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No longer eligible for Clean Vehicle Tax Credit, what do I do now?
Long story short:
- Due to an employment gap last year, I thought my MAGI was below the threshold for the used clean vehicle credit.
- Unfortunately, I did a Traditional IRA to Roth IRA conversion in 2024, which if I understand correctly, makes my AGI/MAGI higher for that FY, pushing me out of qualifying for the credit. (Is this correct? the traditional IRA came from my old employer's 401K match; all my own contributions were Roth 401K).
- I got the credit at the dealership and it applied to the purchase price of my vehicle.
- I purchased the vehicle in 2025 (this year). I'm pretty certain my AGI/MAGI this year won't be low enough to qualify. I'll be tens of thousands higher than the threshold.
- I'm now wondering what to do. I'm using TurboTax Desktop, and want to get this reconciled. How would I pay the IRS back? What forms would I need to fill out?
Topics:
‎February 27, 2025
9:43 AM