Electric drive vehicle credit 8936 decreased/rejected by IRS

[oakwcj]

The IRS may have taken forever to process these claims, but I can't say they were slow in sending me a 1099 for the interest they paid during the delay. I got mine in the mail today. It says, in part: "The amount of interest paid or credited to you in the calendar year shown is on an overpayment of federal tax." Not really accurate, but at least they did pay interest.

 

[packrat09]

The IRS may have taken forever to process these claims, but I can't say they were slow in sending me a 1099 for the interest they paid during the delay. I got mine in the mail today. It says, in part: "The amount of interest paid or credited to you in the calendar year shown is on an overpayment of federal tax." Not really accurate, but at least they did pay interest.

Same here. BTW, mine was the right amount for 3% interest from April 17th to Dec. 10th-ish.

 

[gascant]

The IRS may have taken forever to process these claims, but I can't say they were slow in sending me a 1099 for the interest they paid during the delay. I got mine in the mail today. It says, in part: "The amount of interest paid or credited to you in the calendar year shown is on an overpayment of federal tax." Not really accurate, but at least they did pay interest.

Same here. BTW, mine was the right amount for 3% interest from April 17th to Dec. 10th-ish.

+1

 

[GoingGreener]

The IRS may have taken forever to process these claims, but I can't say they were slow in sending me a 1099 for the interest they paid during the delay. I got mine in the mail today. It says, in part: "The amount of interest paid or credited to you in the calendar year shown is on an overpayment of federal tax." Not really accurate, but at least they did pay interest.

Same here. BTW, mine was the right amount for 3% interest from April 17th to Dec. 10th-ish.

+1

Using the Turbo Tax software to file our 2012 returns.
Does the IRS interest paid to us for the above go into "Box 1" (like regular bank interest received)?
I see a "Box 3" on the Turbo Tax form for "U.S. Treasury Int." But maybe that's investment related.

 

[mattyc7]

2012 buyer here, and just this week we got slammed with the AMT / TMT stuff that you all had. Thanks for all the postings, this will help immensely.

I've already contacted Nissan and will look into Congressman, TurboTax audit defense and taxpayer advocate.

Questions:

1) Did anyone on this thread ever NOT get the full credit?
2) The section of the tax code you cite references a complication if you have a foreign tax credit. We do, but it is tiny (~$20). What is the implication of that?
3) It also references a complication if you have credits under "Subpart A" - what sort of credits are these?

 

[Weatherman]

2012 buyer here, and just this week we got slammed with the AMT / TMT stuff that you all had. Thanks for all the postings, this will help immensely.

I've already contacted Nissan and will look into Congressman, TurboTax audit defense and taxpayer advocate.

Questions:

1) Did anyone on this thread ever NOT get the full credit?
2) The section of the tax code you cite references a complication if you have a foreign tax credit. We do, but it is tiny (~$20). What is the implication of that?
3) It also references a complication if you have credits under "Subpart A" - what sort of credits are these?

Basically, the idea is that, if you have other tax credits, they get applied first. Here are the examples under subpart A:

http://www.law.cornell.edu/uscode/text/26/subtitle-A/chapter-1/subchapter-A/part-IV/subpart-A" onclick="window.open(this.href);return false;

Whatever is left over can apply to the EV credit. If you don't have any other significant tax credits, or your tax liability is sufficiently large to cover them all, you don't have to be concerned.

 

[mattyc7]

2012 buyer here, and just this week we got slammed with the AMT / TMT stuff that you all had. Thanks for all the postings, this will help immensely.

I've already contacted Nissan and will look into Congressman, TurboTax audit defense and taxpayer advocate.

Questions:

1) Did anyone on this thread ever NOT get the full credit?
2) The section of the tax code you cite references a complication if you have a foreign tax credit. We do, but it is tiny (~$20). What is the implication of that?
3) It also references a complication if you have credits under "Subpart A" - what sort of credits are these?

Basically, the idea is that, if you have other tax credits, they get applied first. Here are the examples under subpart A:

http://www.law.cornell.edu/uscode/text/26/subtitle-A/chapter-1/subchapter-A/part-IV/subpart-A" onclick="window.open(this.href);return false;

Whatever is left over can apply to the EV credit. If you don't have any other significant tax credits, or your tax liability is sufficiently large to cover them all, you don't have to be concerned.

Right, so if I have the $7,500 K EV Credit and $7,500 K in other credits (I don't think I even do), but my tax liability before credits is $16 K, I STILL get $15 K knocked off, right?

 

[dca]

Just a quick note for those of you who purchased in 2013 and are filing 2013 taxes now...(or possibly qualify for a modification of a prev years' return). As discussed in another thread, HR Block S/W is not supporting this form (again), so I got my money back from them.

But, once edited, I was hitting the tax credit limit. The only other tax credit I can claim this year is for my 3 kids (Child Tax Credit). Please note that there is an "Additional Child Tax Credit" that involves a separate worksheet and set of instructions and requirements. One of the req'ts is that you must have 3 (or more) kids. Anyway, bottom line is that there is another line below the standard credits section of the 1040 where you can add back in the tax credit money which you lost on Child Tax Credit due to claiming the AFV credit.

