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So, (Keeping it simple)
Lets say for example someone earns $80,000 and the employer withholds $11k in Federal Taxes - but after doing the taxes the total taxes owed are only $9k - so this person gets a $2000 refund check.

If this person buys a Volt, and claims the Tax Credit -- Do they get still get $2000 or do they get $2000 + $7500 i.e. $9500 or do they just get $7500?

Confused.

Thanks.
 

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A follow up question using the same scenario:

Owes 9k in 2013, but buys two ev's in 2013. I don't believe you can roll the credit into the next year, but if you owe from the previous year, can you offset?
 

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No. The EV tax credit must be taken in on the tax return for the year the EV was purchased. If you do not have enough tax liability for the credit (in this case $15000), you can only take the credit up to the total of your tax liability and you lose the rest. There are no carryovers.
 

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So, (Keeping it simple)
Lets say for example someone earns $80,000 and the employer withholds $11k in Federal Taxes - but after doing the taxes the total taxes owed are only $9k - so this person gets a $2000 refund check.

If this person buys a Volt, and claims the Tax Credit -- Do they get still get $2000 or do they get $2000 + $7500 i.e. $9500 or do they just get $7500?

Confused.

Thanks.
$9500 I believe. Its outside the AMT.
 

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So, (Keeping it simple)
Lets say for example someone earns $80,000 and the employer withholds $11k in Federal Taxes - but after doing the taxes the total taxes owed are only $9k - so this person gets a $2000 refund check.

If this person buys a Volt, and claims the Tax Credit -- Do they get still get $2000 or do they get $2000 + $7500 i.e. $9500 or do they just get $7500?

Confused.

Thanks.
And if you do a little work you can have less taken out of your paycheck by upping your exemption withholding for federal so that you get it now in your paycheck so that by YE you maybe only get a little back which is what I do for my solar write off as well as my soon to be Volt purchase. Follow the instructions on the federal exemption change form. That is if you don't want to wait to get the $9500 back YE in one lump.
 

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And does the above apply for both financing and leasing?
 

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You get the credit when you buy, the lease company gets the credit when you lease, but they should reflect that credit in the deal they make with you. That is why the lease deals are so favorable on these cars.
 

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So basically the more money you make the less your Volt costs. Up to $7500.00 less. Anyone else think that's a bit backward?
 

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So basically the more money you make the less your Volt costs. Up to $7500.00 less. Anyone else think that's a bit backward?
No...because tax codes are written by and for rich people...:rolleyes:
 

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It has nothing to do with how much was withheld. If your total tax obligation for the year is > $7500, you get the full credit.
If their tax liability was $9K before the credit and they only had $1500 withheld, with the $7500 they would neither owe anything nor receive any refund. But they would have had the use of the $7500 this year.
 

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As long as you owe Uncle Sam $7500 in the year purchased, you get it all. Period.

You will get $9500.
 

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it can help to do a little planning, too...

take my situation, for example...i have an inherited IRA that i'm stretching over my lifetime (or what the IRS thinks will be my lifetime, anyway). i have a set amount that i must withdraw from it every year, based on a formula in the tax code...and that amount changes every year, based on what the dollar value of the account is at the end of each year - and that money counts as ordinary income. if you don't take the minimum amount you're required, the tax penalty is 50% of the amount you don't take (no, that's not a typo, FIFTY percent). so, if my required distribution is $1000 and i don't take anything, my tax penalty is $500.

so, what i've been trying to do is plan how much to take this year to limit my tax liability for the next few years - since i'll have the $7500 credit this year (plus a solar credit for my new home), plus taking a little more from the retirement account this year and balancing that against how much it will cost me in taxes this year vs what i'll gain by having a smaller RMD next year and possibly the next few years over that, depending on how the investments in the account go...

the fact that they made it a credit rather than a rebate at purchase is a PITA since you have to wait to get the money back, but it gives a lot of people more options and some things to think about.
 
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