$3100 Prius tax credit question.

<div class='quotetop'>QUOTE(Nemecio Bangungot @ Feb 4 2007, 01:19 PM) [snapback]385230[/snapback]</div>

Search the boards for Alternative Minimum Tax (AMT). It has been extensively discussed in the past.

 

How much is your tax liability before the Credit?

My guess from what you said, is that you can't get back from the credit more than the taxes you would owe based on your income & deductions without the credit. I am not sure if there is a carryover to next year for any unused credit.

BTW, I am using Turbo Tax and it says the form for the Hybrid Credit will not be available until 2/16.


<div class='quotetop'>QUOTE(Nemecio Bangungot @ Feb 4 2007, 04:19 PM) [snapback]385230[/snapback]</div>

 

<div class='quotetop'>QUOTE(Nemecio Bangungot @ Feb 4 2007, 04:19 PM) [snapback]385230[/snapback]</div>

Welcome to the site. I hope you stay to find all the other good advice. It is impossible to give a definitive answer without knowing all the specifics and I'm not running a tax consulting service here. If your total tax is less than the credit, you won't get the full credit. Did TaxCut complete the 6251? The hybrid tax credit can not reduce your tax liability to less than zero.

 

<div class='quotetop'>QUOTE(Jeffreywho @ Dec 10 2005, 09:16 PM) [snapback]171507[/snapback]</div>

I have been told that you can only get up to the amount you owe in federal taxes, but perhaps you can carry some over. We don't make enough to worry about the AMT either. We did our return today and will receive the entire $3150 as out tax bill was about $5300. Good luck.

 

Its a play on words "tax credit".. without a tax, you can have no credit against it.

Another key word, "liability"... the amount your liable for is what you owe... the credit reduces your liability.

Uncle Sam is not so good hearted to give you money you never owed in the first place..... the term "credit" seems to imply that, but its a "tax" credit and nothing more.

 

Hi all,

This is a reply to my own post.

After doing some research and printing out the tax forms (from TaxCut), I discovered a few things. I'll list out the ones that may hopefully help out this discussion.

- Our calculated AMT is zero (Form 6251), as I suspected in the first place. So, all the previous discussions about AMT does not apply to us.

- From Form 8910, our maximum credit allowable ($3150) time the phaseout percentage (100%) gave us a "Tentative credit" of $3150

- However, on Line 14 of Form 8910, there are further factors that affect this credit. Specifically, it is described as "credits that reduce regular tax before alternative motor vehicle credit." This will subtract from the "Tentative credit" of $3150. Down the list (of 14 a-c), they are
a. Foreign tax credit
b. Credits from Form 1040, lines 48-54, which are the credits for child and dependent care (line 48), credits for elderly or disabled (line 49), education credits (line 50), retirement savings contributions credits (line 51), residential energy credits (line 52), and child tax credit (line 53). Line 54 are credits from Form 8396 (mortgage interest credit), 8839 (qualified adoption expenses), and 8859 (DC first-time home-buyer credit).
c. Qualified electric vehicle credit.

- Having calculated the tentative minimum tax from the net regular tax (from form 8910), it looks like the credit from the line 14 of form 8910 reduced the tax credit. I found it a bit odd that the difference between the tentative credit and the alternative motor vehicle credit is the child tax credit (which we have). Does this make sense? Looking at the numbers, it looks like the child tax credit reduced the alt m.v. credit down, so that if I added the child tax credit and the calculated credit from Form 8910, it adds up to $3150.

Does this seem a bit sneaky to anyone else? If anyone else got these calculations, please let me know.

Thank you for your patience,

-Nemie

 

- However, on Line 14 of Form 8910, there are further factors that affect this credit. Specifically, it is described as "credits that reduce regular tax before alternative motor vehicle credit." This will subtract from the "Tentative credit" of $3150. Down the list (of 14 a-c), they are
a. Foreign tax credit
b. Credits from Form 1040, lines 48-54, which are the credits for child and dependent care (line 48), credits for elderly or disabled (line 49), education credits (line 50), retirement savings contributions credits (line 51), residential energy credits (line 52), and child tax credit (line 53). Line 54 are credits from Form 8396 (mortgage interest credit), 8839 (qualified adoption expenses), and 8859 (DC first-time home-buyer credit).
c. Qualified electric vehicle credit.