I have not received my return yet, but it is currently being processed - and I hope I don't get the scrutiny that some have reported here under the other thread referenced above...but wanted to try to let people know about this. Also, for those of you who trust your CPA / tax guy to be 100% accurate and know this may also be assuming too much. I would check yourself, or ask if you qualify for this ACTC if you are getting shorted on the $7500 AFV credit.

FYI,
dca

6-Mar-2014 UPDATE: The IRS rejected my entry for the Add'l Child Tax Credit, and instead railed me at my total tax owed regarding how much I can get back. They say the check is in the mail. Took them 4-6 wks to come to this conclusion on my mail-in tax return.

I am interested if it is a math/application error or some fine print in their rules that say you can't claim the add'l credit against an EV/AFV credit. Oh well...not sure I want to fight it any farther than this...would have been nice to pull the Traditional -> Roth IRA conversion trick had I known, but I got the car only 6 business days before end of 2013.

 

[yortch]

Here's my update for my 2013 tax return status:

01/30/2014: e-Filed using TaxACT
01/31/2014: return accepted by IRS
02/24/2014: refund accepted by IRS with the following notice:

We made changes to your tax return that changed the amount of your refund.
You will receive a notice that explains the changes we made to your tax return. You should receive your notice and the balance of your refund ($ amount submitted minus $7,500 credit), by March 3, 2014.
For more details about the changes we made to your tax return, please select the "Details" button.

Clicking the "Details" button I get:

Math Error Details
Detailed information concerning a change we made to your tax return is not available here.
Please call and talk to one of our representatives or wait for the notice we sent you for more information.

After calling one of the representatives I got basically the same information available on the website and they were not unable to provide any additional details stating that those will be provided on the notice mailed.

While I anxiously await the notice in the mail I found this very detailed and helpful thread. I've double checked the math, values entered so I doubt that this is Math error. My best guess is that this may have been rejected due to AMT/TMT. If that's the case I'm relieved to find that this credit cannot be rejected due to AMT.

I found the detailed explanation by Weatherman referring to Section 30D(c)(2)(b) of the tax code as the best defense for this. However for 2013, that section appears to have been amended, and there is no longer a (b) clause in 30D(c)(2): http://www.law.cornell.edu/uscode/text/26/30D

(c) Application with other credits
(1) Business credit treated as part of general business credit
So much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38 (b) for such taxable year (and not allowed under subsection (a)).
(2) Personal credit
For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.

On the contrary, it appears the restrictions have been removed, which I find surprising because that would mean that you could claim the full credit even if your tax liability was less than $7,500? I'm afraid I'm missing something here, but I do not see any new restrictions pertaining to TMT or AMT. Any thoughts on this 2013 update?

I will update this thread once I received my notice on the mail.

 

[Weatherman]

The definition of limitations on tax liability has been moved to section 26, under here:

http://www.law.cornell.edu/uscode/text/26/subtitle-A/chapter-1/subchapter-A/part-IV/subpart-A" onclick="window.open(this.href);return false;


(a) Limitation based on amount of tax
The aggregate amount of credits allowed by this subpart for the taxable year shall not exceed the sum of—

(1) the taxpayer’s regular tax liability for the taxable year reduced by the foreign tax credit allowable under section 27 (a), and
(2) the tax imposed by section 55 (a) for the taxable year.



This text is very close to the 2012 tax law, but now, appears to apply to all nonrefundable personal tax credits. As with the 2012 law, unless it specifically states the tax credit is limited by the AMT, it is not.

 

[kmp647]

after owning my Leaf 2.5 years (its a lease) and reading these stories I am still not comfortable buying my next EV as far as taxes are concerned

too concerned i'll get jammed on my taxes somehow. what a joke.

good luck to all the BMW customers who have no real lease option for the full $7500
the 2 choices are lease and take the partial $4875 credit from BMW
or
buy and take your chances with the IRS on the credit of $7500

wonder if there are horror stories over on the Tesla forums about mis-handled credits and fumbled and delayed tax returns?

 

[yortch]

I received notice CP12 today explaining the rejection of my tax credit:

“We have disallowed the amount claimed as Qualified Plug-in Electric Drive Motor Vehicle on Line 53, Form 1040. To qualify for the credit, your vehicle must have been placed in-service after December 31, 2008 and before January 1, 2010.”

They must be kidding, right? Well at least this should be an easy one to explain, I think. I will call them today and see what they need from me to fix their error, stay tuned.

Here’s my history so far regarding the rejection of my 8936 tax credit from my 2013 tax return status:
[01/30/2014]: e-Filed using TaxACT
[01/31/2014]: return accepted by IRS
[02/24/2014]: refund accepted by IRS with the following notice: “The balance of your refund, [$ amount minus $7,500 credit], was sent to your bank on February 26, 2014. You should receive a notice dated February 24, 2014 that explains the changes made to your tax return”.
[03/05/2014]: Received notice CP12

 

[mwalsh]

I received notice CP12 today explaining the rejection of my tax credit:

“We have disallowed the amount claimed as Qualified Plug-in Electric Drive Motor Vehicle on Line 53, Form 1040. To qualify for the credit, your vehicle must have been placed in-service after December 31, 2008 and before January 1, 2010.”

