Maybe We Should NOT Count on the $4,500 Federal Credit

On the one hand, the current regime hates the environmental regulations that cleaned the air we breathe and protect the water we drink. On the other hand they hate taxes on wealthy people. Most of the people who can afford these vehicle, while not true billionaires far from impoverished. Cutting our taxes is a thing they like...it starves the government that they hate. So maybe they'll increase the credit.

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I would be for that!!

#1 in Easley,SC

 

I know this was covered in other threads, but the initial attraction of the $4500 credit is waning for me because I would have to reconfigure finances to owe enough income tax to allow the credit to apply. My understanding is the $4500 is only applied to amounts that you owe on federal tax. No rebate. So if you are currently expecting a tax return, the $4500 credit is out.

 

You don't get a refund of the tax credit, but you would get an increase in your refund based on your pay check withholdings throughout the year. In other words, your money taken out of your check would be returned to you after the tax credit covered your tax liability instead of your money covering it up to $4502. If your tax liability is less than $4502, then your tax credit will be the same amount as your tax liability and you would get all your money back. If your tax liability is more than $4502, $4502 Will go towards your liability and your withholds will cover the rest. You will get a $4502 increase in your refund if you normally get a refund.

#1 in Easley,SC

 

No, it is applied to what you owe before you apply what you had taken out of your income. 5000 liability - 4502 credit = 498 liability + 1000 withholding = 1498 refund.

 

dalcon95, 2 minutes ago

You're fast.

 

It's not a credit from what I read. It's a liability reduction. So if you over pay your taxes throughout the year, you'll get a refund for what your new tax liability difference is.

Posted via the PriusChat mobile app.

 

a credit, and a liability deduction are virtually the same. a tax deduction is what is different.

 

It is a credit against your initial liability. As far as paying your taxes throughout the year, I don't know how that works. There are people on here that do.

 

Found this article from March talking about some of the factors and parties involved in any tax reform and EV tax credt;

What Happens If Congress Nixes the $7500 EV Tax Credit? | News | Car and Driver | Car and Driver Blog

 

It is called a non-refundable tax credit. It only applies to your tax liability.

#1 in Easley,SC

 

I just hope they are so distracted by all the other stuff going on that the 2017 people escape with the tax credit. But you can bet it is on a short string.

 

Making a realistic assessment of what is going on is not being a cynic.......just because the obvious conclusions are negative.

Have you been living under a rock for the last 4 months ??

With the sweep of the Executive Order, #45 has single highhandedly made.....or un-made......more laws than Congress sometimes does in a whole year. And all with no checks or balances. OK, there will be a few court challenges but doing that takes $$$$ and there is a limit.

 

The rock that I live under here in liberal California has told me that this has been the most ineffective 100 days for any president in a long time.

You've just proven that laws are continually being challenged. This president is undoing laws he doesn't like. The people are challenging executive orders they don't like. Sounds like checks and balances to me.

There is nothing wrong with making realistic assessments of what is going. It's when you arrive at "obvious" conclusions, that's when it gets dangerous. It was obvious to me this man had no chance in hell at being president the night before the election living under my rock in liberal California. Without a crystal ball it is not obvious the EV tax credits will be repealed.

 

Yes! I definitely have had more than a $4500 tax liability (for the 2015-2016 filings that I checked). My W-4 withholding exceeded that, so I received refunds. So I would be able to apply the credit against my liability, then more of my withholding would be refunded.

I have got to love that. Thank you for the clarification.

 

So......what conclusion did you come to AFTER the election ?
My conclusion is: People in general are a LOT more stupid than I ever dreamed.
I think you and I are on the same page here.

But I also don't think that THIS is a proper place to be debating politics so I'm done.

 

I don't think the Paris Accord necessarily has anything to do with EV car tax credits. I have the feeling that the president thinks, just like NATO, the US is paying an a lot more than it should and other countries are freeloading and we can't afford to keep doing this because we are already broke. On this, I agree.


iPhone ? Pro

 

Yeah I'd agree. This isn't the proper place to debate politics but as the discussion had diverged into tax preparation and tax credit versus tax deduction versus tax liability. I think it's turned into a free for all.

My conclusion from the election is to not take anything for granted even if it's obvious. And to stay on topic. Don't buy the car dependent on the tax credit. Expect that you'll get it but don't rely on it.

 

With the Gigafactory, and other massive battery investments coming on line, the tax credit may not be needed anymore in 2018. The per kWh value of the credit is already more than that the automakers' kWh costs.