Thank you for taking the time to reply @DianeW777 , as well as providing the links. I have a couple of follow up questions, but first some additional information. So I believe the EV purchase was reported to the IRS, as we filed Form 8936 (Clean Vehicle Credits) with our Federal Return. However, in the rebate application from Xcel, they explicitly said:
XCEL ENERGY CUSTOMERS RECEIVING AN EV REBATE ACKNOWLEDGE
AND AGREE THAT THE EV REBATE IS BEING PROVIDED IN LIEU OF
ANY STATE OF COLORADO TAX CREDIT APPLICABLE TO CUSTOMER’S
PURCHASE OF AN EV. BY ACCEPTING THE EV REBATE YOU SHALL
NOT CLAIM AND AGREE TO FORFEIT YOUR RIGHT TO ANY SUCH TAX
REBATE FROM THE STATE OF COLORADO.
Based on that, in our Colorado return, we did NOT claim the Innovative Motor Vehicle Credit. I will also note that later in the application it said:
The applicant is responsible for all tax liability imposed as a result of the EV Rebate, if any. Xcel Energy is not responsible for any taxes imposed on the applicant as a result of the EV Rebate, if any.
So my follow up questions are in regards to the 1099-Misc we received.
1) Based on the above, it seems like they provide the 1099 as information and you determine if it is taxable (for instance, if the vehicle was used in a business). Since the vehicle is only used for personal use in our case, and it seems to meet the definition of a cash rebate in the info you provided, we are leaning toward it does NOT need to be counted as income. Does that make sense?
2) If you agree, then my question is if we should actually remove the 1099-MISC (using the instructions you provided). Is it actually allowed to not report a 1099-MISC? We saw some other posts that we should enter the 1099-MISC, but then later on the Schedule 1 / Other Income Statement (where the 5500 rebate is showing up on line z2b), add an entry on line z12 with a -5500 to offset the rebate to 0. Do you have an opinion of which way is more appropriate to report this?
