I have an unpaid tax liability for 2017. I will have a $7500 electric car tax credit for 2018. Can I apply the electric car tax credit for 2018 to my 2017 tax liability?

[jeffarmstrong7]

The electric car tax credit is not refundable, but it is unclear if it can be used against unpaid tax liabilities for prior years.

[Critter · Accepted solution]

NO ... but if you have a refund on the 2018 return it will be grabbed for the 2017 outstanding balance due. FYI ... that credit is not refundable ... it can only reduce your federal tax liability to zero ... the unused portion cannot be refunded. 

[jeffarmstrong7]

So any tax due for 2018 will be reduced to zero because of the electric car tax credit, but I cant apply any of it to the previous year tax due?

[Critter]

Correct ... that is how the credit works.   Now if you had say $1000 in withholding and you have zero tax then the $1000 refund will be grabbed for the prior year debt.