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Discussion Starter #1
Haven't found any myself... but just confirming. Are there any income limits to who can get the federal $7500 tax credit?
 

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Not as far as I know with regards to earned income. The only limitation is that it comes off of tax owed assuming you owe more than $7500. If you own less than $7500, it will only take you to 0. If you do not owe money and are getting a refund, you do not get any benefit from the tax credit.
 

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Not as far as I know with regards to earned income. The only limitation is that it comes off of tax owed assuming you owe more than $7500. If you own less than $7500, it will only take you to 0. If you do not owe money and are getting a refund, you do not get any benefit from the tax credit.
Whether or not you get a refund has NOTHING to do with qualifying for the credit. What ever your tax liability is, is reduced by $7500, but it will not let your liability go below zero. If your liability is $7500, it will reduce it to $0, and what ever you had withheld through the year will be refunded. If your liability is $1000, you still reduce it to $0 and get all of your withholding back.
 

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Not as far as I know with regards to earned income. The only limitation is that it comes off of tax owed assuming you owe more than $7500. If you own less than $7500, it will only take you to 0. If you do not owe money and are getting a refund, you do not get any benefit from the tax credit.
Wrong. The year I bought my volt, my $2500 refund became a $10k refund. Look on the 1040 line that shows the total tax you owe, ignoring any withholdings from the bottom half of the 2nd page. If the total tax you owe is greater than $7500 you get it all. If the taxes you owe is smaller, you get that amount back. There is no maximum earnings that would disqualify you from getting the tax credit, only minimum earnings below say $60k that may limit your tax credit.
 

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Colorado recently dropped the PHEV/EV tax credit to $5000 from $6000 (News Article), but it's much simpler to get, even if you don't have a matching tax liability, and it's still apparently the highest in the nation.

I just scored a '17 Volt from Keys Chevy, will have a total of $12,500 of Gummit Rebates, and now only have to figure how best to get it from there to me (850 miles)!
 

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Look at your tax return from last year. If this years situation is similar you can at least get an estimate for 2017. On the basic form 1040 look at line 47. This is your tax. If it's over $7,500 you get the full $7,500 credit. If it's under $7,500 you only get the amount on line 47 as a credit. So as an example if line 47 is "$5,234" then your credit will be "$5,234" making your federal tax liability $0. If line 47 is "9,234" then subtracting the full $7,500 credit leaves you with a liability of $1734. Subtract your liability from your withheld amount to calculate your refund check.
 

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Wrong. The year I bought my volt, my $2500 refund became a $10k refund. Look on the 1040 line that shows the total tax you owe, ignoring any withholdings from the bottom half of the 2nd page. If the total tax you owe is greater than $7500 you get it all. If the taxes you owe is smaller, you get that amount back. There is no maximum earnings that would disqualify you from getting the tax credit, only minimum earnings below say $60k that may limit your tax credit.
Yes, this is correct


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How about the AMT?
 

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How about the AMT?
I'm not certain, but I think the year I took the $7500 credit, the AMT kicked in and increased my tax liability by around $250 (which would not have happened if it weren't for the EV credit). So I think AMT can reduce the credit. Don't take my word for it, though - there are plenty of online resources about this, beginning with the IRS.
 

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Not as far as I know with regards to earned income. The only limitation is that it comes off of tax owed assuming you owe more than $7500. If you owe less than $7500, it will only take you to 0. If you do not owe money and are getting a refund, you do not get any benefit from the tax credit.
tff, I don't know if reading comprehension is the issue with all of these slightly-varying answers to your question or not, but dannycamps' answer was the most succinct. The only possible thing left would have been to give another example, such as this: if the amount of tax you owe ends up at $4150 (before applying the credit), then that's all the credit will give you, and you'll still end up owing nothing (the remaining $3350 of the potential amount of the credit will go unused).

As to the person who claimed that they ended up with a larger refund ($10,000 instead of $2500) because of this credit, just...no. At least, not because of any credit. We're talking about a credit here, not a deduction or a refund. The purpose of a credit is solely to reduce your tax liability. Something else (and unrelated) would have had to be responsible for that if, in fact, it actually occurred.

An additional credit that some overlook: there is another credit that will refund 30% of the first $750 or $1000 (sorry, I can't remember which) cost of an EVSE installation. But again, since this is a tax credit just like the other $7500 credit for the car, it can only reduce any amount of tax that you may owe.

Personally, I was lucky(?) enough to be able to take full advantage of both of these credits. I hope you can, too.
 

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How about the AMT?
Not subject to the AMT. That's simple. However, our tax code is not simple. If you have other credits which are subject to the AMT, and the EV credit drops your tax, this lower tax owed might trigger the AMT and reduce the value of these credits. Likely not a common situation but it's possible.

