Prius Prime help with tax credit

A post earlier stated you need IRS form 8936.

 

For California you can fill out this form up to 180 days after purchase. I'm waiting for my dmv paperwork just to make sure I have all the needed info.

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The federal irs form is done when you do your taxes early next year. Turbo tax or similar should walk you through that.

 

What state do you live in, for state tax discount?
As far as Federal tax discount, I usually use TurboTax and that works, it has the form needed.
Note that the Federal credit it is a tax credit, so you would actually have to owe $4500 or more in tax to get the credit.

 

So let's say you owe $3000. Would the $4500 cover that and if so, what about the difference of $1500...I would like to think it would count as a refund or could be applied to next years tax bill but knowing the IRS, they probably get to keep it!

 

You must have a tax LIABILITY of at least $4500 for the year to get the full tax credit, whether that's owed at tax time or you've been paying in throughout the year doesn't matter. And since this is a personal tax credit, there are NO carry-forwards into the next tax year if you can't utilize the entire $4500.

 

My understanding is the excess withholding will come back as a refund.

Bob Wilson

 

If you don't have at least $4500 worth of tax liability then a Prime probably isn't the car you ought to be buying either because you don't make enough money or you make too much...

So....
If you're not sure of the difference between a tax deduction and a tax rebate, get some real advice from a real person that really knows real tax law before you base a $30,000+ purchase decision on state and federal tax kickbacks.

Here's the thing.
The last time I looked, you only need something like $35,000 worth of taxable income to get the whole federal kickback, and if you live in a place where the state also kicks in for some cheese, then you're probably already paying a lot of taxes!!!
That's just the way it seems to work out.

If you're an EZ-er and you're not sure that you have $4500 in taxable liability, it would be worth your time and money to get some advice with a tax prep service or an accountant....or at least take a look this last year's tax returns.
I would not recommend a company whose name sounds sort of like 8&R Clock, based on the trials and tribulations of some friends and family....with tax returns that are more complicated than one can do in 10 minutes with a crayon - but that's anecdotal.
One of the many benefits offered by my beloved company is tax prep service by a company that may or may not be that same company, and I still find it to be not worth bothering with.
TIFWIW.

 

Again it's your liability that matters. Say you've paid in $3000 throughout the year, and you owe an ADDITIONAL tax of $1500 when filing, your total liability would be $4500 and the full credit would apply. You would get back the $3000 you've already paid, and not owe the additional tax of $1500. You'd utilize the full credit.
If you've paid in $3000 throughout the year and you owe nothing more at tax time, then $3000 is your total liability. You would only be able to utilize $3000 of your credit and you would get that back as a refund. The additional $1500 is lost since it cannot be carried forward.
If you've paid in $8000 throughout the year and that is your tax liability at tax time, you would receive back $4500 as a refund - the full amount of the credit.

EDIT: I agree with the post above mine! It wasn't there yet when I posted my answer....

 

Mike you probably also get a state rebate from Maryland...we need to get an update on that MD status for Prime.

The Federal $4500, if you only owed $3000 tax, you would lose the excess $1500.
However, we are talking about LINE 56 (Total Tax after credits) on last year's FORM 1040 (nothing to do with withholding).
Many new Prius buyers will tend to be over $4500 tax on that LINE 56 and get the $4500 whole credit amount.
In some cases (eg student or retired) you could possibly fall below that $4500, in which case you might want to consider if there are financial moves to make in 2016 to bump up the FORM 1040 income (such as IRA withdrawal etc) or winning the lottery.

Alternately, sometimes leasing makes sense, whereas as the Lease company gets the credit, but you get a cheaper lease.

 

You might also want to check with your power company. I applied for a $50 rebate from our Electric Company here in PA. I didn't even know they had one but a link from the State site for their rebate pointed me to the power companies site.

 

Thanks for the info and advice...line 56 might get me the full amount. Maryland has an additional $2500 for the Prius plug-in which, I would hope also applies to the Prime.

 

Think you get $125 x Battery Size or about $1100 , not too shabby though! (by July 1 2017 subject to extension)
http://www.mva.maryland.gov/_resources/docs/VR-334.pdf

(PS- I assume you are thinking 2017 purchase, so when I was saying 2015 FORM 1040, I was just pointing out what your tax needs to be but that would be 2017 FORM 1040, assuming your 2017 situation is similar to 2015)

 

Kevin do you know, can I get the federal tax credit if I lease or only if I buy the prius Prime??

 

Only if you purchase, but that means the lease company gets the credit. which means you should indirectly get the credit. This can be a good approach for those who do not qualify for the credit.

 

Keep in mind that the leasing company does not have an obligation to share their tax credit. You, the lessee, need to check all the numbers to ensure the total amount of the tax credit is accounted for in your payment.

 

Does any know how long the tax return last ? Is there any limit number of prius prime ?

Posted via the PriusChat mobile app.

 

I am not aware of any limit on number of Plug_in vehicles you can buy and deduct.
Your first question I do not understand.

 

There is no expiration date that I know of, but when a particular car manufacturer reaches 200,000 qualified vehicles then the credit starts to phase out two quarters later. At current production it will take Toyota a long time to reach that limit, although if they come out with a hot selling BEV that could speed things up.

Many people are more worried about the credit being cancelled early as part of budget cuts. Potentially even retroactively. Personally I see that as less likely, but unfortunately there is no way to say for sure.