Featured Very few EVs qualify for the federal tax credit as of 2024

The biggest problem has been the availability. It has been hard to find any Bolt, never mind the lowest no frill trim 1LT model at $27.5k MSRP. Chevy stopped the Bolt production now. What left on the dealers lots now are the last of cheap Bolt. I suspect the new Ultium Bolt due to debut in 2025 will not start that low.

With EV frenzy cooling, I can find some remaining Bolt on our local dealers lot. But no base Bolt EV 1LT at $27500 MSRP can be found. The lowest one would be more like $32k Bolt 2LT. Still, after $15k off at $17k plus tax and fees, it is the most affordable BEV out there right now. If I had to have a commuter, I would have pulled the trigger by now.

Well, it is not like the stimulus checks we all received. But it is just a figure of speech. Any way you interpret it, it reduces the final cost of the car, that is the most important thing for most consumers.

 

Thank you.

I understand the discussion now!

 

From what I understand, at least in Colorado, if you don't owe a dime on taxes you end up getting a check for the $7,500 Colorado credit.

Or you can opt to have the check sent to the dealer at the time you purchase the vehicle as long as the dealer takes the $7,500 off of your purchase price.

There are also some, like Bisco, who believe that the same is true now for the Federal Tax Credit, although I'm still not so sure.

Why do you keep differentiating between if it's called a tax credit or not? What's the difference of how you call it? Why is getting $7,500 or $15,000 by means of a tax credit not the same as getting $7,500 or $15,000 by some other means?

I understand layman's terms: For buying a particular vehicle I end up with less debts or more money at the end of the year by applying for this socalled "tax credit." I don't care if it's called a "monkeypoop advantage" or a "cyber super-dooper rocket locket money in your pocket." It's money, that's all that matters.

 

Our son living in Mass recently needed to replace his commuter. His 13 years old Fit needed to be replaced quickly. He looked for Bolt but no luck. Ended up buying Kia Soul, one of the last handful subcompact with starting price below $20k in the US.

 

When you have to generate a $15,000 tax liability you will find out very quickly why that is important

 

Well duh!

It's also a "when and if" at this point.

When I got my Leaf it was $12,000 used, but I was able to get a $3,000 Colorado Tax credit and only had owed some $200 in taxes to Colorado and still got the amount in my tax refund. So there! The term "Tax Credit" does not necessarily mean you need to generate the tax liability. It depends on what the laws say about said "Tax Credit" and how the Department of Revenue in question (state, federal) interprets those laws.

 

I don't get what you mean here. A person either have tax liability or do not. If your liability is lower than the non-refundable tax credit, then you do not receive unused credit after filing the 1040 tax form, unlike the refundable tax credit. That was the way EV tax credit worked up untill 12/31/2023.

As I understand it, starting this year, the EV credit is now applied at the point of sale, and no longer subject to buyers tax liability, although the income limit still applies. So for all practical purpose, it is now similar to a government rebate.

For pre 2023 EV tax credit, a person with a low or no tax liability could not benefit from it. This was one of the big problem. I don't know what your use of "generate liability" means. But a few ways I knew and used myself are increasing income and converting tax deferred 401k to ROTH. Both tactics results in more taxable income thus increased tax liability, but knowing that the tax liability will be offset by the amount of the tax credit was double benefit to me. I increased take home income or converted future taxable income to tax-free income, and reduced tax liability at the same time.

I plan to use the same tactics to "generate tax liability" for solar battery storage system. Although the solar tax credit is better than EV tax credit in that unused portion can be rolled over to subsequent year tax liability.

 

This video seems pretty applicable to this thread and the current derailment of it that I've been participating in:

Note the parts I've underlined in this transcript down towards the bottom:

 

I am looking at used Chrysler Pacifica Plug-In Hybrid as a poss (like Hill's).
Looks like it still gets $4000 credit on used?

 

I thought used EV has no built-in-North-America restrictions. Prius Prime qualified for the used EV tax credit. The problem is finding an used Prius Prime below $25k on a dealer lot. Private sales do not qualify for the used EV credit.

 

... and the more expensive used plugin PacHy would likely be even tougher to find for under $25k.
EDIT
Apparently not so hard to find after all -when you're looking at rides with 3X the miles we have on ours

.