- Having calculated the tentative minimum tax from the net regular tax (from form 8910), it looks like the credit from the line 14 of form 8910 reduced the tax credit. I found it a bit odd that the difference between the tentative credit and the alternative motor vehicle credit is the child tax credit (which we have). Does this make sense? Looking at the numbers, it looks like the child tax credit reduced the alt m.v. credit down, so that if I added the child tax credit and the calculated credit from Form 8910, it adds up to $3150.

Does this seem a bit sneaky to anyone else? If anyone else got these calculations, please let me know.

Thank you for your patience,

-Nemie
[/quote]

Nemie,

I believe you discovered the short, basic answer for most taxpayers. If one is claiming credits on form 1040 lines 47-54 (the indented column) then one is not going to receive the full hybrid credit.

A BIT sneaky? No, LOTS sneaky. Just who do you suppose wrote and passed the law? We may lament that it is not a simple, straightforward, 1 amount across the board deduction or credit available to all but it didn't happen. Look how many people would be unemployed if the Internal Revenue Code were simple. Disclaimer: I do not earn any additional income from providing tax advice or filing of forms. (It's part of my community service. Or is that my service to the community?)

 

Hi,fellow Prius owners. I went to H&R Block for my taxes and here is the scoop on my tax credit for my new 2006 Prius. I filed jointly and we had a Taxable income of $41,559,$6600 in Exemtions, Standard deuctions of $10,300, Total deductions of $18,472, deductible interest of $10,604, Taxes of $7,868. Tax Computation Income tax $5,481 before credits. CREDITS $599, Tax after credits $4,882. PAYMENTS: Federal withholding $8,467, REFUND $3585. Now the $599 credit came from the Prius using form 8834 Qualified Electric Vehicle Credit: Line 1 Enter date vehicle placed in service(MM/DD) 08/03/2006 Line 2 Cost of Vehicle-$23,966.00 Line 4- Subtract line 3 from line 2- $23,966 Line 5- Mulitiply line 4 by 2.5%- $599 Line 6- Maximum credit per vehicle -$1000 Line 7 Enter the smaller of line 5 or line 6- $599. According to the irs more than 60,000 Prius were sold before I bought mine therefor I,m only entitled to 25% of the credit.So only got 599 more on ourrefund. H&R BLOCK couldn,t be wrong? HA!HA!! later gypc

 

Uhh. You may want to look on the IRS site for clarification.

I understood the tax credit as follows:

From Jan 1, 2006 until the end of the QUARTER AFTER Toyota sells 60,000 units, and you get 100% of the credit. This ended September 30, 2006.

For the next quarter (up till Dec 31, 2006) you get HALF the credit.
For the quarter after that, you get 25%.
That's all I know.

Here is the page itself from the IRS site. You should get the FULL credit provided you bought the car before Sept 30, 2006. Good luck.


http://tinyurl.com/ydxd7z

 

<div class='quotetop'>QUOTE(pearlgreen @ Feb 10 2007, 11:11 PM) [snapback]388313[/snapback]</div>

thats what I thought too.. I don't think it dwindles that fast....

 

<div class='quotetop'>QUOTE(gypc @ Feb 10 2007, 10:25 PM) [snapback]388301[/snapback]</div>

Hi!

Two words: WRONG FORM!

The Prius is a "Qualified Hybrid Vehicle" (which makes it eligible for the Alternative Motor Vehicle Credit), NOT a "Qualified Electric Vehicle". The proper form to use is Form 8910, not Form 8834.

 

gypc, Take your return back to Block and tell them they used the wrong form just like Tag said. Ask for the most experienced person in the office. They should amend your return for free and if you make a big enough stink, you should be able to get either a refund of part of your tax prep fees or a coupon for something off next year's tax prep.

