@stevedelisle1966 wrote:
Why is Self Employment tax liability not included in this $7500 credit?
Does this mean that anyone that is self employed gets screwed out of this tax credit for buying an EV in early 2023?
Seems bogus to not allow those that are self employed and typically paid by someone without removing money for taxes to not get this benefit.
Congress applied the credit to income tax only.
Remember that self-employment tax is the equivalent of social security and medicare tax. Those taxes are applied to regular W-2 workers and their employers, and are not allowed as the basis for any credits or deductions. Everyone who works, pays into the system. If Amy, who works a regular job and owes $5000 in income tax, can't use the full EV credit even though she also pays $3000 in social security and medicare tax, then why would Betty, who is self-employed and pays $5000 of income tax and $3000 of SE tax, be able to apply the EV credit against the SE tax?
