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Electric drive vehicle credit 8936 decreased/rejected by IRS

Posted: Fri Apr 27, 2012 9:53 am
by tzzhc4
I know this has been discussed in some other threads but I figured a thread specifically for it might be good if others are having the same problem.

Is anyone else having a problem with the IRS decreasing/rejecting your 7500 rebate for the Leaf based on TMT (tentative minimum tax)? I do not owe AMT but had my 7500 rebate basically nulled out because of TMT. I am having a tough time getting a straight answer from the IRS and don't know a good tax professional in Texas who is familiar with EV credits. If anyone can recommend a tax profession familiar with EV credits I would appreciate it. Paying someone for a consult or whatever would be worth it if I can get the rebate for my LEAF.

I think I figured out where the confusion is. There are two credits with similar names. 6251 instructions refers to the "Qualified Electric Vehicle Credit" which is form 8834. 8936 "Qualified Plug-in Electric and Electric Vehicle Credit" is not supposed to be subject to AMT or TMT at least it does not specifically mention AMT/TMT the way 8834 does:

From instructions for 6251: You claim the qualified electric vehicle credit, the personal use part the alternative fuel vehicle refueling property credit.

8834 Qualified Plug-in Electric and Electric Vehicle Credit (2 and 3 wheeled cars and slow cars, like golf carts)
8936 Qualified Plug-in Electric Drive Motor Vehicle Credit (regular cars that are electric)

I also found this but I don't know if that refers to everything or only to for 8910 "Alternative Motor Vehicle Credit":

Treatment of Alternative Motor Vehicle Credit as a Personal Credit Allowed Against AMT (Section 1144): Starting in 2009, the new law allows the Alternative Motor Vehicle Credit, including the tax credit for purchasing hybrid vehicles, to be applied against the Alternative Minimum Tax. Prior to the new law, the Alternative Motor Vehicle Credit could not be used to offset the AMT. This means the credit could not be taken if a taxpayer owed AMT or was reduced for some taxpayers who did not owe AMT.

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Sun Apr 29, 2012 1:34 am
by mwalsh
I don't know about that, but I do know that the IRS is sitting on my tax return for this year. I've had private discussion with someone else in the same situation and who has contacted them - he's waiting on "an investigator" being assigned to his "case"! :shock:

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Sun Apr 29, 2012 6:53 am
by oakwcj
mwalsh wrote:I don't know about that, but I do know that the IRS is sitting on my tax return for this year. I've had private discussion with someone else in the same situation and who has contacted them - he's waiting on "an investigator" being assigned to his "case"! :shock:


I don't think it's quite that ominous. The IRS randomly selects some returns claiming certain large tax credits. They go to the "examination" -- not the "investigation" -- department to be looked at by an "examiner." The only problem I have with the process is that it is taking way too much time.

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Sun Apr 29, 2012 7:21 am
by RSH
My CPA here in California filed my federal return electronically and the refund including tax credit was posted in my bank account in about two weeks. He filed on form 8936 Qualified Plug-in Electric Drive Motor Vehicle Credit. I hope that information is helpful to you.

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Sun Apr 29, 2012 8:30 am
by Stanton
RSH wrote:My CPA here in California filed my federal return electronically and the refund including tax credit was posted in my bank account in about two weeks. He filed on form 8936 Qualified Plug-in Electric Drive Motor Vehicle Credit. I hope that information is helpful to you.


Same here...substituting TX for CA. Guess that's why I pay someone to do my taxes :mrgreen:

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Sun Apr 29, 2012 9:22 am
by smkettner
Turbo tax filled out some form for me and refund was had in about three weeks.

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Sun Apr 29, 2012 9:55 am
by gmuzhik
Warning to Leaf buyers in 2011: I Thought everything was fine about getting my full $7500 credit according to Turbotax which I very carefully checked. Yesterday, I just got a letter from the IRS denying $3300 of the $7500 credit. Turbotax did not catch this for some unknown reason. The reason from the IRS was, and I quote: "Some credits are limited to the difference between your tax before credits and tentative minimum tax from Form 6251". My income is not that high and I am still getting hammered by this little known problem. I have spent hours online researching this to little or no avail.

Does anyone know how to fight this?

Thanks in advance,
Gary Dressel

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Sun Apr 29, 2012 10:02 am
by EVDRIVER
IMO, if you have a large credit or itemized return then hire someone to do it. I would never use turbo tax unless I had a very basic return. With all the time people are spending fixing these issues and filing they could have paid a professional to do it properly. Most of the people having these issues are doing their own taxes or using someone like H&R block heads. Just a thought that may be far less expensive in the end.

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Sun Apr 29, 2012 10:35 am
by gbarry42
If this becomes widespread, we may want to figure out who in the sales chain is most affected by this. Nissan is selling a lot of LEAFs based on the notion that these credits make the car affordable. If word gets out that we can't rely on this (promise from the government :lol: ), it is going to hurt further EV acceptance. Nissan chooses where to sell the car based on who's got the tax credits, so this is not just some windfall.

My tax return was pretty close to simple, with the addition of claiming this particular credit. First surprise was that I didn't even have a 7500 dollar tax liability. Then the program didn't have form 8936, so I filled one out manually and had to mail it. I'm sure that will end up at the DOE (Department of Eyeballs). I certainly hope they approve it, but it seems to be dependent on "who ya get" that looks at it.

They seem to be telling us that we can't get the whole credit because we're too rich. Looks like "the 1%" is suddenly getting larger.

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Sun Apr 29, 2012 12:05 pm
by GeekEV
If you don't even have a $7,500 tax liability the issue is that you're not rich ENOUGH. Which, granted, is a little oxymoronic.

As for the earlier comments about Turbo Tax telling you you could get the credit and then having the IRS reject part of it - if that happens you need to raise the issue to Turbo Tax. They guarantee accurate calculations...