New Prime purchase. About the federal rebate

Is the tax credit based on if the vehicle is listed or based on the calendar year you purchase it?

 

calendar year you purchase it. If you purchased and took a delivery of 2020 PRIME before Dec 31, 2019, the credit will apply to your 2019 Fed Income Tax return.

 

Model year is irrelevant, it is based on purchase or in-service date.

If you signed a bunch of paperwork on December 31, but couldn't take delivery until January 2, you might be in a pickle about which year it can be claimed.

 

Thanks Salamander and Fuzzy for the quick responds!!! So Trumps 2020 budget is out, is there anyway to be sure we are not going to lose the EV tax credit this year. I would like to make a purchase this year 2020. I have not seen anything in the news or EV sites.

 

You won't be in a pickle. The correct answer is the year you put it into service, so January 2 is what you write (or type) on the form. If you took delivery on January 2, 2020, you would have to wait until 2021 to do the tax for 2020.

 

I.e. no pickle unless one was counting on collecting that credit now on the 2019 tax filings.

 

In the 2019 Federal Budget, Trump had in there to end EV subsidies. The automakers lobbied to have it taken out. They also lobbied to have it extended from 200k to 400k vehicles sold(Tesla, GM). They won to keep the tax credit alive but lost an extension part. I am worried this Budget go around 2020 it may actually get cut. I am trying to figure out if it is even in this years Budget Proposal? Have not found anything in the news about this. My concern is subsidies have expired for Tesla and GM(april) and without there lobbying influence if the proposal is in there it may pass and end tax credit immediately! So no tax credit when someone files in 2021 for calendar year 2020.

 

Nothing is certain, but as I understand it, it is more difficult to repeal a tax law that is already in action. With an election coming, they have more important things to do. My guess is it will likely to stay until the law naturally expires or Toyota exceed the quota. I can't remember the exact numbers, but I think Toyota still have a plenty of quota left. However, if the upcoming RAV4 PRIME is a big hit, the number can diminish rather quickly.

 

Entirely possible with our current Yo-Yo governance. Even if it gets cut, it may get revived again depending on the result of the election. Who knows.

 

Curious if you are anyone knows...

When quota is met, is that cutoff by date purchased?
Say if quota is met in August 2020, then all Toyota sold after are out?

I am thinking if perhaps any purchase after and people still "file taxes" earlier than others in 2021 to get it,
before purchasers pre august 2020, but those who file after the purchasers

That is probably hard to understand my drift.
I think I read that the Feds track it now by vin numbers? Are they for when the sale is made,
or when the credit is given during tax time?

 

It gets me thinking, when 20,000 purchases are made OVER the quota,

wont know since not every purchaser may qualify for the $4502
but wont know when quota is met until tax season

first come first serve, as in if someone plans to get the $4502 (they know or thought before the quota met)
but perhaps files an extension and doesnt file until too late (quota is already met)?

 

I understand what you are asking, but I don't know the answer for sure. It may be written in the tax code somewhere, but even if I find the code in the IRS vault, I probably do not understand it anyway. LOL But reading from what happened on Tesla, I think the cut off is set at Dec 31 of the tax year rather than the exact date when the allowed quota is reached. Look at Tesla example here. What You Need to Know about the Federal EV Tax Credit Phase Out | Tesla It has cut off for $7500 full credit set for the purchase made On or before December 31, 2018.

Also, the credit amount will tapper down, so even if you don't purchase the car in a year with a full credit, you can still receive 50% of the credit for next 6 mo, then 25% for another 6 mo.

 

@Salamander_King

So it seems that the Full credit is realized when quota is met for the 200,000th sale,
but actually still applies for the remainder of the calendar year if I understand correctly.

That makes much sense and then leaves less to be confuzzeled about

 

That's how I understood it from the Tesla example I linked. Tesla met the 200K quota in Jul of 2018, but any Tesla purchased that year up to Dec 31 was qualified for a full credit.

 

Thank you so much!

 

See my post at #40 for an illustration around GM's cap, there was more than 3 months from when the cap was reached until the phase-out started, then the phase-out lasts a full year:

"IR-2019-57, March 26, 2019

WASHINGTON — The IRS announced today that General Motors, LLC has sold more than 200,000 vehicles eligible for the plug-in electric drive motor vehicle credit during the fourth quarter of 2018. This triggers a phase out of the tax credit available for purchasers of new General Motors plug-in electric vehicles beginning April 1, 2019.

Qualifying vehicles by the manufacturer are eligible for a $7,500 credit if acquired before April 1, 2019. Beginning April 1, 2019, the credit will be $3,750 for General Motors’ eligible vehicles. On October 1, 2019, the credit will be reduced to $1,875 for the next two quarters. After March 31, 2020, no credit will be available."

 

Different laws then, but I recall I rushed to buy 2006 Prius in late Sept_06 to get the full amount before the 1/2-period.

 

OK, that means it's not automatic Dec 31 cut off. The cut off period for the full credit can happen during a tax year. It seems from the article, Tesla reached 200K in Jul of 2018 but had the full credit until the end of that year. When did GM reached 200K mark?

 

My interpretation is that the credit will first be reduced (50%?) before being completely removed as target numbers are reached, provided subsequent legislation does not rule otherwise. The date the vehicle is put into service (not the date of sale) is used to determine eligibility.

We were motivated to upgrade our 2018 Premium to a 2020 Limited due in part to concerns of losing some of the sweetness of the deal, if credits, rebates, and dealer incentives were to diminish (plus, we really lusted for some of the upgrade features ).

 

If anyone finds out if Removing the federal EV tax credit is in Trumps 2020 tax proposal could they please post. Thank You!