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EV Tax Credit not applying full amount... why?

I purchased a 2023 Tesla Model 3 Standard Range Rear wheel drive EV in June for personal use in the USA.  I went to government site to check for eligible vehicles for Clean Energy Tax Credit. I filled out the info they asked for and it said that my car qualifies for $7,500 tax credit and was stated so by Tesla at th time as well. I'm doing my taxes now and when I fill the info in Turbo Tax it says my tax credit is only like $3100. Why is there a difference or what am I doing wrong? I own my own business so I currently owe around $10k federal, but when i enter the credit info and my VIN in, it only lowers it around $3100 and not the full $7500. The tax document i received from Tesla also verifies the car's full eligibility is $7500. Is this a problem on TurboTax's end? I called and the woman i talked to could not give me an answer.  

 

Federal Tax Credits for Plug-in Electric and Fuel Cell Electric Vehicles(Vehicles placed in service on or after April 18, 2023 and before January 1, 2024)Make Model ModelYear Vehicle Type Credit Amount MSRP Limit Assembled in N. America

Tesla
 

 

Model 3 Standard Range Rear Wheel Drive2022–2023 
$7,500$55,000 
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1 Reply
RobertB4444
Employee Tax Expert

EV Tax Credit not applying full amount... why?

The electric vehicle credit is a non-refundable credit.  That means that it can only be used to reduce your income tax owed down to zero.  It can't be used to increase your refund after that OR reduce your self-employment tax.  

 

I can't see your tax return but I am betting that your income tax for this year is around $3100 and if you look at your 1040 on line 22 you'll see a zero because your energy credit knocked your income tax down to zero and then on line 23 you'll see the amount that you still owe added as self-employment tax.  

 

That will mean that the remainder of your EV credit - around $4400 - will be rolled into next year to reduce your income tax once again.  You can check that amount on form 8936.  

 

To double check that I'm right since I can't see the return you need to look at the forms.  If you're on the desktop program that's easy - just switch to forms view and look at form 8936 and form 1040 to see if the numbers match what I'm saying.  

 

If you're on the online version then you need to finish your tax return and pay for the software BUT do not file yet.  When it asks if you want to print a copy of your return before you file you say 'yes' and you'll get a pdf copy of the tax return and you can review forms 8936 and 1040 then.

 

@fireemblem777 

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