topic EV Tax Credit with a co-signer in Deductions & credits

EV Tax Credit with a co-signer

LemmeSmackU — Sun, 09 Feb 2020 02:06:11 GMT

I purchased and took delivery of a Tesla Model 3 in June 2019. My dad is a co-signer on the loan for the car and also was present when we took delivery/signed all the necessary purchase agreements forms with me as well. His and my name appears on the car registration. His income qualifies for the full $3750 EV federal tax credit, but my income isn’t high enough to get the full credit (I would only get ~$1800 of that $3750).

Since he is a co-signer/co-owner of the car, can we use the federal tax credit on his taxes in order to use the full $3750 credit? Also, we live in CO so we are eligible to get an additional $5000 for the state. Thus, should we just have him fill out the EV credit for his federal and state taxes?

Thanks so much for your help!

Re: EV Tax Credit with a co-signer

JotikaT2 — Sun, 09 Feb 2020 02:24:34 GMT

Yes, since you are both on the title, either one of you can take the credit.

Please note Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit, has not yet been released within TurboTax. You will probably see a message within the TurboTax program.

The form is currently scheduled to be released on February 12, 2020. Please see the attached link for updates.

Forms release dates

Re: EV Tax Credit with a co-signer

amitmparikh — Mon, 16 Jan 2023 22:09:33 GMT

Is this still the case for 2023

Re: EV Tax Credit with a co-signer

DoninGA — Mon, 16 Jan 2023 22:16:35 GMT

@amitmparikh wrote:

Is this still the case for 2023

For more than one person on the title for the vehicle? Yes.

Re: EV Tax Credit with a co-signer

Taxpayer02 — Thu, 19 Jan 2023 02:10:38 GMT

What if one of the co owners income is over 150k can the other person still claim the credit?
does it matter who paid for it ?

Re: EV Tax Credit with a co-signer

RobertB4444 — Fri, 20 Jan 2023 16:09:31 GMT

As long as both names are on the title it does not matter who claims the credit. As long as it's only claimed once.

@Taxpayer02

Re: EV Tax Credit with a co-signer

minmartar — Fri, 20 Jan 2023 19:23:31 GMT

Hi I am planning to co-sign for an EV for my sister.

Her income will qualify but mine will not.

Will that be a problem when she requests for the EV tax credit for 2023?

Re: EV Tax Credit with a co-signer

MichaelG81 — Fri, 20 Jan 2023 19:58:25 GMT

Make sure she is an owner on the title. It can only be claimed once as previously stated by an expert, she can claim if she is on title.

@minmartar

Re: EV Tax Credit with a co-signer

MR128 — Wed, 25 Jan 2023 05:34:42 GMT

To confirm, if the car is jointly purchased by two unmarried people, and one person exceeds the income eligibility, the other joint owner can claim the tax credit? The income of the ineligible joint owner does not render the purchase ineligible for the tax credit?

Re: EV Tax Credit with a co-signer

ShirlynW — Wed, 25 Jan 2023 17:17:26 GMT

Yes. To claim a deduction or credit, you must have legal ownership and a responsibility to pay. The primary borrower is the person legally responsible repaying the obligation. Co-signers agree to work with the primary to repay the loan.

Re: EV Tax Credit with a co-signer

brownie20 — Fri, 27 Jan 2023 07:50:30 GMT

Thank you so much for all the expert replies! 🙂

Similar situation but a little different with potential co-owners in two states. I make too much to qualify for the $7500 credit and I live in state X. A family member resides nearby in state Y and should be under the AGI requirement this year. State X has an EV rebate, state Y does not. I had just about given up on the $7500 credit but then had the craziest idea; if the 2 of us are co-owners on the car and register the car in State X, I should be able to apply for the state rebate while my family member claims the car for the credit?! Adding to the headache is the fact that said family member is out of the country for the next few months so would likely need to be flown back to take delivery of the car (preferably by the end of February?) . Was hoping to double check that this would work before going through the extra expense and hassle of flying family member back lol. Thank you in advance for any thoughts/input.

