I can help with that, having already claimed it two years ago when I bought my Chevy Bolt.Hi all - looking for previous USA EV buyers for this one, with 2 questions.
1. Makers love to include the EV Tax Credit amount in the "price" of the car. For instance, Tesla (sketchily) displays a default price that subtracts fuel savings already, and all media/review outlets proclaim "after credit it's only $xx,xxx!" When doing your math for payment amount, total cost, etc., are you including the Tax Credit somewhere, or just taking it as a nice win come tax time?
2. Claiming said Tax Credit. I understand that it is NOT a rebate, and will not generate a +$7,500 line item on your return. As someone who normally gets a refund, how do I ensure I have the proper liability to maximize the credit? Do you need to adjust your withholding to create a >$7,500 deficit? Or am I totally off on this?
Thanks in advance. There is plenty of info on WHAT the Tax Credit is, but not as much on HOW to claim it.
In a nutshell, the $7500 tax credit is NONrefundable, which means it gets applied to taxes you owe only. So if you owe, say, $6000 in taxes the year you buy your EV, you only get a $6000 credit, not the full $7500.
You claim the tax credit by filling out a special IRS form, 8936, when you do your taxes for the year you bought the car-- i.e. if you bought it this year, 2022, you would claim the tax credit when you do your 2022 taxes NEXT year around this time-- so you have to wait up to a year for the money.
The best way to determine whether you likely have enough taxes owed to claim the full credit is to look at your most recent tax return-- "taxes owed" is a line item on the first page. If you owed $7500 in taxes last year, you probably will this year too.
But the caveat is that this is not guaranteed. Any significant change to your financial situation, such as loss of a job/income, getting married, or other things that would affect your tax status, could change potentially lower your tax liability and prevent you from getting the full credit when it comes time to file.
Which is why it would be much better if the credit was refundable (so you'd get it no matter how much you owe), or better yet, applied to the purchase price of the car.
But it is what it is. Better than nothing, right?