Hi, I'm trying to maximize the $7500 tax credit for Electric Vehicle Credit. Last year I paid $1300 in federal taxes and I expect the same this year.

[NOCOMPRNENDEJAVU]

$8400 was withheld last year. Assuming the situation is similar this year will I be able to "use" the entire $7500 credit for 2021 taxes?

[Critter-3]

LOOK at the 2020 form 1040 line 16 ONLY ... that is the amount of  fed tax you owed which can be negated by the EV credit.   If the amount on the 2021 form 1040 will be $7500 or more than you can use the full EV credit to zero out or reduce your tax bill meaning more of the withholding will be refunded.

[NOCOMPRNENDEJAVU]

Thank you so much! I was freaking out trying to adjust my W-4 but it looks like I will have more than enough. Very stupid, basic question but does this mean my refund will be significantly higher? (line 16 is $14,000) It seems too easy...