My Nissan Leaf Forum

Instead of giving every possible iteration please post if your total tax was greater than $7500 or less than $7500.
Total tax has nothing to do with withholdings, prepayments, refunds, or the amount due April 15.

Look on your 1040 line 60. It is either greater than 7500 or it is less.

Possible correction... Line 60 includes self employment tax and some others that may not be refundable.
Might be better to look at line 55. I am not sure that all taxes from line 56 to 59 are refundable.

Go ahead and correct me if wrong.

I think the problem is that a lot of people - maybe most people - have given up trying to fill in their own tax forms. They either have someone "do their taxes" for them or they use a tax program. Either way they are not much aware of what is on some particular line (whose number, incidentally, changes from year to year) of some form. And in many cases they never really think about what the total tax is that they are paying. [In not a few cases, I suspect that they really don't want to know what the total is, because they're already far too angry at the government.]

Incidentally, I would argue that total tax has a lot to do with withholdings, prepayments, refunds, and the amount due April 15, since total tax is what you owe, and those things are what you pay, and the job of the IRS is to see to it that what you pay matches what you owe.

Interesting how it shows 2 separate lines (Date Purchased, and Date Placed-In-Service). To us it's typically the same, but that "placed in service" is the all important IRS term which also rears its head on the EVSE credit ... (see separate discussion) ... is it "purchased", "installed' or "first use" ... ( I am NOT trying to open that discussion again. Just pointing out a detail on that TurboTax form ).

Not a correction, but a confirmation. IF you do pay any self-employment tax that amount cannot be factored into the tax liability reduced by the EV Tax Credit. In my case (self-employed), it drops me below the magic 7500 number.

You might pay for it when it gets installed, but cannot put it "in Service" for 3 weeks because your PU has not yet installed the meter which is needed to operate the EVSE, thus not powered on and ready to use.

I'll try and really simplify it for everyone. A tax credit is equivilant to a payment in taxes, i.e. money you give the government to pay your income tax. So a $7500 credit is as if you already gave the IRS $7500. If the TOTAL INCOME TAX (not FICA, self employment tax, etc.) for the year on your taxable income is LESS THAN $7500, you can only claim up to that amount. Otherwise it's as if you already paid the government $7500 in INCOME TAX. If you pay too much in withholdings and other payments, you'll get a refund.

I suspect you meant to say "amount of income tax you owe for the year". You can't qualify for the credit by over withholding. I get that you understand this but the discussion of withholding might be confusing.

The other complication is that other credits may limit the EV credits or vice versa. The EV credit doesn't roll. If you have a tax bill of $8000 and other credits of $4000, you may have $11,500 in credits ($7500+$4000) but you can only offset the $8000 which is your tax for the year. You may not be able to use the other $3500 in credits.

Leasing solves many problems.

The credit is based on the size of the battery pack. Any vehicle with a battery pack of 16 kWh or larger qualifies for the $7500 credit. Vehicles with less than four wheels or NEVs qualify for a 10% credit which is based on the purchase price, subject to a limit of $2500.

Payroll taxes (Social Security tax (FICA) and Medicare tax) do not figure at all. I'm pretty sure
they have never figured in calculating one's Federal income tax liability. I just looked and
there is nothing on Form 1040 nor Shedule A (for itemizing deductions) regarding FICA or Medicare
taxes.

Internal Revenue Bulletin: 2009-48, New Qualified Plug-in Electric Drive Motor Vehicle Credit
Section 8. DATE OF APPLICABILITY
"This notice is applicable to plug-in electric drive motor vehicles acquired (within the meaning of section 4.07 of this notice) after December 31, 2009."
But it does not specifically say when the end date is.

Regarding how long the tax credit will be available:
Specifically, according to the American Recovery and Reinvestment Act of 2009,SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES.
(e) Limitation on Number of New Qualified Plug-in Electric Drive Motor Vehicles Eligible for Credit.

The tax credit for a vehicle will be in effect until the end of the quarter in which the manufacturer (Nissan in this case) sells its 200,000-th unit of the vehicle (Leaf).
Leaf's purchased in the next two quarters get 50% of the tax credit (max $3750).
Leaf's purchased in the next two quarters get 25% of the tax credit (max $1875).
Leaf's purchased subsequent to that get no tax credit.

A Leaf's selling price does not factor into the equation. Paying X dollars below invoice or
Y dollars above MSRP does not affect the amount of the tax credit.

Again, according to American Recovery and Reinvestment Act of 2009:
SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES.
(d) New Qualified Plug-in Electric Drive Motor Vehicle.

To qualify, a vehicle must have 4 wheels, has a GVWR of less than 14,000 lbs, and has a battery capacity of more than 4 kWh, among other things.

The credit is calculated as:
1. $2500, plus
2. $417 for each kWh battery capacity above 4 kWh, not to exceed $5000

In the case of the Leaf, this works out to be the max, $7500.
(It's interesting to note that the wording indicates that if the vehicle has a battery capacity of 4.9 kWh, it does not qualify for part 2. of the credit at all.)

What do you think of chances that republicans will cancel EV credit before then end of this year? If it happens I will be broke.