EVSE - credit ... seems to be more complex than simply AMT

So, of course turbo tax doesn't support the right form, and when trying to fill form 8911, I end up with no credit I can use.
The reason is that while I'm not paying any AMT before the $7,500 credit from the LEAF purchase, and while even if I was paying the AMT I could deduct the $7,500 from the LEAF itself, the number they compare is :
tentative AMT vs regular taxes - 7500

So while in my case the AMT is still about $1,000 LOWER than my regular tax, it becomes $6,500 HIGHER than my regular tax - the credit for the car itself.

So, I'm not paying the AMT, but still I apparently can't use the EVSE credit ... and anyone within $7,499 of the AMT would be in the same situation.

Anyone knows about taxes and could look at form 8911 ?

I've checked on the irs.gov website, and this is exactly what's happening ...
IF you're using the $7,500 credit from form 8936 (Qualified Plug-in Electric Drive Motor Vehicle Credit), then the requirement becomes :
tentative AMT + 7500 < your regular tax before the 7,500 credit ...

... insane ... and I'm likely moving in less than a couple month ...

Not sure what you're doing since you've mentioned 8911 which is for the charger and 8936 which is for the car. Also not sure what part of the IRS website you're referring to. You should get the credit either way. Are you checking the wrong box or something on Line 53 of Form 1040?

Here is how the AMT works. You calculate your tax including all credits and deductions. Then you calculate your AMT tax which excludes various deductions and credits. You pay the AMT if it's higher. But in no circumstances are you denied a credit when calculating your regular tax. Just to check, what happens if you don't claim the 8936 deduction at all? It's possible that your AMT tax is higher than your regular tax, and that the 8936 credit is reducing your AMT tax but you're not seeing that.

Next year this will be easier since TurboTax may have this in the standard forms. And of course by leasing you avoid all this hassle entirely. But you should be good.

SanDust,
TurboTax doesn't deal with form 8911, it lets you enter the result of the form if you were to do it yourself, but it will create an error in their system, and they won't generate the form for you. I called their support, and they're not supporting it because they don't have enough customers who would use it... (no kidding)
So I had to re-import all my forms (I got all the numbers from turbo tax) in a different service (the service that the IRS links to for efiling), they don't have the nice turbo tax UI, but they do have all the forms, and they'll do the basis computations assuming you fill in the fields correctly.
My AMT calculation is really simple, as it's only item 1 and 3, and so the EVSE credit appears no-where there. from there, it's simply their formulas.
My AMT ends up being 1000 less than my regular tax (before the 7500 credit), so I don't pay any AMT.
Now, if you look at form 8911, line 19b, the instructions are really clear :

Line 19b
Enter the total, if any,.... Form 8936, line 14;....

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You then remove that from your "Regular tax before credit" (line 18), and you compare it to your AMT (line 21).
So, even without paying any AMT, if your AMT is more than 7500 less than your regular tax, you're losing this credit.
I'm quite disappointed, if I was not renting and had to move so soon, I would probably not care, but I've paid ~1300 for this EVSE and I would only have used it on this property for about 4 months in the end ... well at least I can keep the unit and move it to my new place.

SanDust said:

Are you checking the wrong box or something on Line 53 of Form 1040?

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I'm checking line 53c, mentioning the form 8936 and the 7500 deduction.

I tried to file my return through H & R block, whom I have been using for the last 7 yrs. They don't have form 8911 listed on their website. I had filled the form with all the details and taken with me. But their rep was not aware of this and wanted to get this added to their database before I could file electronically. Of course, I have not gotten my car as yet and would hopefully be using form 8936 for my 2011 return.

gudy said:

My AMT ends up being 1000 less than my regular tax (before the 7500 credit), so I don't pay any AMT.
...
So, even without paying any AMT, if your AMT is more than 7500 less than your regular tax, you're losing this credit.
I'm quite disappointed, if I was not renting and had to move so soon, I would probably not care, but I've paid ~1300 for this EVSE and I would only have used it on this property for about 4 months in the end ... well at least I can keep the unit and move it to my new place.

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The AMT can be confusing but it works this way. First you have to calculate your regular tax bill. This would include the EV and the EVSE tax credits. Let's say this is X. Now you calculate your tax bill the AMT way. When you do this you lose certain deductions and credits. If your tax bill is greater when you do it the AMT way than when you do it the regular way then you've lost the EVSE credits (and perhaps some others as well).

Basically if your income is high enough to get you snagged by the AMT but not high enough to get you out of the AMT then you won't be able to use the EVSE credits. Unfortunately there isn't any way out of this. What's throwing me off is the statement that your AMT tax is less than your regular tax before the credit since I don't know how you would calculate your regular tax without the EV credits but calculate your AMT tax with the EV credits. Both would be calculated using or not using the EV credits, and the tax due using both the AMT and the regular calculation should be $7500 less than they would be without the EV credits. IOW the $7500 EV credit won't affect your ability to use the EVSE credits one way or the other. They're completely separate credits.

