EV Tax Credit question

[savany71]

I'm married and filing joint tax return with my spouse.  In the process of purchasing 2 electric cars eligible for tax credit.  Our combined income is less that $300K.  I make $200K and she works part time and her gross is around $30K.  Our tax liability is well above $15K (2 EV tax credits). 

I understand my wife and I each can claim 1 vehicle each on our joint return.

My questions is, does IRS look at combined income and combine tax liability or do they look at each person's tax liability and give credit based on individual tax liability?  

Thank you

[DoninGA]

The IRS only uses the tax code based on the tax return that was filed.

If you file your tax return as Married Filing Jointly and the AGI on your tax return is $300,000 or less then you are eligible for the EV tax credit based on the vehicles that you purchased.

Go to this IRS website for information - https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

IRS website for EV FAQ's - https://www.irs.gov/newsroom/frequently-asked-questions-about-the-new-previously-owned-and-qualified...

[savany71]

Thanks, I do understand I qualify for at least one vehicle but in the process of buying 2 qualifying electric vehicles and wanted to see if my wife and I can claim tax credit on each on "Married Filing Jointly" return since her withholding is less than $7,500 but combined tax liability is way above $15,000 credit ($7,500 for each).  

[DoninGA]

The tax liability is based on your joint tax return, not individually.   And your tax lability is not based on the taxes withheld from your income.  It is the total tax liability on your tax return Form 1040 Line 18, based on your taxable income on the Form 1040 Line 15.

You can purchase as many vehicles as you want as long as you or your spouse are the registered owners of the vehicles purchased.

[Mike9241]

in addition, be aware that if the combined EV credits exceed line 18 taxes for 2023, some of the credit will be permanently lost.

[NCperson]

@savany71 and while you can purchase as many vehicles as you want, they must be for your personal use to me eligible to claim the credit.