Prime tax credit

The Prime qualifies for a $4,502 federal credit.

Plug-In Electric Drive Vehicle Credit (IRC 30D)

For vehicles acquired after December 31, 2009, the credit is equal to $2,500 plus, for a vehicle which draws propulsion energy from a battery with at least 5 kilowatt hours of capacity, $417, plus an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours. The total amount of the credit allowed for a vehicle is limited to $7,500.

 

Just have your purchase agreement/Vin #, and give it to your tax man at tax time.

 

Hopefully the tax man/woman will know. I heard that you can't be above a certain income threshold? And/or over a certain refund amount. There's a thread around here somewhere.

 

The person you contacted might be wrong. http://www.energy.sc.gov/files/view/sc-sch-tc-48a-form.pdf The Prime battery has a capacity of 8.8 kW-hr.
"South Carolina taxpayers can take advantage of an income tax credit for buying or leasing a new plug-in hybrid within the state.


Specifically, the credit comes out to $667, plus an additional $111 for vehicles with at least five kilowatt-hours of battery capacity. For each additional kilowatt-hour of battery capacity beyond the first five, you get another $111. The credit maximum is $2,000.


To qualify for the credit, your PHEV must be manufactured primarily for public street use on roads and highways. This excludes low-speed and medium-speed vehicles which typically travel at maximum speeds between 20 and 25 miles per hour (mph) and 30 and 45 mph, respectively.


Furthermore, you must be able to provide the Department of Revenue with certification from the vehicle manufacturer* of your PHEV’s number of kilowatt hours of battery capacity, and that it meets the following qualifications:

• Has four or more wheels.
• Shares the same benefits as an internal combustion and electric engine with an all-electric range of at least nine miles.
• Is propelled by a traction battery.
• Has a battery capacity of at least four kilowatt hours.
• Recharges its batteries using an external energy source."

But, however, there is a yearly max total payout, and you might have missed it.

 

Since the car doesn't pay the tax anyone at the dealer will have no idea how much of the Federal tax credit any purchaser will be able to claim. In NJ EV purchases are exempt from tire and sales tax but Nissan dealers in particular have been known to try to collect the taxes when selling LEAFs.

Low reportable income, AMT and the other misc. credits being claimed are the culprits for not being able to claim the full credit. Any tax preparer who doesn't know how to handle the EV credit should be fired.

 

Jim, many states have a tax break in addition to the federal credit. Bob referred to the South Carolina tax credit, and I linked to his South Carolina form for that credit. My state of Washington has a sales tax exemption if the car has a battery range of 40 miles or more...so--I didn't get my state tax break with the Prime.

 

I was just reading an article in Extreme Tech, siting the $4500 tax credit. This would be great if...
1) it was accurate, and
2) it went above and beyond any other standard income tax credits to give an additional $4500.

Between our standard deductions and our small business, we currently receive the maximum allowable refund for our household income. It's a big part of why going solar wasn't cost effective for us. It's a tax incentive NOT a grant. it SHOULD be done as a grant, but that's just my opinion and it will never happen.

 

In California, the state provides a $1500 rebate, completely unrelated to taxes. You send in the application, they send you a check. Real simple.

The federal credit is not effected by AMT. The federal credit reduces your tax bill for the year, down to but not less than zero. It has nothing to do with refunds you may or may not get, which is effected by how much you paid in payroll withholding or estimated tax payments.

 

Fill out the form as I did last week and you'll see how the $4,502 federal tax credit works

https://www.irs.gov/pub/irs-pdf/f8936.pdf

 

what standard income tax credits are you currently receiving? i have never heard of any. you aren't thinkinking of deductions, are you?

 

I am thinking of deductions and credits. There is a max on what the fed will give back overall. I have even qualified for, but not been eligible to receive, additional child care credits because you can only be refunded so much money.

 

interesting, is it a fixed amount, or a calculation?

 

There are two kinds of tax credits. One kind ("refundable") can reduce your tax liability to less than zero, so you can get a refund beyond what you paid in with withholding and quarterly payments. An example is the earned income tax credit (EITC) . The other kind ("non-refundable") can only reduce your liability to zero, so you cannot get back more than you paid in. The EV credit is of the latter kind, as is the child and dependent care credit.

 

Just to beat the horse with a different kind of club . . .

If any of you use a home tax program, you can model this yourself using your 2016 saved tax file. You will need a valid real life 2016 VIN# so for playtime use 1N4AZ0CP8GC300368 2016 Nissan Leaf purchased 6/1/2016 with kwh of 8.8 (playtime not reality) and plug this into Federal Tax, Deductions and Credits, Energy Efficient Vehicles (form 8936)

Don't save the file

After inserting these "what if" numbers, you will see that IF after everything else, you have enough taxable Income to have a tax liability exceeding $4,502 after other credits and "individual variable junk" (technical term) you will qualify for the entire $4,502 federal credit.

This has nothing to do with how much withholding you have paid in or estimated tax payments. The withholding and/or estimate payments AND the $4,502 credit all add together to reduce your total tax liability and depending on which is larger, whether you have to pay more or get a refund.

The final word is if after everything is said and done and you have more than $4,502 in federal tax liability before credits, you can take the full $4,502 Prius Prime credit.

This fits 95% of the people here, but there are always exceptions and they usually TYPE THE LOUDEST, so verify what I said for yourself.

In 2016, we received a $1,935 federal refund. I added the playtime Nissan info in the example above and Turbo tax showed we'd have gotten a $6,437 refund if that scenario happened last year. (1,935 + 4,502 = $6,437)

This will give you an idea of what your 2017 tax return will look like.

 

Wow. Thanks. That was genius. I still had turbo tax on my PC. after doing this I indeed will get the full tax credit.

bh

 

Do people think this $4,502 tax benefit will be carried over unchanged to the next tax year? (ie: for people that buy the Prime say in Jan 2018)

 

Some where on here I read a post that effectively said what the tax credit allotment was for each manufacturer. Based on current sales, 2018 looked OK.The credit allotment might get low in 2019.

 

I'm glad it worked for you. Keeping older versions of TurboTax is not a bad thing.

 

i think it will, congress doesn't move that fast, and this is a blip on the budget radar.