I've seen comments along the lines of "if you pay even one dollar of AMT tax then you lose the EVSE credit". That's a weird way to put it. You don't lose the credit because you owe a dollar more tax under the AMT calculation. What's happened is that the tax is greater because the calculation has been done without including the credit (so it's not likely you only owe a dollar more).

It's understandable why people get confused. The AMT is a silly mess.

So has someone been successful in e-filing taking the EVSE credit? TT and H&R Block wouldn't let me, and the IRS free forms wouldn't either. I ended up just mailing them in but it would've been really nice to have e-filed. I would have my money back by now.

malloryk said:

So has someone been successful in e-filing taking the EVSE credit? TT and H&R Block wouldn't let me, and the IRS free forms wouldn't either. I ended up just mailing them in but it would've been really nice to have e-filed. I would have my money back by now.

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I would find out tomorrow if I can file my return along with form 8911 as I have another appointment with H & R block. I would keep the forum posted.

malloryk said:

So has someone been successful in e-filing taking the EVSE credit? TT and H&R Block wouldn't let me, and the IRS free forms wouldn't either. I ended up just mailing them in but it would've been really nice to have e-filed. I would have my money back by now.

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malloryk, the form is now available for e-filing from the free forms website.

Olivier

When you are claiming the EVSE credit what amount are you using, the bill from AV, only the EVSE unit or the entire amount of installation (which may include any additional electrical work done to install unit)? Doing my taxes this week and want to get as much credit as I can claim.

MaryC said:

When you are claiming the EVSE credit what amount are you using, the bill from AV, only the EVSE unit or the entire amount of installation (which may include any additional electrical work done to install unit)? Doing my taxes this week and want to get as much credit as I can claim.

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I'm including the whole thing--including labor and permit fees. You probably won't get audited, but if you do, you can always ask the IRS agent "What good is the EVSE if it isn't hooked up? It has to be done by a licensed Electrician."

MaryC said:

When you are claiming the EVSE credit what amount are you using, the bill from AV, only the EVSE unit or the entire amount of installation (which may include any additional electrical work done to install unit)? Doing my taxes this week and want to get as much credit as I can claim.

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Good question! I'm surprised that neither the IRS Form 8911 nor the Federal code section (Title 26 Section30c) seem to spell that out. "Cost of property" is probably defined in some general section somewhere. However I would say the answer in this case is fairly clear and defensible. The law states that the credit applies to "the cost of any qualified alternative fuel vehicle refueling property placed in service by the taxpayer during the taxable year." It's not like you can just go out and buy some equipment. It has to be installed and usable by the end of the year or you can't claim any credit at all. I think you have a very strong argument that all costs of placing it in service are eligible for the credit.

Ray

Strange, I thought I read that the law clearly included both the real installation and hardware costs (not your own labor, if any), and had the date "in Service" as an additional requirement.

But, perhaps I am not remebering correctly.

So would it be better to take the credits in two different years?
One more reason to have either rushed the evse into 2010 or wait until 2012(if possible)

Yes, depending upon your tax situation AND the existance of ANY rebate or tax credit for the EVSE in 2012 (30% in 2011, max $1000 credit).

On the TT issues, as I've said in another thread, call them and complain, the more calls they get, the more likely they are to realize that although most people haven't installed Hydrogen Fueling Stations in their home, a lot of people have installed EVSEs! Many of us have! So we need to call and show them they are wrong, the Alternative Fuel Tax Credit is very popular this year and if you recognize EVs in your program you must recognize that most people who buy and EV also bought an EVSE so if EVs are considered popular this year, so should EVSEs and therefore so should the Alternative Fuel Tax Credit and therefore so should form 8911. They are supposed to come out with another update this Friday so we'll see if they've relented on the idiocy of not realizing the popularity of the EVSE credit. Thank you Gudy / Olivier for giving them a piece of your mind! We all should explain to them the fallacy of their reasoning.

As for taking the credit, I agree with SanDust; it is my understanding that since you can claim the EV credit under AMT the AMT tax rate should also go down by $7500 when you apply it to your standard tax calculation. I'm in the more unusual position of qualifying for an Insulation tax credit and an EVSE tax credit but not an EV tax credit since I couldn't, of course, buy an EV in 2010. But my understanding is that the AMT calculation should include the EV credit and therefore you shouldn't end up with the damned-if-you-do-damned-if-you-don't situation. As it is, SanDust is also right in that if you had disqualified by AMT deductions and with the EVSE your base tax becomes reduced below the AMT calculation, but without the EVSE the AMT is lower, then clearly you shouldn't claim the EVSE in 2010 and just accept that you're not getting any credit since trying to do so will force you into a higher tax rate. If you fall in that category then just don't claim the EVSE and write and angry letter to your congressperson.

