Does 2023 tesla qualify for 2022 EV Credit?

[1911199]

I purchased an tesla in 2023 and I was told that it is qualify for 2022 tax year credit, I would like to make sure does my tesla qualify for the 2022 tax year ev credit? or it only qualify for 2023 tax year. thank you.

Beside, this tesla was include with a co-signer who file the tax seperatly, dose he /she also qualify for the ev tax credit too? 

[MarilynG1]

You would need to purchase the vehicle by 12/31/2022 to use on your 2022 return; however, you can claim it on your 2023 return.   Remember, you need to have a Tax Liability to claim the credit, as it is a non-refundable credit.  

Here's more info on Vehicles Purchased in 2023 and Splitting the Electric Vehicle Credit. 

Only one credit for vehicle can be used.  Either you or the co-owner can claim the credit, but not both.

@1911199 

[Mike9241]

if the vehicle qualifies for the credit, 2023  the dealer was suppose to  provide you with a certificate.

To claim the EV tax credit, you need to purchase a qualifying electric vehicle, obtain a letter of certification from the dealership, fill out IRS Form 8936, and look for state rebates and credits.

[dmertz]

No Tesla qualifies for a 2022 EV tax credit.  A Tesla purchased in 2023 would qualify for a 2023 EV tax credit.

[madtax1]

So if I purchased a TESLA on March 25th 2023, I can't claim the EV Tax credit until next year's tax date(4/15/2024) when I file my 2023 tax return. Is that correct? 

Thanks,

[dmertz]

@madtax1 , that's correct.  If the purchase qualifies for the credit, you'll claim the credit on your 2023 tax return next year.

[srpatel55]

I have transitioned from a salaried job to a contractor starting this year.  Now the full check comes to me (nothing deducted) and I need to file estimated taxes.  Lets say the total yearly income is expected to be same as last years salaried job (around $110K), and based on my filing last year's taxes after standard deduction, I  owed tax of $8,400 (MFJ with taxable income of $78K after standard deduction), which was almost the same as what was deducted in payroll federal tax last year.  Given that, if I want my fully eligible EV Tesla Y credit of $7,500, do I make my estimated federal tax payments of at least $7,500 or more eg $8,000 this year, to get the full benefit of the EV's federal $7,500 credit?  Is my understanding that if I pay less eg $7,000 in taxes, then I will lose the $500 of the EV's federal tax credit.  Pls let me know if you need any clarification.  Any insight will be very much appreciated.

[Mike9241]

the EV credit goes against your tax liability. the taxes you pay in go against the tax liability after the EV credit. you tax bill will likely be significantly more in 2023. as self-employes there is the self-employment (SE) tax effectively about 14.1% of your net self-employment income. that's about $14,000 on $100,000 of SE income. in addition, you will owe for regular income taxes. The EV credit cannot offset the SE tax.  it's limited to line 22 on the return before the EV and certain other credits. 

you might want to do a preliminary tax calculation using this link. there are other calculators for 2023.

https://us.icalculator.com/tax-calculator/annual/2023.html 

as to the EV credit ask the dealer. There are many new rules, and we have no info about the Telsa you will buy. Some qualify others will not. 

to be safe from underpayment penalties you would need to meet one of the following rules f for 2023

There will be no federal penalties for not paying in enough taxes during the year if ( i have eliminated rules that likely won't apply to you):

1) timely estimated tax payments equal or exceed 90% of your 2023 tax or

2) timely estimated tax payments equal or exceed 100% of your 2022 tax (110% if your 2022 adjusted gross income was more than $150K) or

the lower of 1 or 2 is your required annual income tax payments. 1 is difficult to know until the year end so generally option 2 is the safer option. under the simplified method 25% of the estimate taxes must be paid in each quarter by 4/18, 6/15, 9/15 and 1/15/24. 

failing this and being subject to penalties you can use the annualized installment income method. 

this method requires knowing your income and deductions thru 3/31, then 5/31, then 8/31, and finally tear end which should be the same as the tax return. the income is annualized. taxes are computed on the annualized income and then de- annualized. your tax payments for each period must equal or exceed these amounts to avoid penalties.

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state laws vary

[dmertz]

@Mike9241 , the EV tax credit only applies against income tax, not to other taxes from Schedule 2 Part II like SE tax.

[srpatel55]

Thank you very much.

[NCperson]

Look at Line 22 of Form 1040. The EV credit can reduce this line to no lower than zero - it is that simple. 

So if Line 22 is at least $7500 BEFORE the credit is applied means you will receive the entire credit.