EV Tax credit for both cars

[c033688]

Hi, 

So we file tax jointly every year. Early this year, we bought a tesla model Y (2023). The car is under my wife's name (primary), and my name is second.

I am thinking to trade my model 3 (2019) in for another new model 3 (2023). This car will be only under my name. 

I have two questions:

1. Can we still claim both vehicles for tax credits next year (2024)? So confused, Tesla sale reps told me that can't have "double dip" since my name is already on model Y. But they said, talk to tax advisor!

2. Can we use tax from last year to file for EV credits? this is what I found on IRS website: "You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your modified AGI is below the threshold in 1 of the two years, you can claim the credit."

Thank you, 

TM3MT

[DoninGA · Accepted solution]

If your 2023 AGI is $300,000 or more then you can use your 2022 AGI if it is less than $300,000 for the EV credit.

Yes, you can get the credit for two electric vehicles on the 2023 return if purchased and placed in service in 2023 since you will be filing as Married Filing Jointly.

See IRS website for the 2023 EV credit - https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

Assuming that you are eligible for the $7,500 credit for each vehicle, to utilize the total $15,000 EV credit for two vehicles your tax liability on your Form 1040 will have to be $15,000 or greater.  If your tax liability is less then the EV credit will reduce your tax liability to zero and any remaining EV credit is lost.

[NCperson · Accepted solution]

@c033688 for new cars, there is no limit to the number of EVs you can purcahse in a calendar year. 

The benefit to doing so is limited by a different factor: you have to have the tax liability that exceeds the EV credit for it to be worthwile, i.e. Line 22 of Formn 1040 (prior to the credit) has to be high enough to create the benefit.  

for example, if Line 22 is $22,500, you could conceivably buy 3 eligible EVs and get the $22,500 tax credit, but if you buy the 4th one, there is no tax benefit. 

[c033688]

Thank you both. 

So if line 22 on my form is $40,000, I can buy or own 5 EV cars in a same calendar year?

Many thanks, 

[NCperson]

to be specific, if you buy 5 NEW EVs , and Line 22 is $40,000 prior to applying the tax credit, that will work

being the "owner" is not good enough as you could be the 2nd owner, which means the auto is not elgible as a NEW EV.

and it has to be a NEW EV, not just an EV.  in other words, a used EV does not qualify.