That is complete and utter bollocks. There is no end date on the credit that I'm aware of.

Plug-in Electric Drive Vehicle Credit (Section 1141): ARRA modifies the credit for qualified plug-in electric drive vehicles purchased after Dec. 31, 2009. To qualify, vehicles must be newly purchased, have four or more wheels, have a gross vehicle weight rating of less than 14,000 pounds, and draw propulsion using a battery with at least four kilowatt hours that can be recharged from an external source of electricity. The minimum amount of the credit for qualified plug-in electric drive vehicles is $2,500 and the credit tops out at $7,500, depending on the battery capacity. The full amount of the credit available for a specific manufacturer’s vehicles will be reduced after that manufacturer has sold at least 200,000 vehicles. For more information, see: Questions and Answers, Notice 2009-54 and Notice 2009-89.

 

[davewill]

“We have disallowed the amount claimed as Qualified Plug-in Electric Drive Motor Vehicle on Line 53, Form 1040. To qualify for the credit, your vehicle must have been placed in-service after December 31, 2008 and before January 1, 2010.”

Sounds like they got it confused with the OLD EV credit, form 8834.

 

[mwalsh]

Sounds like they got it confused with the OLD EV credit, form 8834.

Stupid IRS office drones! :x

BTW, this is why I choose to make sure I'm either even on my withholding or underpay the IRS a bit, rather than overpay. They can sing for taxes due all they want, rather than them holding my money for ransom! :lol:

 

[KillaWhat]

after owning my Leaf 2.5 years (its a lease) and reading these stories I am still not comfortable buying my next EV as far as taxes are concerned

too concerned i'll get jammed on my taxes somehow. what a joke.

good luck to all the BMW customers who have no real lease option for the full $7500
the 2 choices are lease and take the partial $4875 credit from BMW
or
buy and take your chances with the IRS on the credit of $7500

wonder if there are horror stories over on the Tesla forums about mis-handled credits and fumbled and delayed tax returns?

You are not "taking your chances" with the IRS.
If you have the tax liability to offset the $7500 credit, It's a 100% valid deduction.

Keep in mind all the hundreds (thousands) of people who have done this without even a hiccup from the IRS.

I Submitted a 2012Tax filing; no problems at all.
Also got 30% of the EVSE costs as well.

Don't get yourselves all worked up about this.
It's not a big deal!!

I submitted my IRS Vehicle form, the bill of sale, a copy of my window sticker, Valid state registration , a copy of the source of funds (executed and cancelled) and a copy of the IRS's own documentation (from their website) that this exact vehicle qualifies for the credit.

My tax guy's advice was to bury them with valid paperwork, so they would have nothing they could ask for that they didn't receive already.

Send them a very complete package, not just an e-form from an e-filing!
Use the correct form(s)!
Give them a Pile - o-Paper to sink their teeth into.

Easy Peasy really.

 

[mwalsh]

My tax guy's advice was to bury them with valid paperwork, so they would have nothing they could ask for that they didn't receive already.

That misses the point somewhat.

First the IRS started telling us that we needed to file the manufacturer's certification.
Well, no...that's the manufacturer's responsibility, actually.

Then they started telling us that we needed to send them our invoice for the car.
Well, OK...I guess. But we have no legal responsibility to provide you any proof of ownership beyond form 8936 with the VIN number filled out.

Then they started telling us that, for various incorrect reasons, that the tax credit wasn't applicable.

Surely if there are laws that preclude us from cheating the IRS, there are also laws that preclude the IRS from cheating us? And if there aren't, THERE SHOULD BE!

 

[lion]

My $7,500 credit got rejected as well (and have the tax liability), 2 weeks later, still haven't received the letter, and keep getting put on hold when trying to call them.

 

[KillaWhat]

My $7,500 credit got rejected as well (and have the tax liability), 2 weeks later, still haven't received the letter, and keep getting put on hold when trying to call them.

What did you submit as supporting documentation?

 

[lion]

My $7,500 credit got rejected as well (and have the tax liability), 2 weeks later, still haven't received the letter, and keep getting put on hold when trying to call them.

What did you submit as supporting documentation?

Nothing. TurboTax asked for the VIN #, invoice numbers, that's it. Just got off the phone with them, they are absolutely useless. Asked again if we were supposed to send in other documentation, they said no. They insisted I call the Treasury Offset Program department (guess they didn't believe me when I said I had no outstanding debts to the gov), which I did, and the automated system indicated all is fine.

I also called the IRS, and they said the numbers look fine, it just wasn't processed. IRS also said they won't send us a letter explaining the problem either.

This is really frustrating for sure. This was the first (and last) time I ever used TurboTax.