Tax credit

[EVDRIVER]

Since this is the Tax Credit thread I will post some info that I suspected and researched with my accountant. IF you receive a CA EV rebate of $5000 you must report that $5K as income for both CA state and federal taxes. This is taxable income on both and the fat that they send you a form or not is irrelevant. The ONLY way it would not be CA taxable is if it were listed as a CA state tax refund. So if you get this rebate expect to pay tax based on your tax bracket for state and federal, so in actuality this is not a full $5K rebate. If this check came from Nissan is would be tax free.

 

[LEAFer]

Sorry to disagree with your accountant

The $5,000 from the CVRP is not a tax credit, it is a rebate (notice I did not say "tax rebate").

The rebate is NOT taxable. My contact is working on "proof", but in the mean time says:

But essentially, this is like an Energy Star rebate for a very large electric appliance. I'll research and see if I can get something posted today.

Edit: Some additional info, for clarity, which you might want to pass on to your accountant. The $5,000 is not sent or issued by the Franchise Tax Board or any tax authority of the State of California. It is sent and issued by the "Center for Sustainable Energy, California" under their "Fueling Alternatives, California's Alternative Fuel Vehicle Rebate Program". This program is funded by the California EPA ARB (more details, see http://energycenter.org/index.php/technical-assistance/transportation).

 

[DaveinOlyWA]

Much better than nothing!!

 

[EVDRIVER]

Sorry to disagree with your accountant

The $5,000 from the CVRP is not a tax credit, it is a rebate (notice I did not say "tax rebate").

The rebate is NOT taxable. My contact is working on "proof", but in the mean time says:

But essentially, this is like an Energy Star rebate for a very large electric appliance. I'll research and see if I can get something posted today.

Edit: Some additional info, for clarity, which you might want to pass on to your accountant. The $5,000 is not sent or issued by the Franchise Tax Board or any tax authority of the State of California. It is sent and issued by the "Center for Sustainable Energy, California" under their "Fueling Alternatives, California's Alternative Fuel Vehicle Rebate Program". This program is funded by the California EPA ARB (more details, see http://energycenter.org/index.php/technical-assistance/transportation).

I realize all these points but just because they call it a rebate does not make it non-taxable. There are plenty of solar "rebates" and they are all taxable. I would like to see a statement from the Franchise Tax Board and IRS that states this is non-taxable. Product rebates and energy star rebates fall into a different category as they are funded differently. PGE solar rebates and SF city solar rebate are all fully taxable. There could be a possible exemptions but to be exempt it must be stated by the IRS and FTB. Let's hope you are right and I'm wrong

 

[LEAFer]

Just for comparison .... is a "California Solar Initiative" rebate (or should that be "incentive" ?) taxable at state or federal level ? (See http://www.pge.com/myhome/saveenergymoney/solarenergy/csi/csiincentives/index.shtml)

 

[EVDRIVER]

Just for comparison .... is a "California Solar Initiative" rebate (or should that be "incentive" ?) taxable at state or federal level ? (See http://www.pge.com/myhome/saveenergymoney/solarenergy/csi/csiincentives/index.shtml)

It does not matter what it's called or what the agency says it's how the IRS defines income. If you get a rebate from a manufacturer it is not taxable because it is a refund of funds paid to that party. Unless it is a federal program I don't see how the IRS will not see it as taxable. As soon as I see IRS proof that it is not taxable I will stand corrected. I file stuff like this all the time on my taxes and it's always taxable. I look forward to your research.

 

[Jimmydreams]

Just for comparison .... is a "California Solar Initiative" rebate (or should that be "incentive" ?) taxable at state or federal level ? (See http://www.pge.com/myhome/saveenergymoney/solarenergy/csi/csiincentives/index.shtml)

I don't claim it as income. It's a REBATE of money I've already paid. Since I'm paying it to myself, it's not 'income'. The money was already taxed before I gave it away.

If it WAS taxable, I'd imagine that CSI would have to issue a w-2 or w-4 or whatever to list the money as income.

 

[mwalsh]

I don't claim it as income. It's a REBATE of money I've already paid. Since I'm paying it to myself, it's not 'income'. The money was already taxed before I gave it away.

If it WAS taxable, I'd imagine that CSI would have to issue a w-2 or w-4 or whatever to list the money as income.

I agree...there won't be any tax on the $5k.

 

[DaveinOlyWA]

I would have to agree. Pretty familiar with cali sales and the rebate would have been taxed at time of purchase.