 

Most buying the EV would have been owing those taxes without buying the car. Those that needed to take steps to increase their tax liability in that year are receiving another benefit in doing so. Like negating future taxes with a traditional to Roth retirement fund conversion, or simply making more money that year.

Well, a lot of EVs no longer qualify for the federal tax credit; the number has dropped since last year. That includes the 'cheap' Model 3, and Bolt production ended. For those that did buy one of those last year, they had to deal with tax liability amounts and waiting until tax filing.

Most of the rest of the eligible ones are priced higher. With the government incentives, the manufacturers will ship mostly top trim models with higher profits, and some dealers will add adjusts to the price with the incentives.

Potential buyers having access to that $15k for a new car is going to put a damper on the amount you'll sell your used one for. Incentives played a part in the high depreciation on EVs in general. Maybe you can get more shipping it out of state, but that has its own hassles.

The dealer has to be registered for them to do the point of sale transfer. Not all are.

If your income happens to exceed the limits at the end of the year, you'll have to pay the credit back.

 

Ah! I knew there was a catch. What would the chances be that the dealer with the $20,000 2023 Chevy Bolt is registered??

As far as limits, I would have one thing to say and one concern: If you thought your family would make less than $300,000 but ended up making more, I don't see a $7,500 loss as being that big of a deal.

What I do wonder is if the lower limit just doesn't matter at all, or if you have to have proof that you "should" be making enough to have a $7,500 tax liability by the end of the year. For an example, maybe you have to have had that kind of liability the year before, but if you don't make it this year you're pardoned.

 

Thousands of dealers are registered. Over seven, and that was back in December. So odds are probably good. Just something to make sure of. This might be the same registration they needed before to sell the cars and buyers get the credits.

I thought your tax liability was a factor, but I'm thinking I had. This is what I found from the IRS; https://www.irs.gov/pub/irs-pdf/p5865.pdf

"At the time of sale, buyers can choose to transfer their clean vehicle credit to a participating dealer. In exchange, they will receive the credit in the form of a downpayment for the purchase or cash equal to the full value of the credit to which the buyers would otherwise be eligible."

How I'm now reading it. You are eligible to amount the car is qualified for. If your tax liability is less than that amount, the liability is reduced to zero, cause that is how all nonrefundable tax credits work. To be eligible, you have to be buying the car for personal use for mostly in the US, in addition to the top income limits.

 

From my understanding, yes. The tax liability of the purchaser no longer matters.
Any dealer not registered probably isn’t aware of the program.
It is a no-brainer as all it does is drive EV buyers to your lot.

 

So, should I go for a $5,000-$6,000 Bolt or not!?

Monday I'll be asking my insurance what it would cost to insure one. The next step would be securing a loan and making sure I have the taxes and fees calcuated, etc. And then, I'll see what air fair would cost and do some EV Charging-fu investigating for the thousands of miles I'll have to come back.

I don't know, this is kind of scary.

 

here's one way to offset the loss of the tax credit:

gm-offers-7500-discount-for-evs-that-lost-tax-credit-eligibility

 

i think i'd pass, prices will continue to come down

 

Good luck! $20k new Bolt smells fishy, but who knows. For that price, it's worth checking. Our state incentives up to $7500 is a point of sale discount. But ours are only available from dealers registered with the state for the program, so it is basically only available to our state residents buying from one of those local in state dealers.

Last I checked in my state, there was not a single base 1LT Bolt EV model available. The lowest advertised price is around $32k for 2LT with some options added. Add tax and fees, even with a $15k discount, the OTD price will be around $19k at best in my case.

 

Ok, so I checked a bit more and that price is inculding the federal $7,500 discount. But if I can get the Colorado discount it's not a bad deal. The only problem is at $12,500, it's still too much for a second car for me. But someone else will surely benefit from it:

This is the car in question:

https://www.bachmanchevrolet.com/inventory/new-2023-chevrolet-bolt-ev-1lt-front-wheel-drive-hatchback-1g1fw6s04p4206345/

I found their site through the Chevrolette official site, so I'm pretty sure it's legit.