Re: EV Tax Credit with a co-signer

MaryK4 — Fri, 27 Jan 2023 15:48:56 GMT

Just to clarify, which two states are involved? The answers above are for the federal credit, but since each state has their own rules I would want to look that up to be sure.

@brownie20

Re: EV Tax Credit with a co-signer

brownie20 — Fri, 27 Jan 2023 20:29:35 GMT

Thank you MaryK4 so much for your reply, I really appreciate it! I'm in MA and my family member is in NH. Thank you again! 🙂

Re: EV Tax Credit with a co-signer

MaryK4 — Fri, 27 Jan 2023 22:52:34 GMT

As long as you meet the qualifications for the credit and rebate separately, you will be able to claim. The Massachusetts requirements can be found at: MOR-EV. Be mindful of the car registration, driver's license and you have to purchase from a Massachusetts dealer. Also. in reading your post, it is not necessarily required that your family member be physically present for signing and delivery- I know in some cases, the financer will accept electronic signatures (like during the pandemic restrictions). @brownie20

Re: EV Tax Credit with a co-signer

brownie20 — Sat, 28 Jan 2023 00:17:25 GMT

Thank you again for your detailed response and help! I had carefully reviewed the requirements on the MOR EV website and should qualify since there's no income requirement (hence my crazy idea to have a co-owner but register the car in MA) . And my family member should meet the requirements for the federal credit this year. Sadly, in reading about Tesla delivery (from people who are co-owners on Teslas), it seems that both co owners need to be present for delivery, and if one is missing a Fedex with signatures is required within 24hours :( I really am trying to make the whole experience as easy as possible but I'm afraid Tesla just doesn't want to make it easy lol

Re: EV Tax Credit with a co-signer

AmeliesUncle — Sat, 28 Jan 2023 18:27:25 GMT

In my opinion, the answers above are likely wrong.

Two of the requirements is that the vehicle " is acquired for use or lease by the taxpayer and not for resale" and that it is "placed in service by the taxpayer".

If the person is not using the vehicle, it doesn't seem to meet either of those requirements.

Re: EV Tax Credit with a co-signer

brownie20 — Sat, 28 Jan 2023 19:23:15 GMT

@AmeliesUncle

Sorry was this directed at me? I'm planning on buying a Tesla for my personal use, not for resale. I think the idea of having co-owners on a vehicle is that the car is owned and used by both parties; the car will be "placed in service by the taxpayer." I already own (and primarily drive) a Tesla so this 2nd Tesla will be usable by all family members. And since we donated the co-owner's car when I purchased my Tesla this will be their "primary" vehicle.

Re: EV Tax Credit with a co-signer

AmeliesUncle — Sat, 28 Jan 2023 21:08:28 GMT

@brownie20 wrote:

Sorry was this directed at me?

Sorry, no. It was directed at anybody that was relying on the previous answers that said that just because a person co-signed the loan (and is therefore on the title) gets to pick who claims the credit regardless if the other person uses the vehicle or not.

If the vehicle is used by both parties, yes, that is fine and either person can claim the credit. But many of the prior situations seem to indicate that the co-signer was only signing the loan and would have no actual use of the vehicle.

Re: EV Tax Credit with a co-signer

crimsontiger — Sun, 29 Jan 2023 02:48:39 GMT

I’m seeing slightly conflicting information from the Employee Tax Experts.

@JotikaT2 @RobertB4444 @MichaelG81 stated that as long as both people are on the title, either one can claim the credit; however, @ShirlynW stated that in order to claim a deduction or credit, you must have legal ownership and a responsibility to pay.

Which is it?

1. Person claiming has to be on the title only

2. Person claiming has to be on the title AND have responsibility to pay (e.g. co-signer)

Thanks!

Re: EV Tax Credit with a co-signer

brownie20 — Sun, 29 Jan 2023 04:42:28 GMT

@ AmeliesUncle

Thank you for the clarification 🙂