06-01-2021, 08:47 AM | #1 |
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How does federal tax credit work?
I see a lot of good 45e deals posted here and understand it comes with a $7500 federal tax credit. I have been reading that the tax credit applies only “up to” your taxes owed, i.e. if you only owe the federal government $1500 in taxes at end of year, the maximum credit you can use is $1500.
Maybe I am asking the wrong group car owners here, but does everyone expect to owe at least $7500 in federal tax next year? |
06-01-2021, 08:57 AM | #2 |
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AFAIK, the only limit to the $7500 federal tax credit is when it phases out which will likely not happen after this year given how slow production is. it's a credit that directly applies to either the tax you owe or the refund amount.
after filling, I owed $1200 in federal taxes, but the federal tax credit converted it to a refund of $6300 due the excess ($7500-1200). |
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06-01-2021, 09:14 AM | #3 |
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I believe it's based on your total federal tax liability, not what you owe when you file. If your total federal taxes in the year you purchase amount to $7500 or greater, then you are eligible for the full tax credit regardless of how much you may owe or be owed via refund when you file. That's my understanding at least.
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06-01-2021, 09:24 AM | #4 |
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that sounds more official! It's the federal tax liability based on AGI. safe to say if someone can afford a G05, he should easily meet that criteria.
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06-01-2021, 09:29 AM | #5 |
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Yes it's the federal tax liability based on AGI.
If you had a liability of 30k for the calendar year, and if you had a refund coming of say $3k (because you overpaid), you will get back 10,500. I filed for 2020 in late March, and I am still waiting. IRS rep said the department handling my return is very backlogged. So I still sit here waiting. |
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06-01-2021, 10:22 AM | #6 | |
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Quote:
extremely backlogged...I read they still have tens of thousands of 2019 tax returns to process! UPDATE 6/12/2021: IRS refund received Last edited by nZtiZia; 06-12-2021 at 08:54 AM.. |
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06-03-2021, 05:29 AM | #9 | |
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Personally, I was able to claim $7500 back 2 years ago when I purchased the Volkswagen eGOLF. Will be claiming the 45e I took delivery last month when I file next year. |
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06-13-2021, 07:44 AM | #10 |
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I haven't submitted my tax for but will for the 2021 year. Has anyone run into making too much, is there a max income that you won't get the 7500 if / when filled?
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06-15-2021, 07:04 AM | #11 |
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no max income cutoff; just have to be liable for >$7500 tax to get the full credit (adjusted if <$7500)
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