Also, I don't see how you could split the EVSE credit; believe me I wanted to. If it's just a matter of "fudging the dates" to make sure the credit appears in 2010, I'm sure you could get your electrician to do that if we're talking January or February, but not if you're waiting on a Leviton 320 expected out in September.

And as far as what's included in the deduction, it's my understanding that it's parts and billed labor; you can't charge yourself labor though, so that must be done by a qualified electrician to get that part of the credit. I agree with the "put in service" to mean wire it, and I'm even taking the liberty to claim that I needed a sub-panel because, well, I knew (thought) the power utility would be offering a separate TOU rate for EVs and it turns out I'm right: Schedule EV (Dominion Virginia Power). So I'm claiming $4000+ for parts and labor and inspections and filings and thus $2000 for the credit. Unfortunately, because even with 0 deductions on my W4 they company's still not taking enough to make Uncle Sam happy, I still end up owing money even with the $2000 credit -- just less money.

P.S. IANACPA: I am not a Certified Public Accountant.

It seems like several of the responders have not actually read the IRS forms referred to by the OP. While I agree with the various descriptions of how the AMT is _supposed_ to work conceptually, that is not what you find on the forms. While the $7,500 EV tax credit is itself exempt from the AMT, when calculating the EVSE tax credit, the $7,500 EV tax credit is treated like a tax preference item and left in the "tentative minimum tax". So the upshot is that you only get to claim the EVSE tax credit if your regular tax after subtracting the $7,500 EV tax credit is still more that your "tentative minimum tax" without the $7,500 reduction.

It is vaguely possible that this in an error in the EVSE tax credit form, although unlikely. This could be checked by looking up the actual laws/regulations and/or asking the IRS.

Cheers, Wayne

I'm probably stating the obvious, but leasing the LEAF would eliminate this particular problem. Since the $7,500 tax credit is claimed by Nissan and reduces the capitalized cost in your lease, you have no personal tax consequences for that credit.

This could make leasing more attractive to those installing EVSEs and taking delivery of a LEAF in 2011. I don't know if the 2011 EVSE tax credit law has the same provisions regarding AMT as the one governing 2010 and prior years. As has been stated elsewhere, I believe the 2011 credit limit is $1,000 for the EVSE.

wwhitney said:

It seems like several of the responders have not actually read the IRS forms referred to by the OP. While I agree with the various descriptions of how the AMT is _supposed_ to work conceptually, that is not what you find on the forms. While the $7,500 EV tax credit is itself exempt from the AMT, when calculating the EVSE tax credit, the $7,500 EV tax credit is treated like a tax preference item and left in the "tentative minimum tax". So the upshot is that you only get to claim the EVSE tax credit if your regular tax after subtracting the $7,500 EV tax credit is still more that your "tentative minimum tax" without the $7,500 reduction.

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I understand why you may think that the EV credit is a preference under the AMT but that would be a misinterpretation. The AMT establishes a minimum tax which you have to pay. Generally speaking that is a hard floor but there are credits that allow you to pay less than the AMT tax floor. The tax credit for an EV is one of the exceptions.

The credits are applied sequentially. First you apply those credits which can drop your tax below the floor and then you apply those which can't. If the AMT is sufficiently low to allow both then you're home free. If not then you always get the benefit of the exceptions as well as whatever part of the the standard credits that do not drop your regular tax below the AMT floor. This is what happens on Form 8911.

The EV credit is not involved in calculating the AMT. It doesn't change the amount of AMT so it's not a preference like those found on Form 6251. At most you can say that, since it's applied before the standard credits like the EVSE credits, it can reduce the availability of the standard credits. That's true enough but this is true of other credits which are not subject to the AMT as well. FWIW you can prove this to yourself pretty easily if you used something like TurboTax to prepare taxes and had to pay AMT. Just override the entry for EV credits and give yourself a $1000 credit. Fun! You taxes will go down by $1000. Cancel the override and they'll go up by $1000. Your AMT tax never changes, which is a result you'd only get if the EV credit does not in any way change the AMT.

So the very last sentence of the quote above is correct but the earlier parts are not.

Finally, not to go Fox News on this, and understanding that anyone can be disappointed when they don't get a tax break they think they're going to get, but aren't we getting just a little piggy? We want the $7500 tax credit for an EV. Oink Oink. Then we want the $5000 CARB rebate. Oink Oink. And now we think that somehow we're being treated unfairly because the $7500 goodie, probably along with one or more other goodies, means that we can't get yet one more $1000 goodie. Personally $12,500 seems like a pretty nice haul for one year to me. I'm not prepared to break out the violins.