smkettner
Posts: 6605
Joined: Mon Aug 09, 2010 10:13 pm
Delivery Date: 26 Feb 2014
Location: Orange County, CA

Re: How Exactly Will The Tax Credit Work

Mon Jan 24, 2011 12:06 am

IBELEAF wrote:You guys create a lot of confusion, garygid said in previous page that it's not correct when I said the same thing, so who knows how exactly credit should work?

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.
1 bar lost at 21,451 miles, 16 months.
2 bar lost at 35,339 miles, 25 months.
LEAF traded at 45,400 miles for a RAV4-EV

User avatar
planet4ever
Posts: 4674
Joined: Sat Apr 03, 2010 9:53 pm
Delivery Date: 02 May 2011
Leaf Number: 1537
Location: Morgan Hill, CA, south of San Jose

Re: How Exactly Will The Tax Credit Work

Mon Jan 24, 2011 1:09 am

smkettner wrote: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.

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.
End of April 2013: Traded my 2011 SL for a 2013 S with charge pkg.

User avatar
LEAFer
Posts: 2647
Joined: Mon May 24, 2010 10:10 am
Delivery Date: 19 Jan 2011
Leaf Number: 000215
Location: Sacramento Area

Re: How Exactly Will The Tax Credit Work

Mon Jan 24, 2011 9:31 am

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 ).
2011 Silver SL+QC [Mfg: 11/2010] 36mo/15k LEASE
06Jun2013 Status [28.5 months][34,173 miles][11 bars]
Lost CapacityBar 6/6/13 @34,173 miles while in LEAF Battery Monitor: 83.41%, 71.4F (avg); cool overnight;

RevBrent
Posts: 62
Joined: Thu Oct 21, 2010 2:53 pm

Re: How Exactly Will The Tax Credit Work

Thu Feb 17, 2011 2:49 pm

smkettner wrote:
IBELEAF wrote: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.


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.

User avatar
garygid
Gold Member
Posts: 12188
Joined: Wed Apr 21, 2010 8:10 am
Delivery Date: 29 Mar 2011
Leaf Number: 000855
Location: Laguna Hills, Orange Co, CA

Re: How Exactly Will The Tax Credit Work

Fri Feb 18, 2011 1:58 am

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.
See SOC/GID-Meter and CAN-Do Info
2011 LEAF, sold in 2015
2010 Prius, 2014 silver Tesla S
Nissan EVSE, mod to 240/120v 16A
PU: SDG&E
Solar PV: 33 x 225W -> 7 kW max AC
To Sell: X-treme 5000Li EV motorcycle

jcesare
Posts: 583
Joined: Tue Oct 19, 2010 3:22 pm
Delivery Date: 20 Apr 2011
Leaf Number: 1290
Location: San Marcos, CA

Re: How Exactly Will The Tax Credit Work

Wed Feb 23, 2011 12:17 pm

IBELEAF wrote:You guys create a lot of confusion, garygid said in previous page that it's not correct when I said the same thing, so who knows how exactly credit should work?

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.
Leaf eTec Blue Ocean
Reserved 6/25/10
EVProject approved 1/06/11
Blink EVSE Installed 4/6/11 (Separate meter, ethernet connection)
Ordered 1/25/11 Delivered 4/20/2011

SanDust
Posts: 1363
Joined: Fri Aug 06, 2010 10:54 am

Re: How Exactly Will The Tax Credit Work

Fri Feb 25, 2011 3:03 pm

planet4ever wrote:The rule is very simple, and not ambiguous at all:

The EV tax credit can reduce the TOTAL amount of income tax you pay for the year, but it cannot make it negative.

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.

SanDust
Posts: 1363
Joined: Fri Aug 06, 2010 10:54 am

Re: How Exactly Will The Tax Credit Work

Fri Feb 25, 2011 3:12 pm

IBELEAF wrote:i've been playing with Turbo Tax software. The interesting part is that irs doesn't care how much you paid for it to calculate the refund...

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.

User avatar
aqn
Gold Member
Posts: 794
Joined: Fri Oct 01, 2010 12:59 pm
Delivery Date: 30 Apr 2011
Leaf Number: 1333
Location: Austin, TX
Contact: Website

Re: How Exactly Will The Tax Credit Work

Fri Feb 25, 2011 7:24 pm

earther wrote:As a teacher, my salary is low enough that there's NO WAY I'll ever come close to paying $7500 in federal taxes in a single year... not even half that.
However, a tax credit is a tax credit -- I can't really complain about the government incentivizing me to purchase an EV just because rich people are incentivized more.
evnow wrote:I'm not sure whether it is just income tax or income tax + payroll taxes.
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.

leafygreen wrote:By the way, it also says: "The credit expires December 31, 2010". Maybe it will be extended?
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:
mwalsh wrote:Leaf

$7500
Cannot be rolled over - must be used in the tax year when you bought the vehicle (as legally described by your state)
Can be used with the AMT
Expires when each manufacturer has sold 200,000 EV units (a bit more complex than that, but that's the gist of it)
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.

IBELEAF wrote:i've been playing with Turbo Tax software. The interesting part is that irs doesn't care how much you paid for it to calculate the refund...
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.

SanDust wrote: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.
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.)
Anna Nguyen

jason98
Posts: 79
Joined: Mon May 24, 2010 2:29 pm

Re: How Exactly Will The Tax Credit Work

Tue Mar 01, 2011 5:07 pm

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. :shock:

Return to “News & Main LEAF Discussion”