As to the person who claimed that they ended up with a larger refund ($10,000 instead of $2500) because of this credit, just...no. At least, not because of any credit. We're talking about a credit here, not a deduction or a refund. The purpose of a credit is solely to reduce your tax liability. Something else (and unrelated) would have had to be responsible for that if, in fact, it actually occurred.
I think you're a little confused on this point. A credit can surely result in a larger refund. If you paid $50K in taxes during the year, and you only needed to pay $48K, you'd get $2K back. The $2000 would be your refund. If you now get a credit for $7500, your tax liability would go down by $7500 and your refund would go up from $2000 to $9500. Refunds are just returns when you've paid too much. He's not saying he got a refund for more than he paid in taxes. He's just saying the credit reduced his tax liability and increased his refund.
 

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As to the person who claimed that they ended up with a larger refund ($10,000 instead of $2500) because of this credit, just...no. At least, not because of any credit. We're talking about a credit here, not a deduction or a refund. The purpose of a credit is solely to reduce your tax liability. Something else (and unrelated) would have had to be responsible for that if, in fact, it actually occurred.
Lets suppose that your tax liability (line 47) comes down to you owing $7500. No EV credit involved. And your W2 says that your employer withheld $10,000. Your refund would be $2500. Right?
Now lets add in the EV purchase. Now you get to fill in, on a separate line, that you have a $7500 credit. That reduces your liability on line 47 to $0. Because your employer withheld $10k from your paycheck, your refund will be $10,000, JUST BECAUSE YOU PURCHASED AND EV.
 

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Not subject to the AMT. That's simple. However, our tax code is not simple. If you have other credits which are subject to the AMT, and the EV credit drops your tax, this lower tax owed might trigger the AMT and reduce the value of these credits. Likely not a common situation but it's possible.
There are a few members here that reported that the EVSE credit was not allowed due to AMT. The $7500 EV credit reduced their liability enough for the AMT to come into play and the EVSE credit IS/WAS an AMT credit. But I think the EVSE credit expired at the end of 2016.
 

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From my 2016 income return, Line 63 on Form 1040 is "your total tax." To get that figure, you have to subtract the $7,500 (i.e. the Federal credit for buying a qualifying EV) from taxes otherwise determined. The EV credit itself appears on Line 4 of Form 8936 which then appears on Line 54 of Form 1040 and is used to get to Line 63, "your total tax."

In other words, "Your total tax" which includes the EV credit HAS NOTHING WHATSOEVER to do with whether you have already paid in to your taxes by income withholding shown on paystubs, the amount which appears on Lin 64 and is included on Line 74 of Form 1040, "total payments."

If by including the full $7,500 EV credit you get a negative number on Line 63 (your total tax), then and only then do you not get to use the full credit ... you get only the amount that reduces Line 63 to zero and no more.
 

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Discussion Starter #15
Thanks for the info. I think it's clear.
My initial question was regarding whether at a certain income level, whether the credit would phase out. Seems like the answer is no. (Even Donald Trump would get the credit, ironically.)
Of course, if your total federal taxes in the year are less than 7500 then you would not get the total credit.
 

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Lets suppose that your tax liability (line 47) comes down to you owing $7500. No EV credit involved. And your W2 says that your employer withheld $10,000. Your refund would be $2500. Right?
Now lets add in the EV purchase. Now you get to fill in, on a separate line, that you have a $7500 credit. That reduces your liability on line 47 to $0. Because your employer withheld $10k from your paycheck, your refund will be $10,000, JUST BECAUSE YOU PURCHASED AND EV.
EXACTLY!!!
 

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Thanks for the info. I think it's clear.
My initial question was regarding whether at a certain income level, whether the credit would phase out. Seems like the answer is no. (Even Donald Trump would get the credit, ironically.)
Of course, if your total federal taxes in the year are less than 7500 then you would not get the total credit.
Correct. In fact Trump could get several credits,....wait, does he even owe any taxes?
Personally, I only got back $7300. Damn, I left $200 on the table. I needed a better paying job. But I'm OK with it.
 

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Haven't found any myself... but just confirming. Are there any income limits to who can get the federal $7500 tax credit?
If you have lots of taxes due you could buy TWO OR MORE and get your $7500 per car...:)
 

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If you have lots of taxes due you could buy TWO OR MORE and get your $7500 per car...:)
You can only claim the $7,500 federal tax credit once in a given tax year. You could buy one EV in Nov/Dec 2017 and a second in Jan 2018.
 

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You can only claim the $7,500 federal tax credit once in a given tax year. You could buy one EV in Nov/Dec 2017 and a second in Jan 2018.
No. You can claim as many as you want. One per car purchased, and ONLY if you have enough liability for each one. $7500 for 1 car, $15,000 for 2 cars, and so on.
 
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