I got the advice you are offering from a person at Turbotax last week (after Turbotax said I had ZERO credit). But after reflecting on the issue, it made little sense to me, and I spent an hour yesterday talking with a tax advisor at Turbotax, and she agreed with me.
Here is the issue: the $7500 is a credit on this year's taxes: whether it is given to the dealer at the time of sale or taken as a reduced payment at the time of taxes, it comes from the same credit. I could have elected to wait until filing to recoup the money for the credit when filing taxes (perhaps using the savings as a car payment), but the money would have been the same credit used by the dealer to reduce my cost at the time of purchase. All the IRS did was to advance that payment to the dealer rather than me wait to receive it now.
If I could not deduct the credit on taxes, the $7500 from the dealer would turn into either a loan (which IRS now requires repaid) or it was an outright gift from the government – neither of which is the case.. Since it was a credit on 2024 taxes, the only difference between having it advanced through the dealer or claiming it now is temporal. I won't get any more money now, because the money comes from the same source: the credit on my 2024 taxes.
After working with the tax advisor on the phone, she brought in someone from a higher level to review it with us, and she agreed, instructing me to fix it by saying that I should answer the question about the dealer paying the $7500 at point-of-sale with "NO." The problem is really a glitch in how Turbotax has set up the forms in EasyStep. I emphasized that someone needs to change the programming, inasmuch as, if I submit the forms digitally, reporting that I did not receive the payment at time of sale is going to create a conflict when the form is read at IRS, because they have the report from my dealer. An alternative is to print off the forms, change the mark on that question, and submit the forms by mail. But it really should be resolved by Turbotax.
