Why is Turbo Tax Deluxe 2024 not applying the right income limits for the clean vehicle tax credit? My 2023 AGI is below limit, my 2024 is above. IRS allows the lower.

[matt-n]

I am MFJ, which has a 300k income limit to qualify for the credit. My 2024 AGI is above the limit. My 2023 AGI is below the limit. The IRS allows you to use whichever amount (either/or rule) is below the threshold in order to qualify. TT imported by 2023 amount (below threshold), but tells my my 2024 amount is above the limit and I don't qualify. This is inconsistent with the IRS limits for qualification. It seems to be a software error, but I don't know who I can contact to resolve this without having to pay for their "professional" service. Thanks!

[AnnetteB6]

If you are using the desktop version of TurboTax Deluxe, please be sure that you have installed the latest updates by going to Online > Check for Updates at the top of the screen.

If you have installed all the latest updates and the issue is not corrected, it would be very helpful to have a diagnostic copy of your tax file to see what may be causing the situation you are seeing.  The diagnostic file will not contain personally identifiable information, only numbers related to your tax forms.  

If you would like to provide us with the diagnostic file, follow the instructions below and post the token number along with which version of TurboTax you are using and what states you are filing in a follow-up thread.  

Use these steps if you are using TurboTax Online:

• Sign in to your account and be sure you are in your tax return.
• Select Tax Tools in the menu to the left.
• Select Tools.
• Select Share my file with agent.
• A pop-up message will appear, select OK to send the sanitized diagnostic copy to us.
• Post the token number here. 

If you are using a CD/downloaded version of TurboTax, use these steps:

• Select Online at the top of the screen.
• Select Send Tax File to Agent.
• Click OK.
• Post the token number here.

[matt-n]

AnnetteB6,

I ran the update following instructions.   There was nothing applicable to Federal, but it said it updated logic related to my state.  I haven't started my state filing yet until my federal return is complete, but I did purchase the Federal + State edition of Turbo Tax Deluxe 2024 (download / desktop).   

Anyway, I have uploaded a diagnostic copy as instructed.   The token number is:  91007872-35303330

As I read the rule, the lower of my 2023 or 2024 MAGI can be used to qualify me for the credit.   In other words either 2023 or 2024 amount can qualify me, assuming all other qualifications are met.  Turbo Tax even tells me about the either/or in the section under "We need your Modified Adjusted Gross Income for 2023" as an explanation for why it's asking about a prior year filing.   However, then it goes on to tell me that my 2024 MAGI is above the qualification limit and it won't apply.    It's treating it as NEITHER/NOR instead of Either / Or.

Source:  https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

Who qualifies

You may qualify for a credit up to $7,500 under Internal Revenue Code Section 30D if you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV). The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles purchased from 2023 to 2032.

The credit is available to individuals and their businesses.

To qualify, you must:

• Buy it for your own use, not for resale
• Use it primarily in the U.S.

In addition, your modified adjusted gross income (AGI) may not exceed:

• $300,000 for married couples filing jointly or a surviving spouse
• $225,000 for heads of households
• $150,000 for all other filers

You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your modified AGI is below the threshold in 1 of the 2 years, you can claim the credit.

[matt-n]

It looks like your system redacted part of my token number as it thought it was a phone number.   I'm hoping you can see the token number on your end.   I can type the numbers as text, if needed. 

[AnnetteB6]

Thank you for sharing your token number.  Based on examining your diagnostic tax file, everything is working as it should.  

The reason you are seeing zero as your personal EV tax credit is that you indicated that you transferred the credit to the dealer at the time of the sale.  Therefore, you are not going to see the credit being claimed as part of your personal tax return.  

If you go back through your return and change the answer to the dealer transfer question temporarily, you will see that everything is calculating properly.  Just be sure to change it back if you did indeed transfer the credit to the dealer.  

@matt-nave