topic Is the California electric vehicle rebate taxable income? The amount is $2500. in State tax filing

Is the California electric vehicle rebate taxable income? The amount is $2500.

gretair — Wed, 05 Jun 2019 21:53:14 GMT

And where in TurboTax Premier do I add this rebate?

Yes. The California electric vehicle rebates are taxable...

KatrinaB — Wed, 05 Jun 2019 21:53:16 GMT

Yes. The California electric vehicle rebates are taxable on both the federal return and the state of California return.

This is true because of IRC section 61: Gross income means all income from whatever source derived unless specifically excluded by law. A rebate is normally excluded from gross income when it is treated as a reduction in the purchase price of a product or service. However, the California electric vehicle rebate comes from the California Clean Vehicle Rebate Project (CVRP), which is administered by the California Center for Sustainable Energy for the California Air Resources Board. Therefore, the rebate is issued in a transaction wholly separate from the purchase of the vehicle and cannot really be considered a reduction in the purchase price of the vehicle.

For California purposes, California conforms to IRC section 61 and does not provide a specific exclusion for the CVRP rebate, so the rebate is taxable in California too.

This income will be entered on line 21, form 1040 as other income. Then it will be carried over to the state return. Please follow the directions below to enter your rebate income into the TurboTax. (see screenshots for reference)

Click the Federal tab
Click Income & Expenses
Scroll down to Less Common Income and select Miscellaneous Income (drop-down menu)
On the next screen, click start next to Other Reportable Income
On the next screen, select yes.
You are now on the income input screen. Enter the description and amount.

Thank you for replying. In what section of TurboTax do I...

gretair — Wed, 05 Jun 2019 21:53:17 GMT

Thank you for replying. In what section of TurboTax do I apply the electric vehicle rebate?

One moment please.

KatrinaB — Wed, 05 Jun 2019 21:53:19 GMT

One moment please.

You're welcome! I've edited the answer above to include i...

KatrinaB — Wed, 05 Jun 2019 21:53:20 GMT

You're welcome! I've edited the answer above to include instructions.

The rebate is not wholly separate from the purchase thoug...

diemmytr — Wed, 05 Jun 2019 21:53:21 GMT

The rebate is not wholly separate from the purchase though? To receive and keep the rebate you have to purchase the vehicle and then maintain ownership of the vehicle for 30 consecutive months and provide proof of both to the CVRP. Since the rebate from CVRP places strict eligibility requirements to even receive, it is tied directly to the purchase of the vehicle. Why isn't that the case?

What about Rev_Rul_76-96, which says automobile rebate is...

Bethel0 — Wed, 05 Jun 2019 21:53:23 GMT

What about Rev_Rul_76-96, which says automobile rebate is not gross income? <a rel="nofollow" target="_blank" href="https://www.bradfordtaxinstitute.com/Endnotes/Rev_Rul_76-96.pdf">https://www.bradfordtaxinstitute.com/Endnotes/Rev_Rul_76-96.pdf</a>

Can we please get some clarification on Rul 76-96 from ab...

mrpetershu — Wed, 05 Jun 2019 21:53:24 GMT

Can we please get some clarification on Rul 76-96 from above?

But someone also replied this 2 months ago: “*This is no...

rho94066 — Wed, 05 Jun 2019 21:53:26 GMT

But someone also replied this 2 months ago:

“*This is not a credit included on your California state tax refund, so you will not enter into TurboTax.

California actually classifies this as a rebate program, which is separate from your income tax return.”

So is this taxable income?

I have the same question do we need to enter it on the in...

turbomaster6 — Wed, 05 Jun 2019 21:53:27 GMT

I have the same question do we need to enter it on the income tax preparation in TT software ? some please confirm either way

Re: Yes. The California electric vehicle rebates are taxable...

irwinr — Tue, 04 Feb 2020 22:28:20 GMT

"the rebate is issued in a transaction wholly separate from the purchase of the vehicle and cannot really be considered a reduction in the purchase price of the vehicle."

I don't understand how they can be "wholly separate" if receiving the rebate is predicated on the requirement that you purchase and own the vehicle?

Re: Is the California electric vehicle rebate taxable income? The amount is $2500.

Hanfresco — Sat, 08 Feb 2020 13:31:46 GMT

According to CVRP Implementation Manual linked here, CVPR is NOT taxable.

The relevant section is on page 11 (pg 14 of the PDF) and reproduced below:

The CVRP rebate is not taxable income and the Administrator does not issue a 1099 for your rebate. The Administrator cannot offer tax advice of any kind. If you have tax related questions, please consult with your individual tax advisor.

Re: Is the California electric vehicle rebate taxable income? The amount is $2500.

KrisD15 — Sun, 09 Feb 2020 20:12:10 GMT

Rebates are not normally taxed, they reduce the purchase price, therefore reducing your cost and/or basis;

HOWEVER-

If you took any type of credit for the purchase of the electric vehicle, that might need to be addressed and the rebate would be classified as a recovery.

Please use the link below for more information.

IRS Pub 525

Re: Is the California electric vehicle rebate taxable income? The amount is $2500.

melamat — Thu, 30 Jul 2020 19:18:14 GMT

This question relates to my future 2020 tax return. I received a $1500 rebate the year in Feb 2020 for a Nov. 2019 purchase of a plug-in, hybrid electric vehicle. When I phoned the California CVRP office (Clean Vehicle Rebate Program) I was informed that this rebate is not taxable as income in California and that they do not issue 1099's to the California FTB (Franchise Tax Board) or the Federal IRS. The lack of a 1099 income reporting form tells me that this rebate check does not have to be reported as income on my State or Federal tax return. I have been using Turbotax for my personal tax returns for over 20 years. Can some at Intuit please answer this question about the Federal taxability of this state rebate check? I look forward to feedback from Intuit. Thank you. Carmelo Amato