I'm trying to figure out if my wife and I will get the full $7500 tax credit for the ev we purchased in March of 2023. We own a home and kids. We also donate to our church. From reading online, I see that the ev tax credit is not refundable but I'm confused. Will it be applied before other our other credits? Or, better yet is there a calculator I can use to see how much we will actually qualify for?
All the nonrefundable credits are added together (on Form 1040 line 21), and the total cannot exceed the tax on Form 1040 line 18. So there is really no order to which credits you get. It just depends on the total.
Donations, mortgage interest, and real estate tax are not credits. They are itemized deductions. They do not directly affect your credits. The itemized deductions might reduce your taxable income, so they could reduce the amount of taxable income, thereby indirectly reducing the total amount of nonrefundable credits that you will get.
Thank you for the prompt response. I'm trying to figure out if I will get the whole $7500 tax credit or not. Would reducing the amount of taxes taken out of my paychecks for this year have any effect on me being able to get the whole amount? For example, if I change my federal withholding to zero for the rest of the year, will that increase my tax and make it more likely that I get the whole 7500?