The Federal electric car tax credit is only available in the year that you put the car in service, and you can’t carry the credit from year-to-year. It will only pay for any Federal tax you owe, so (for example) ,you are only required to pay $3,000 of tax for the year in which you purchased the car, you can only take a $3,000 credit. Any remaining amounts cannot be carried over into future years.
What can you do if you don’t have a federal tax liability, but you still want to be able to take a tax credit? If you have an IRA, it’s possible to create a tax liability by converting a traditional IRA to a Roth IRA, and then take care of that tax liability with the electric car tax credit. The benefit of converting a traditional IRA to a Roth IRA is that your earnings on the Roth will grow tax free, while you’ll be taxed on any gains you make on a traditional IRA.
State credits (if any) may be different.
