Claiming EV Tax credit

[ajaykmis]

Would married filing separately be a better way if the household income is above the 300K cap for the EV credit. We are thinking about buying an EV, and my spouse's income is under the 150K limit.  

I know married filing jointly will save more taxes in a normal year, but would the saving of $7500 be worth considering this option for this tax year? 

[Opus 17]

The income limit for married filing separately is $150,000.  If one spouse has less than $150,000 of income, you can try it.  Only you can know, based on all facts and circumstances, if you come out ahead.  Everyone's situation is a little different. 

[NCperson]

@ajaykmis - 

a few thoughts:

1) what was your combined income in 2022?  the rule for the credit is the lessor income of the current year and the prior year.  So even though your combined income is over $300,000, was that the case in 2022? (It's line 11 that is the critical income line to review)

2) your spouse still needs enough income so that the tax liability on Line 22 prior to applying the credit is at least $7500 to capture the entire credit, but in this case that may not be necessary because even a small credit is better than no credit. 

3) best to test out both scenarios (file separate and file joint) at this website.  It is quite accurate and reflects the 2023 tax rules.  You do risk losing other tax benefits by filing Separate but the only way of really understanding the implications is to test it out.  Remember that both of you must either itemize or take the standard deduction when filing Separate.  One can't itemize while the other takes the standard deduction. 

https://www.dinkytown.net/java/1040-tax-calculator.html