 

[garygid]

See CA Section 17138.1 on energy rebates as not taxable income.

 

[LEAFfan]

See CA Section 17138.1 on energy rebates as not taxable income.

I was told our utility rebate on a pv system is taxable (counted as income since it goes to the installer) here in AZ, but now I'm wondering if it really is.

 

[garygid]

If the "rebate" goes to the "dealer" (or contractor?) to reduce the cost of the item purchased, it is even MORE clear that it is NOT taxable to you.

However, your cost basis of the item is probably the "reduced" price.

 

[EVDRIVER]

I spoke to an IRS special tax expert on the IRS help line today. He could not find any exemptions to the CA incentive being tax free. Unless the incentive has a specific IRS stipulation to be exempt then it is considered taxable income. All the other rebate and incentives for car, solar, etc all have specific guidelines and instructions, if something does not it is taxable income. To assume it is not because it is "similar" to another incentive is only a judgement. He said that if a tax accountant states it is non-taxable they need to reference the IRS stipulation that it is not. I spent 30 minutes covering every EV and green incentive with him. Until I see something IRS specific that states otherwise I will consider it taxable income and if the IRS asks why it was not claimed you need to provide that documentation. He even stated only MFG rebates are non-taxable. This is not tax advice but if there is any doubt on anyones part I suggest writing the IRS for a written answer with details about the incentive and pages from the website as they are required to provide an answer.

 

[LEAFfan]

I spoke to an IRS special tax expert on the IRS help line today. He could not find any exemptions to the CA incentive being tax free. Unless the incentive has a specific IRS stipulation to be exempt then it is considered taxable income. All the other rebate and incentives for car, solar, etc all have specific guidelines and instructions, if something does not it is taxable income. To assume it is not because it is "similar" to another incentive is only a judgement. He said that if a tax accountant states it is non-taxable they need to reference the IRS stipulation that it is not. I spent 30 minutes covering every EV and green incentive with him. Until I see something IRS specific that states otherwise I will consider it taxable income and if the IRS asks why it was not claimed you need to provide that documentation. He even stated only MFG rebates are non-taxable. This is not tax advice but if there is any doubt on anyones part I suggest writing the IRS for a written answer with details about the incentive and pages from the website as they are required to provide an answer.

So what did the guidelines say about the utitlity solar (pv) rebate? Ours right now is $2.15/DCW.

 

[EVDRIVER]

I spoke to an IRS special tax expert on the IRS help line today. He could not find any exemptions to the CA incentive being tax free. Unless the incentive has a specific IRS stipulation to be exempt then it is considered taxable income. All the other rebate and incentives for car, solar, etc all have specific guidelines and instructions, if something does not it is taxable income. To assume it is not because it is "similar" to another incentive is only a judgement. He said that if a tax accountant states it is non-taxable they need to reference the IRS stipulation that it is not. I spent 30 minutes covering every EV and green incentive with him. Until I see something IRS specific that states otherwise I will consider it taxable income and if the IRS asks why it was not claimed you need to provide that documentation. He even stated only MFG rebates are non-taxable. This is not tax advice but if there is any doubt on anyones part I suggest writing the IRS for a written answer with details about the incentive and pages from the website as they are required to provide an answer.

So what did the guidelines say about the utitlity solar (pv) rebate? Ours right now is $2.15/DCW.

No idea, sorry.

 

[EVDRIVER]

I spoke to the people that issue the incentive and they will not be sending a 1099 but they have got no ruling from the IRS. As far as the IRS is concerned income is income unless there is an IRS stipulation otherwise and a lack of a 1099 is irrelevant, but that has been clear for some time. Bottom line is that if you don't pay tax and get caught and can't demonstrate it's tax exempt then you will be responsible for the ramifications. The state may see this differently but that remains to be seen.

 

[LEAFer]

EVDRIVER, thanks for all the research. I'll pass it along for "further analysis".

 

[EVDRIVER]

EVDRIVER, thanks for all the research. I'll pass it along for "further analysis".

No problem, I tend to "work" the tax system except with state issued checks.

 

[evnow]

I spoke to an IRS special tax expert on the IRS help line today. He could not find any exemptions to the CA incentive being tax free. Unless the incentive has a specific IRS stipulation to be exempt then it is considered taxable income. All the other rebate and incentives for car, solar, etc all have specific guidelines and instructions, if something does not it is taxable income.

So, are all mail in rebates taxable "income" ?

 

[smkettner]

If the IRS wants a piece of it they will have to ask.
It will not be listed on my return voluntarily.