclick="window.open(this.href);return false;

Go to individual, etc. I also have noticed that mine was finally approved and they changed my EV Credit to the "approved amount" and not the full up to amount of $6,000 that we all want to see or get.

Just an FYI.

 

[dgpcolorado]

The Department of Revenue has created a new document to explain the 2012 (and beyond) Innovative Motor Vehicle Credit:
FYI Income 67
Innovative Motor Vehicle Credit

Nothing new but it makes for cleaner reading with the 2011 and earlier stuff stripped out. Same screwy numbers for the IPD of the LEAF.