So... can someone please help me with this tax incentive situation. Some are saying that you may not get it.. depending on your income, or tax situation? Can someone please explain how this all works? I'd really like to know if I might have a shot at it???
I believe the credit is not fully refundable, which means that you must have enough income to have a tax liability of at least $2,500 in order to get the full refund. If you only owe $2,000 in federal income tax, for instance, then you only get $2,000 back. This is opposed to a fully refundable credit which you get back no matter what. One way to potentially be disqualified for this tax credit is if you have a high gross income offset by large number of deductions or credits. Then even though your adjusted gross income (AGI) is low, you may have to pay AMT, or Alternative Minimum Tax. This may erase the tax credit depending on how it goes. If you have never had to file under AMT then this does not apply to you. Please note Federal income tax does not include payroll taxes such as Social Security Tax or Medicare.
Here is a webpage from "Plug In America" that listed the various States, and Federal incentives and tax credits availble: State & Federal Incentives | Plug In America
If your income is high and you now pay AMT then you will not save any money on your tax by buying a plug-in.
Has the $2500 tax credit been officially approved for 2012 Prius Plug-in yet? The press release announcing pricing (here) includes this footnote:
are you absolutely sure about this? the LEAF federal tax credit is AMT-proof. is there some reason why the PHEV prius credit is not?
Your right - It looks like the IRS fixed this effective with the 2009 years taxes. You can get the credit even if you pay AMT.
You need to do a draft of your 2012 taxes to see if you will get all or just some of the credit. There are just to many variables involved to know which credits and deductions will impact each other. I have cash but little taxable income so no credit. From a post I made in another thread. "The IRS just decided for me that I should not get any plugin car. Form 8936 Qualified Plug-in Electric Drive Motor Vehicle Credit Line 14 If you cannot use part of the personal portion of the credit because of the tax liability limit, the unused credit is lost. The unused personal portion of the credit cannot be carried back or forward to other tax years. For me this would be most if not all the credit. An extra $2500 is just to much when a Mainstream 2012 Gen III v or V will be available at near invoice in the near future. Bummer and just when I talked my self into it."
It's best to NOT give tax advice if you're not a CPA and/or an attorney ... especially if you ARE ... and your advice is wrong iow, I got news for you ... most people who're smart enough to make a TON of money, are also smart enough to get professional help, who then structure their income in the tons of legal tax shelters so that they never pay a penny of ATM. Equally important, some states dole out incentive money. It is not taxable at the federal level, nor does it turn on an income cap that activates a state's AMT. Maybe you should see the thread I posted here: http://priuschat.com/forums/prius-h...27-state-rebate-money-your-prius-plug-in.html .
It depends on your definition of wealthy. Many people are not wealthy enough to buy a car. More are not wealthy enough to buy a new car. If you had to borrow money to buy your car then you weren't wealthy enough. Most tax credits go to the "wealthy" as they buy the legislators and write the legislation that is voted on.
