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Level 1

Question

EV Tax Credit with a co-signer

Forum|Forum|6 years ago
February 9, 2020
45 replies
297 views

I purchased and took delivery of a Tesla Model 3 in June 2019. My dad is a co-signer on the loan for the car and also was present when we took delivery/signed all the necessary purchase agreements forms with me as well. His and my name appears on the car registration. His income qualifies for the full $3750 EV federal tax credit, but my income isn’t high enough to get the full credit (I would only get ~$1800 of that $3750).

Since he is a co-signer/co-owner of the car, can we use the federal tax credit on his taxes in order to use the full $3750 credit? Also, we live in CO so we are eligible to get an additional $5000 for the state. Thus, should we just have him fill out the EV credit for his federal and state taxes?

Thanks so much for your help!

Not A Product Question

JotikaT2

Alumni - Expert

Yes, since you are both on the title, either one of you can take the credit.

Please note Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit, has not yet been released within TurboTax. You will probably see a message within the TurboTax program.

The form is currently scheduled to be released on February 12, 2020. Please see the attached link for updates.

Forms release dates

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Big Dog123

Level 2

Ok here is a scenario...I bought a tesla this month and took advantage of the credit already on my name. I know I cannot qualify for another tax ev for 3 years...my domestic partner now wants her own eve but does not have enough credit history to get a good loan rate...can I co sign with her so that she can get the loan withough affecting the tax credit on her end? Will she still qualify to get her own even though I have already purchased an EV?

BrittanyS

Level 12

Yes, as long as her name is listed on the vehicle as an owner, she can qualify for the credit if she meets the other requirements. As long as she has never taken the credit on her return, she will still qualify for the credit.

The qualifications have been updated for 2023 as follows:

bought for her own use
Use it primarily in the US
Her Modified Adjusted Gross Income may not exceed
- 300,000 for Married Filing Joint
- $225,000 for Head of Household
- $150,000 for other filers

The purchase of a new vehicle must also follow these qualifications:

Buy the vehicle new
Have a battery capacity of at least 7 kilowatt hours
Have a gross vehicle weight rating of less than 14,000 pounds
Be made by a qualified Manufacturer
Final Assembly must be done in the United States

For more information on the Clean Vehicles Credit, see the link below:

New Clean Vehicles

@Big Dog123

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amitmparikh

Level 2

Is this still the case for 2023

DoninGA

Level 15

@amitmparikh wrote:

Is this still the case for 2023

For more than one person on the title for the vehicle? Yes.

Taxpayer02

Level 2

What if one of the co owners income is over 150k can the other person still claim the credit?
does it matter who paid for it ?

ShirlynW

Level 8

Yes. To claim a deduction or credit, you must have legal ownership and a responsibility to pay. The primary borrower is the person legally responsible repaying the obligation. Co-signers agree to work with the primary to repay the loan.

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brownie20

Level 2

Thank you so much for all the expert replies! 🙂

Similar situation but a little different with potential co-owners in two states. I make too much to qualify for the $7500 credit and I live in state X. A family member resides nearby in state Y and should be under the AGI requirement this year. State X has an EV rebate, state Y does not. I had just about given up on the $7500 credit but then had the craziest idea; if the 2 of us are co-owners on the car and register the car in State X, I should be able to apply for the state rebate while my family member claims the car for the credit?! Adding to the headache is the fact that said family member is out of the country for the next few months so would likely need to be flown back to take delivery of the car (preferably by the end of February?) . Was hoping to double check that this would work before going through the extra expense and hassle of flying family member back lol. Thank you in advance for any thoughts/input.

MaryK4

Level 15

Just to clarify, which two states are involved? The answers above are for the federal credit, but since each state has their own rules I would want to look that up to be sure.

@brownie20

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brownie20

Level 2

Thank you MaryK4 so much for your reply, I really appreciate it! I'm in MA and my family member is in NH. Thank you again! 🙂

AmeliesUncle

Level 15

In my opinion, the answers above are likely wrong.

Two of the requirements is that the vehicle " is acquired for use or lease by the taxpayer and not for resale" and that it is "placed in service by the taxpayer".

If the person is not using the vehicle, it doesn't seem to meet either of those requirements.

brownie20

Level 2

@AmeliesUncle

Sorry was this directed at me? I'm planning on buying a Tesla for my personal use, not for resale. I think the idea of having co-owners on a vehicle is that the car is owned and used by both parties; the car will be "placed in service by the taxpayer." I already own (and primarily drive) a Tesla so this 2nd Tesla will be usable by all family members. And since we donated the co-owner's car when I purchased my Tesla this will be their "primary" vehicle.

AmeliesUncle

Level 15

@brownie20 wrote:

Sorry was this directed at me?

Sorry, no. It was directed at anybody that was relying on the previous answers that said that just because a person co-signed the loan (and is therefore on the title) gets to pick who claims the credit regardless if the other person uses the vehicle or not.

If the vehicle is used by both parties, yes, that is fine and either person can claim the credit. But many of the prior situations seem to indicate that the co-signer was only signing the loan and would have no actual use of the vehicle.

shujan84

Level 2

I have a similar situation and looking for an expert advice.
Primary applicant lives in NJ and I(co-signer) lives in MD. After reading this thread, seems like anyone can claim the federal tax credit. Can the primary applicant claim NJ EV incentives? The car will be registered in NJ.

MichaelG81

Level 7

Yes, the primary applicant will have to meet the requirements for the state credit (usually residency requirements and income at the very least), and as long as one of you are titled on the EV then either one, not both can take the credit. And if the owner lives in NJ they may qualify for their credit too, if filing state taxes and meeting the states criteria. After some research, it seems you must purchase the car from a NJ dealership, and go through the dealership for the credit which is applied to the sales price of car at time of sale. Click here for more info.

@shujan84

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user194537

Level 2

Hi there, my girlfriend and I are considering getting a new Tesla. I’m above the income cap, she’s under. We live together in CA and would both use the car. She has no credit history so I would be the main applicant on the loan and we’d be co-signers on the car title.

Can she claim the federal tax deduction?