Deductions & credits

Form 8936, Clean Vehicle Credits, is actually ready.

I would recommend going back and reviewing your input to ensure you do not have any stray characters or errors on your input for the VIN.  This number must match exactly or the credit will not be allowed. 

To do this, log back into TurboTax and under the Federal Taxes tab, select Deductions & Credits.

1. Scroll down to the section titled Cars and Other Things you Own and be sure to select update/start to the right of the section titled Energy-Efficient Vehicles.
2. Be sure to answer each question carefully as you proceed through the screens.  How you answer these questions will affect whether you are eligible to take the credit or not.
3. On the screen titled "Tell us more about your plug-in electric drive motor vehicle", review the entry in the box to the right of Vehicle Identification Number (VIN).
4. If you do not see an issue and are still getting an error message, you can also delete the entire input and try to re-enter the VIN.  Be sure to complete the questions for the make of car, model, and date the clean vehicle was placed in service.

Please see the U.S. Department of Energy page for federal tax credits to confirm the eligibility of your vehicle for the tax credit as well as the IRS website.  Both sites do indicate that the Tesla Model Y are eligible for the tax credit if purchased in 2023 as long as you fall within the qualified parameters as outlined on the IRS Qualified vehicle section.

If you are still having issues, you may need to update your program as well.  Please see this link for steps on how to update your program.