EV Credit - Wife didn't work before marriage that happened this year, Can I use her EV credit for filing jointly this year if our total income has exceed the 300K as a family?

[magicengine]

Situation:

• Wife didn't work in 2022 and 2023
• We get married in 2023
• Total income is over 300k in 2023
• Will be filling jointly in 2024

EV Credit Question:

• Can we still get the $7500 EV credit under her name but apply for our total tax?

Thanks!

[Critter-3]

Don't know for sure yet ... the credit form is still in draft form and the instructions are incomplete.  

https://www.irs.gov/pub/irs-dft/f8936--dft.pdf 

https://www.irs.gov/pub/irs-dft/i8936--dft.pdf

[Anonymous_]

I'll page @Mike9241 

[Mike9241]

can't answer for certainty. 

this is from the code section that allows for the credit

(B)which is acquired for use or lease by the taxpayer and not for resale,

and

(10)Limitation based on modified adjusted gross income
(A)In general
No credit shall be allowed under subsection (a) for any taxable year if—
(II)the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds

(ii) the threshold amount.

so this would seem to indicate that since your wife had no income in the prior year she should be able to get the credit and take it on your current year joint return assuming you take delivery before the end of the year. the potential issue I see here is that she most likely didn't file a return for last year, The seller will be filing a report with the IRS with your wife's name indicating she qualifies. The IRS will see they have no return on file for her. Thus they may inquire about her prior year. I don't see this as a major problem, since she can respond to the notice.  

  *************

the other potential issue I see

"which is acquired for use .... by the taxpayer". if it's for her use then this should not be an issue. if it's for your use then the question is are you the "taxpayer" cited above because you're filing jointly? The proposed regs do not clarify what this means. More info may be available from the dealer because NADA, a trade organization representing franchised vehicle dealerships, has been working with the IRS to get clarification on the issues that have arisen because Congress can't seem to write clear tax laws.  

[magicengine]

Thank you all for the help!

Actually maybe I will make some correction here @Mike9241. She did have some minor income in 2022 (less than 10K) and she filed through turbo. I see most of your concern is her being the primary user. But do you see that over 300k of total income (since we will be filing jointly) being a risk here to get the full tax credit here? Thanks!

[Mike9241]

even better since she filed a return for 2022 with AGI below the threshold. if she is the primary user there is no obstacle to claiming the credit on your 2023 joint return even though your 2023 modified AGI is over the threshold because the rules state she can use her prior year's modified AGI and filing status. 

thus the only potential issue is who is the taxpayer 

(10)Limitation based on modified adjusted gross income
(A)In general
No credit shall be allowed under subsection (a) for any taxable year if—
(i)the lesser of—
(I)the modified adjusted gross income of the taxpayer for such taxable year, or
(II)the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds
(ii)the threshold amount.

this portion of the code section specifically applies to the purchaser, the name that will go on the forms the dealer will send to the IRS, which would have to be your spouse.

As previously stated, the purchaser/owner can use their prior year's AGI and filing status to qualify for the credit. Based on what you provided she meets this test. So there is no problem if she is the primary user in claiming the credit in 2023. There is no clarification that "taxpayer" for purposes of  IRC 30D(d)(1)(B)

"which is acquired for use or lease by the taxpayer and not for resale" would include primary use by the spouse, on a joint return, who is not listed as the purchaser/owner in the seller documents sent to the IRS.

Based on what has been issued only one name and tax ID number can go on that documentation.

Talk to dealers to see if they can provide additional info on this point and then be sure to ask for the source.  

[magicengine]

Thank you

[Affordabletaxes2021]

Will your wife have at least $7,500 in tax liability when she filed? The credit is based on the tax liability it’s not a blanket refund. 

[Critter-3]

I have an issue with the instructions/rules as they are currently written ... the term "taxpayer" (although usually used to reference the primary taxpayer on the return) can also be considered to be both spouses combined.  I think these instructions will eventually be fleshed out in the future with more illustrations. 

[magicengine]

Thank you all for the help. The people at the dealership actually told me that we can only use our 2023 income as the qualification. But that is very different from what I looked up online. I thought if the vehicle is delivered in 2023 then we can use either 2022 or 2023 income as qualification. Can anyone help me clarify? Thanks!