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@pr8993 wrote:

I am single
My last year AGI was  < 150k
My current year AGI might exceed 150k (as I might receive pay raise) , so if I purchase eligible car in July 2023 will i be eligible for federal and state tax credit in 2024 return? 

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For the new clean vehicle tax credit (purchases after December 31, 2022), your modified adjusted gross income (AGI) may not exceed:

• $300,000 for married couples filing jointly 
• $225,000 for heads of households
• $150,000 for all other filers (including single 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 two years, you can claim the credit.

Modified AGI, or MAGI, is calculated by adding certain deductions taken back to your AGI, potentially including:

• Student loan interest
• One-half of self-employment tax
• Qualified tuition expenses
• Tuition and fees deduction
• Passive loss or passive income
• IRA contributions
• Non-taxable social security payments
• The exclusion for income from U.S. savings bonds
• Foreign earned income exclusion
• Foreign housing exclusion or deduction
• The exclusion under 137 for adoption expenses
• Rental losses
• Any overall loss from a publicly traded partnership

Assuming your MAGI is similar to your AGI, you would still qualify for the credit based on your prior year income, even if you receive the raise this year taking you above the income limit.

1) every pay cheque my employer deduct standard federal and state tax and at the end of year I generally get tax refund upon tax filling, so my question is: if i have more than 7500$ federal tax (regardless what i paid/owe) i will be getting whatever refund + 7500 right?
for ex 17000 total Federal tax, 20000 i already paid through out year, am about to get 3k refund + 7500 ev credit?

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Your example here is correct. The New Clean Vehicle Credit reduces any tax liability. So with your example, if you have a $17,000 tax liability and $20,000 withheld throughout the year, the result would be:

$17,000 tax liability - $7,500 tax credit = $9,500 remaining tax liability

$20,000 withholding - $9,500 = $10,500 refund

Important to note - this credit is not refundable, nor can it be carried forward to future years. If you do not have a tax liability, no credit is available. Also, if you have less than $7,500 in tax liability, the credit will only be equal to the amount of the tax liability.