How does the fed rebate work

[Epi117]

Still waiting on 2013 in Portland Oregon, my question. How does the fed rebate work? When i purchased my Prius i mailed some info to state and a few weeks later got a card with amount i could claim at end of year.

Does fed rebate work same way?

Leaning towards leasing but just wanted to check.

 

[Randy]

It is a federal Tax Credit, not a rebate. You need to have a $7,500 tax obligation to get the full amount back...

So you will need to wait until next year to file for the credit.

Of course, filing to get the credit back is for purchasers. If you lease the car, then Nissan will get the credit and they will give it to you as part of the lease deal, and it will be factored into the price...

 

[ebill3]

Still waiting on 2013 in Portland Oregon, my question. How does the fed rebate work? When i purchased my Prius i mailed some info to state and a few weeks later got a card with amount i could claim at end of year.

Does fed rebate work same way?

Leaning towards leasing but just wanted to check.

There is no Fed rebate that I am aware of. There is a Federal Income Tax Credit. That is, if you purchase, not lease, a qualifying EV, the Federal Government will credit you with up to $7,500 in paid income tax.

If your tax liability is $7,500, you owe nothing. If your tax liaility is $8,000, you owe $500. If your tax liability is $5,000, you owe nothing, but you do not get a $2,500 rebate.

To get the tax credit, you must purchase, not lease. If you lease, Nissan gets the tax credit, and, at least in the past, has passed that credit on to the leasor.

 

[cracovian]

Due to historically low taxes, very few people actually have $7.5K in tax liabilities... Those who do usually go with the Tesla anyway

 

[planet4ever]

Due to historically low taxes, very few people actually have $7.5K in tax liabilities... Those who do usually go with the Tesla anyway

Huh? Maybe that smiley was supposed to indicate this was just a joke, but a single person with $45k taxable income owes $7.5k in federal income tax, unless they can take advantage of some "loopholes". I suspect you'd need three times that much income to qualify for a loan on the cheapest Tesla.

Ray

 

[Epi117]

Lol , so just to clarify, I'm sure we meet the taxable income requirement.

still considering lease versus buy. But if we buy, is there any way we would not get the credit, is nissan near its limit,? Is it first come first serve (all things being equal)?

 

[RonDawg]

Of course, filing to get the credit back is for purchasers. If you lease the car, then Nissan will get the credit and they will give it to you as part of the lease deal, and it will be factored into the price...

Just to clarify this for the OP, as I was under the wrong impression until a couple of posters corrected me:

The $7500 is taken off the price of the Capitalized Cost (aka the "purchase price") right away, regardless of your actual tax situation. BUT....you must use NMAC (Nissan's in-house financing) as the lessor. If another bank (and dealers have access to many, not just NMAC) is used the lessor, you won't get the $7500 at all.

 

[planet4ever]

But if we buy, is there any way we would not get the credit, is nissan near its limit,?

Sure, there are ways you might not get the full credit, or any at all. It is "non-refundable", which doesn't mean what it sounds like. As ebill3 said, that means you can't get credit for more than the total income tax you paid for the year. So other tax credits might interfere with it. It can't be carried over to a future year. You could get caught in an AMT trap.

No, Nissan is not near its phase-out trigger, which is 200,000 plug-in vehicles sold in the US for each manufacturer.

Ray

 

[LEAFfan]

Due to historically low taxes, very few people actually have $7.5K in tax liabilities... Those who do usually go with the Tesla anyway

Huh? Maybe that smiley was supposed to indicate this was just a joke, but a single person with $45k taxable income owes $7.5k in federal income tax, unless they can take advantage of some "loopholes". I suspect you'd need three times that much income to qualify for a loan on the cheapest Tesla.

Ray

I believe it is much higher than 45K. This was discussed a couple years ago and the consensus was $60-65K.

 

[planet4ever]

Due to historically low taxes, very few people actually have $7.5K in tax liabilities... Those who do usually go with the Tesla anyway

Huh? Maybe that smiley was supposed to indicate this was just a joke, but a single person with $45k taxable income owes $7.5k in federal income tax, unless they can take advantage of some "loopholes".

I believe it is much higher than 45K. This was discussed a couple years ago and the consensus was $60-65K.

I said $45k taxable income, but I should have said $46k. The standard deduction for a single person is ~$6k, and you get nearly $4k for your personal exemption, so adding those two in gives roughly $56k gross income. Of course if you itemize or you have gross income adjustments you are taking advantage of some more loopholes.

A married couple filing jointly gets double that standard deduction and (assuming no kids) double the personal exemption, and they don't hit $7.5k until their taxable income hits nearly $56k. So that would be more than $75k gross, even in the "no loopholes" case. Add a couple of kids and a home mortgage and some significant medical bills or student loans, and it does appear that a heavy majority of single-income families would pay less than $7.5k in income tax. (Only 25% of all households have an income greater than $80k.)

But that still leaves a lot of people -- say 15 to 20 million US households -- in the $85k to $135k range, most of whom would find a Tesla a stretch. So I do question cracovian's "very few" characterization.

Ray

 

[cracovian]

Due to historically low taxes, very few people actually have $7.5K in tax liabilities... Those who do usually go with the Tesla anyway

Huh? Maybe that smiley was supposed to indicate this was just a joke, but a single person with $45k taxable income owes $7.5k in federal income tax, unless they can take advantage of some "loopholes". I suspect you'd need three times that much income to qualify for a loan on the cheapest Tesla.

Ray

I don't really know... I'm married, have three kids, a standard house (or two) and my tax liability is pretty much non-existent. I pay a lot more to the state though. Oh, I make a lot more than $45K... I don't take advantage of "loopholes" unless you consider property taxes and mortgage interest as such.