$3100 Prius tax credit question.

For sure you wouldn't get a rebate...if you only pay $2200 in taxes, then your tax credit would only be equal to that amount...

You might want to look into whether you can carry over the tax credit to the next year.

 

On the other hand, it will be your 2006 income that will be taxed -- so you just might have enough income if things work out.

 

I'm not too sure about that. I had a bad year (out of work for a good part of it). I paid about $600 in federal taxes and got back about $2800 (earned income CREDIT). This makes me think you may still get it since it is a credit.

 

yea... I'm not sure about not getting it all back either..... I know uncle sam doesn't like giving away money... but thats exactly what hes doing when he allows you not to pay what you normally would?
A credit should be a credit.. you should not be penalized because you make less.
If they are going to give you a credit to equalize the pain of the extra cost of buying a hybrid, they should not be able to renig if you didn't have taxes to pay in because of being out of work or injured etc.

Now just because this is what "as it shoud be" doesn't mean thats the way it is!
I'm surprised this issue is not cleared up by now.
Maybe it is and I'm unaware.

 

that is probably wrong there. a credit is money paid out even if you PAID NO TAXES AT ALL

hope that clears it up

 

Yay.. way to go Dave!

 

Not having deductions should have no bearing on anything as far as the credit goes.
If Dave is right

, then you should get 3100.00 in addition to what you would have gotten anyway. I just hope Dave is right.

At least thats the way I'm interpreting this whole thing.

there has been discussion in prior threads indicating you can only collect up to the amount you paid in..... This is the issue we are discussing. That may indeed not be correct. We may never really know until it happens, but it would be nice if a tax person who really knew could comment.

Dave seemed to answer with a fair amount of certainty that you get in back period!..
I hope he's right!

 

i guess my post was not clear enough...

 

tax credits are always applied to the return after the deductions, after the tax tables, after EVERYTHING.

its always the last part of the form.

since there is no line that says if line X is greater than line L (this is the line that that you have filled in after all the deductions) enter zero on line Y. this is the tax owed to you.

that would mean that even if you paid in $1000... you owed $500 that would mean a return of $500 right? that is when the tax credit is applied.

with the $3100 tax credit] you would have a check of $3600... that is how a credit works.

now if you were single with children in a crap job, you would know about this since the head of household credit can be huge. my neighbor got back $3700 and probably paid in $400 at the most... (only works part time in summer at fruit stand)

 

For all I know you guys are right...I just tried to think it out using a limiting test...imagine someone who doesn't work, pays no taxes but has $23,000 in the bank. He buys a Prius and the US government says thanks, here's a check for $3100 for buying the Pruis. I know it doesn't seem much different than a guy who pays $40,000 in taxes and gets it knocked down to 36,900.

Seems like a loophole would be to find someone in my family who is retired and have them buy the car for me...

I guess you should go to H&R Block next year, or consider Turbo Tax, I know for sure their services are deductible

And by the way, I have been single with children in a crap job...

 

Mdmikemd, is correct as stated above, but I doubt very much if you'll be able to carry over the remaining portion of the tax credit to the next year.

 

Here's an article where this guy explains that you lose the tax credit if you don't pay $3100 in taxes. He basically seems to recommend my loophole idea of having someone else buy it for you.

Looking at the IRS website, the EIC allows you to get a refund. That seems to be a specific case of a single parent with low income but it may not apply to other types of tax credits. The EIC was the only case where I could find you may get a refund at the IRS web site. I didn't look too hard.

Read this article, it seems to answer the questions.

http://taxes.about.com/b/a/223279.htm

 

this is the part that is confusing this issue.... "the other is not refundable like the Hybrid Tax credit".... the hybrid can't be refundable, because it was never paid in?. "Re" fund means to give back?

Its not a refund.. its a credit! a credit is a credit?.. ... if you have 23000 in the bank and work none all year, you should still get your 3100.00 "credit" from uncle sam the way I understand it... But I'm just going by what makes sense... I'm not an expert.

Is that what you understand it Dave?

And if so... to clear the air and end the confusion, what credentials or references do you get your convictions?

 

EIC and Additional child tax credit are the only refundable tax credit out there.

 

DHonzik is quite right.
I'm sorry but, if you owe less than the credit, you will only get that portion of the credit which brings your tax to $0. (If you only owe $2000 in taxes, you will only get $2000 of the credit, bringing your tax burden to $0.)
Also, you cannot carry over any "unused" portion of the credit to next year.

 

What is meant by refundable is that you would get the full tax credit (ie $3100) reguardless how much tax was owed or not owed. Nonrefundable means that you would get the amount of tax credit equal to your tax liability. I have volunteer as a VITA rep in the past.

 

So say you normally get a refund on your taxes, The Hybrid Credit wouldn't help you much because you can't get a hybrid refund you didn't pay in? If you do your taxes and would get back say, $500, before the credit was calculated, then add the credit, you would still get back $500?

But if you would owe $500, then you could use the Hybrid Credit for $500 (or up to 3100) so the balance would be $0?