[dk74]

So I'm interested in buying Niro plugin 2018 and hoping that tax credit still applies. IRS states "You may be eligible for a credit under section 30D(g), if you purchased a 2- or 3-wheeled vehicle that draws energy from a battery with at least 2.5 kilowatt hours and may be recharged from an external source".

Supposedly it contains 8.9 kW battery. What would be the tax credit?



This is based on first 200K sold vehicles per IRS.

Any help would be appreciated.

 

[cockedandglocked]

The tax credit is about $4500. Note that you only get the credit if you pay $4500 or more in federal income tax - if you pay less than that, then the maximum tax credit for you is only the amount of your total tax bill.


They are still offering the tax credit for the Niro, I'm not sure how much longer that will last, but I'm sure it'll keep going at least another year.


As luck would have it, I would have OWED the IRS almost exactly $4500 for under-withholding this year. So my Niro saved me from having to write an unexpected (and very unpleasant) check to the IRS for $4500 next April.

 

[dk74]

The tax credit is about $4500. Note that you only get the credit if you pay $4500 or more in federal income tax - if you pay less than that, then the maximum tax credit for you is only the amount of your total tax bill.


They are still offering the tax credit for the Niro, I'm not sure how much longer that will last, but I'm sure it'll keep going at least another year.


As luck would have it, I would have OWED the IRS almost exactly $4500 for under-withholding this year. So my Niro saved me from having to write an unexpected (and very unpleasant) check to the IRS for $4500 next April.

Thanks for the info. I know this might be an outside the scope question but how do I check on my previous year taxes what I owed to IRS (what would I be looking on 1040)?

 

[dk74]

To elaborate more. In my example, I typically get credit back from IRS and its due to mortgage taxes that I can write off. I want to make sure that I would still qualify for the tax credit. Thus the reason on where would you look for that in 1040 i.e.

 

[cockedandglocked]

Line 63 on a form 1040.


If the number was higher than $4500, then you're good to go (as long as your tax situation will be similar this year)




Generally speaking, this means you'd need a taxable income of more than about $39k (your actual income minus your standard or itemized deductions)

 

[cockedandglocked]

Note that I'm not a tax expert and my numbers could be wildly innacurate - that's just from some quick data I found on the IRS website just now

 

[dk74]

Thank you so much. Let me check on that. This is good information!!!

 

[dk74]

Line 63 on a form 1040.


If the number was higher than $4500, then you're good to go (as long as your tax situation will be similar this year)




Generally speaking, this means you'd need a taxable income of more than about $39k (your actual income minus your standard or itemized deductions)

To confirm line 63: "Add lines 56 through 62. This is your total tax " Correct?

 

[dk74]

Found a nice video about where to look on your taxes - cockedandglocked you were right.

Now, will the tax credit work if you "lease" the vehicle? Or does it only work with purchasing?

 

[cockedandglocked]

Typically with a lease, they immediately apply your rebate as part of the down payment, and then the leasing company gets the rebate from the IRS later. So essentially you get "loaned" the full rebate (regardless of your tax situation), immediately.

 

[dk74]

As again thank you for the information. At the beginning of this thread, you said 4500 for this car. How did you come up with this number or can you share the kb explaining that?

 

[cockedandglocked]

https://www.irs.gov/businesses/irc-30d-new-qualified-plug-in-electric-drive-motor-vehicle-credit#collapseCollapsible1545258482802

 

[dk74]

Typically with a lease, they immediately apply your rebate as part of the down payment, and then the leasing company gets the rebate from the IRS later. So essentially you get "loaned" the full rebate (regardless of your tax situation), immediately.

Just spoke with one of the dealers. They told me they have nothing to do with with the tax credit and that with a lease I can still "claim" it on my taxes. Now I'm confused. May have to reach out to some tax advisor for assistance with this.

 

[cockedandglocked]

Just spoke with one of the dealers. They told me they have nothing to do with with the tax credit and that with a lease I can still "claim" it on my taxes. Now I'm confused. May have to reach out to some tax advisor for assistance with this.

Maybe depends on the leasing company, then. My dealership told me the opposite, and that's how it worked when my coworker who leased a Nissan Leaf recently. Either way you'll get the tax credit, whether it's immediate or next year.

 

[deltasmith]

Just spoke with one of the dealers. They told me they have nothing to do with with the tax credit and that with a lease I can still "claim" it on my taxes. Now I'm confused. May have to reach out to some tax advisor for assistance with this.

I'm pretty sure your sales person is full of Bunny Stuff. They are telling you what they know you want to hear. The owner of the car is entitled to the tax incentive. As a leaseholder, you might be getting a better rate because they've built their expectation of their own tax rebate in to the lease price, but I don't think you will be entitled to any tax incentives. You might still be entitled to certain other incentives though.

 

[yticolev]

Tax credits are not immediate. You first have to file your income tax return to receive any benefit. This one is a nonrefundable tax credit so it must be subtracted from your taxes paid and/or owed. The term nonrefundable is a bit confusing as you may indeed get a tax refund in total. For example, if you actually paid $6,000 in income taxes last year and bought a PHEV with a relevant tax credit of $4,500, you will get a check for that amount. But if you only paid $2,000 in taxes last year, that is the maximum refund you will receive.

The first time homebuyers credit of 2009 by contrast was a refundable tax credit. If you paid zero taxes, you still got a check for $10,000 (if memory serves).

 

[deltasmith]

I wouldn't sign up for a lease if my decision was based on an assumption of getting a tax credit. My concern about that comes from various places, including this (rather old but interesting to read) article: https://www.greencarreports.com/news/1100513_electric-car-drivers-love-em-but-dont-buy-em-why-leasing-rules

 

[fredct]

Edmunds agrees: if you lease you don’t get the credit, the manufacturer does.
https://www.edmunds.com/fuel-economy/the-ins-and-outs-of-electric-vehicle-tax-credits.html

So you better use that to negotiate the lease rate before hand or it’s gone.

 

[cockedandglocked]

Tax credits are not immediate. You first have to file your income tax return to receive any benefit. This one is a nonrefundable tax credit so it must be subtracted from your taxes paid and/or owed. The term nonrefundable is a bit confusing as you may indeed get a tax refund in total. For example, if you actually paid $6,000 in income taxes last year and bought a PHEV with a relevant tax credit of $4,500, you will get a check for that amount. But if you only paid $2,000 in taxes last year, that is the maximum refund you will receive.



The first time homebuyers credit of 2009 by contrast was a refundable tax credit. If you paid zero taxes, you still got a check for $10,000 (if memory serves).

$8,000. I remember because I took that credit too

If I'm gonna be paying for all these tax credits for people, I'm sure as **** going to also claim them for myself where I can!

 

[fredct]

You can make a credit “immediate” for yourself - at least start immediately - by adjusting your withholding to get more in each paycheck instead of waiting to get the big check when you file.