Electric Vehicle Tax Credit

[RaviKK]

Hi

I purchased Tesla model 3 last year in September. According to the IRS website, (https://www.irs.gov/businesses/irc-30d-new-qualified-plug-in-electric-drive-motor-vehicle-credit ) I am qualified for a tax credit of $1850. 

 With that numbers, I submitted my tax return but it got rejected. Turbo Tax was showing that they are updating the software after that I can resubmit returns.

 This morning software has been updated. With that update, electric vehicle credit is reduced to $469.  Not sure why. can you please check it?

[jlstox]

I experienced the same thing.  Filed taxes yesterday, were rejected, TurboTax fixed them and now we are getting a Telsa tax credit of $1,875 instead of $3,750 for a vehicle that was purchased in April 2019.  Can anyone explain since the IRS website shows the larger amount should be credited

[LeonardS]

TurboTax has released an update to Form 8936.  Follow these steps to insure that TurboTax is using the updated Form 8936. 

• Clear your browser's cookies and cache 

• Delete Form 8936  

• Enter your vehicle information on Form 8936 

This link Filing Tax Form 8936: Qualified Plug-in Electric Drive Motor Vehicle Credit has information you may find helpful. 

[CemS]

I experienced the same thing.  I tried to clear my browser and reinstall new Turbo Tax updates, but most of the problem seems to be in the wording.  We are claiming the refund that we think we deserve (in your case $1875).   However, Turbo Tax wants you to enter the full $7500 in that first box.  It then looks at the database for the timing of your purchase and decreases the refund accordingly.  When you enter this amount, it automatically decreases the amount of your refund from there.  I have yet to submit my taxes again, but this time it seems to be calculating it correctly.  I hope this works for you all.  

[CemS]

See my post below.  I cleared my browser history and deleted the forms as recommended by LeonardS the tax guy, but I believe the issue is that you know what refund you are due.  Turbo Tax assumes you are going to claim $7500, and then decreases accordingly.  If you claim 7500 up front, it will decrease this to $3750, as you deserve.  I suspect you are putting in 3750 initially, because the wording is weird, and then it is halving your rebate from what you are requesting.  Just change that initial number.  I have not submitted these taxes to Turbo Tax again since I got rejected, but I hope this works for you and me.  

[reginateslapink]

Same thing happened to me too. 

[reginateslapink]

If you put in 7500.00 it will calculate a 1875.00 credit. I thought it was interesting when I put my cars info in and Turbotax initially gave me a 7500.00 but then I had to manually put in 1875.00 and I got that credit but now today I go in and I only got a 469.00 credit. I will also delete the cookies and start over. 

[KurtL1 · Accepted solution]

Recently Form 8936 was updated in TurboTax Online and the old calculations may still be stuck in the cookies and cache. 

1. Deleting the Form 8936 
2. Log off TurboTax
3. Clear cookies and cache (Hold down the keys CONTROL, SHIFT, and DELETE at the same time)
4. Sign back in and answer the electric car questions again.

To delete a return off of your return you need to:

1. Select Tax Forms in the Black bar on the left side of the screen.
2. Select Tools from the drop down menu.
3. On the Tools Center Select Delete a form.
4. Locate the form on the list and select Delete.
5. You will be asked to confirm the deletion.

[brian95006]

I am using the CD version of TurboTax home and business. When I enter my tax credit of $1875 my refund actually decreases by $1406. I am better off not taking the credit which does not seem correct. I am still paying overall taxes with or without the credit.

please help

[AnnetteB6]

Be sure that you do not change the maximum credit amount shown on the screen, otherwise the calculation will not be correct.  

Here is the explanation:  

TurboTax will calculate your maximum credit based on the details entered for your vehicle and any applicable phase-out based on the purchase date. 

On the screen where it shows the amount of credit you qualify to receive, the box at the bottom of the page is showing the maximum credit that would have been allowed for your vehicle had a phase-out not applied.  Your credit may be limited by the phase-out.  If you change the number on that screen, your credit will not be calculated correctly.  

@brian95006

[vqmai]

Hi Kurt1, i had the same issue with this electric car credit.  I bought a Tesla model 3 in may 2019 and should qualify for $3750 as well and had similar issue.  thanks for the help here.  but also, can i claim this electric car credit on my state return for Virginia base on the this House Bill #469 below.  Please help!

1. That the Code of Virginia is amended by adding in Article 3 of Chapter 3 of Title 58.1 a section numbered 58.1-339.13 as follows:

§ 58.1-339.13. Electric vehicle tax credit.

A. As used in this section, "electric vehicle" means a new qualified plug-in electric drive motor vehicle, as defined in 26 U.S.C. § 30D, that (i) if purchased, is registered with the Virginia Department of Motor Vehicles within 30 days of purchase, or (ii) if leased, is leased for primary use in the Commonwealth. If 26 U.S.C. § 30D is repealed and no successor is enacted, then the reference in this section shall be given the meaning of such provision as it existed immediately prior to its repeal.

B. For taxable years beginning on and after January 1, 2018, a taxpayer shall be allowed a credit against any tax imposed under this article in the amount of 10 percent of the purchase price of an electric vehicle. If the taxpayer leases the electric vehicle, the purchase price shall equal the total price for the lease term. The credit shall not exceed $3,500. The credit shall be nonrefundable and if the credit exceeds the taxpayer's tax liability under this article for the taxable year, he may carry forward any unused credit for the next three taxable years or until the full credit is used, whichever is sooner.

C. On or before December 1 of each year, the Department of Motor Vehicles shall notify the Department of the percentage of motor vehicles registered in Virginia that are electric vehicles. If such percentage is greater than or equal to 20 percent, the Department shall cease allowing tax credits under this section for the next and all subsequent taxable years. No tax credits shall be allowed under this section for taxable years beginning on and after January 1, 2023.