 

<div class='quotetop'>QUOTE(cmympg @ Feb 11 2007, 10:56 AM) [snapback]388428[/snapback]</div>

H&R Block screwed up big time. When you return tell them you want someone who KNOWS what they are doing this time. Besides the free 1040X argue for a refund of their fee. Next year use TaxAct for free.

 

If they aren't totally apologetic, easy going and accomodative, just tell them "maybe I should try taxcut next year!" I think thats basically what they use anyway.....

 

UPDATE!!! I went back to H&R Block with the correct form(which I printed off the IRS web site) and with some facts they redid my taxes for an extra $2500 making my refund over $6800. Than he had the nerve and try to charge me another $7.00 for the extra form. I ask if he was going to deduct the $7.00 for the electric car form and he said no it was a done deal. I have to pay the $7.00 before he will release the revised 1040. I,ve got a call tommorrow to the IRS office in Philly complaining these jerks(H&R Block) Told them I was reporting them to the better business beaure and that me ,any of my freinds and family will never use them again . He said that O>K> we have to many clients anyway. Go figure. Thanks for all the help and ill keep you posted. john

 

<div class='quotetop'>QUOTE(JimN @ Feb 11 2007, 07:21 PM) [snapback]388629[/snapback]</div>

Yeah, I used to work for the company that processed NY State tax returns in the area that checked for errors. We used to call them "H & R BLOCKHEAD" for all the stupid mistakes we would find. Like, uh, forgetting the Standard Deduction among many many others. It has been about 5 years, but I doubt it has changed that much

 

H&R Block screwed up my SO's return (she went there without my knowledge and i cant believe ANYONE with basic finances like her would pay anyone to figure the taxes) but i glanced at her return, saw some mistakes, called them and they immediately offered to fix it at no cost. that included going to a 1040 and schedule A to compute medical expenses from a 1040A

 

<div class='quotetop'>QUOTE(gypc @ Feb 14 2007, 06:57 PM) [snapback]390586[/snapback]</div>

Yea.. get names and quotes and to to the top.. I don't mean in that office.. I mean the regional office, and ask to talk to the coorporate CEO.

This jerk is embarrassed and too prideful to admit his wrong... he needs to loose his job short of a vehement apology.

If you don't get satisfaction.... go to the local newspaper and report your little incident.. I'm sure someone would love to have something juicy to print.......

Tell the coorporate CEO of your intentions to proclaim the idiocity to the newspaper.. don't just threat... give him names etc of the head editor etc... let him know you mean business...

Most likely he will tell you want you want to hear and then talk about you behind your back.... so y ou can beat him to the punch... just tell him what your gonna do and just do it!

.... regardless....

 

I must admit to being pretty disappointed in the Prius Credit. I am one of those who made the erroneous assumption that a credit was, well, a credit. Since my only experience previous is EIC ( a real credit) and a couple of state tax credits (Michigan's 'homestead' credit and a home heating credit), both of which are, um, real credits I guess I just assumed. Making me a victim once again of that old line about assume - making an nice person of u and me.

The other situation is that I am in that presumed minority of folks with a low income (thus little to no income tax liability) but a pricey car. We have investments and savings that covered the cost and a hoped-for bonus this year as a nice pay-back for our stretch and good citizenship. I expected the sale of some equities to eliminate eligibility for Earned Income Credit (which it did) but thought the Prius credit would way more than offset that. Wrong again!

I came here hoping there was some error in my interpretation. Alas, no.

So all I get is a little help in our parnership returns from the modest business use of the car that I could claim. Can't even reduce my Self Employment tax liability!

I did find a nice summary of the tax implications at http://www.hybridcars.com/federal-incentives.html

Ah well, it *is* a great car!

sobbing into my tax forms
Jim

 

I use TaxCut which is essentially the home game of HR Block. It wacked my 3150 Prius deduction down to about 2300.

I don't find Tax Cut easy to get it to show me the calculation pages it uses to get that figure.

Anyhow, disappointing... and disappointing to find on here that it's common.

I guess I'm the idiot for thinking that it was simple as in Tax owed: $13150, bought a prius... Make it 10,000 even. (round numbers for ease of math).

That's the last time I get duped into buying a Prius by the Fed.