@Artlive87 wrote:
Ok, let me show you this example.
YTD is $79k
Federal Income Tax
$4,500
California State Income Tax
$1,900
California State Disability Insurance
$800
How, in this case, the EV tax credit will be calculated?
The federal withholding is only part of the question. You need to know the federal tax liability. That's the amount of tax you owe to the government, regardless of withholding.
For example, if you had $4500 withheld and you expect a refund of $500, your liability was $4,000. Or, if you had $4,500 withheld and you expect to owe an additional $500, then your liability was $5000.
The EV credit is up to the amount of your federal liability. The rest is carried forward. For example, if you had $4500 withheld and you originally expected a refund of $500 because your liability was $4,000, adding the EV credit would apply $4000 this year, and you would get a refund of $4500--all your withholding, since your liability is now zero.
State and other taxes and fees don't enter the equation at all.
