Hi vvkp8993, thanks for joining the tax forum today.
If you purchase an eligible EV during 2023, when you file your tax year 2023 Federal income tax during 2024,
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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 two years, you can claim the credit.
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Credits for New Clean Vehicles Purchased in 2023 or After
https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after
The credit is to offset tax liability, for example, tax year 2022 form 1040, line 22 to zero. Unused portion is lost and cannot be carryforwards.
Your payroll withholding is considered tax payments, which has no bearing if the EV credit can be used to offset the tax liability as described above.
As a very simple example, if your tax liability is zero, you receive all withholdings back as refund (if no other tax complications.)
Hope this helps,
Kochu Kitty
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