$7500 hybrid car credit and child tax credit?

Forum|Forum|7 years ago
June 5, 2019
2 replies
4 views

I'm planning to buy a 2019 pacifica hybrid. I read I need to have a federal tax liability for the year of $7500 to have the hybrid credit offset it. I also have 2 children, married filing jointly. When i estimated the federal tax for the year on my $100,000 of income, it was around $8,500.

If i have a $7,500 credit for buying this van, and a $4,000 child tax credit for my two kids, will I end up getting a $3,000 check from the IRS, or do I need to have a tax liability of $11,500 to "enjoy" both the car and child tax credits?

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Critter

Level 15

With the new rules the max you can receive for the refundable portion of the CTC is $1400 per child or $2800 for 2.

SteamTrain

Level 15

I already have a What-IF 2018 set op for MFJ and two young kids (The CTC does depend on their ages)

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Closer to $8700 tax...assuming it's all W-2 income or ordinary income (no capital gains)

[Edited based on discussion below]

With the vehicle credits being used up first, and ordinary income right at 100,000, the 7500 credit matches your tax, with the refundable part of the child tax credits remains...thus a refund of ~2,800 (along with any other withholding you had done during the year).

This does assume you are using the 24,000 Standard deduction in 2018.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

SweetieJean

Alumni - Champ

Just be aware that your state may not have a Hybrid and/or Child Tax Credit, but will still tax any Roth IRA conversion. But you are still likely to come out ahead in the aggregate,