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jrusso300
New Member

I just purchased an electric vehicle and want to take advantage of the full 7500 tax credit. I usually receive a refund. How does this affect my credit?

 
4 Replies
DoninGA
Level 15

I just purchased an electric vehicle and want to take advantage of the full 7500 tax credit. I usually receive a refund. How does this affect my credit?

Taking the electric vehicle credit on you tax return will not affect your credit score, if that is what you are referring to.
jrusso300
New Member

I just purchased an electric vehicle and want to take advantage of the full 7500 tax credit. I usually receive a refund. How does this affect my credit?

I'm sorry, that's exactly how that reads now that I see it again. My concern was that I may not get the full 7500 that is offered in the form of a tax credit for buying an EV. I have since learned that line 63 on my past 1040 is a decent guide to sort of figure out what my tax liability might be (unless I'm wrong). My guess is that if that figure is less than the full 7500 then I would only get credit for that amount, looks like I may loose a couple thousand. I was thinking about going exempt on the next couple of paychecks to increase my tax liability, but I'm not sure if that would work either. Thanks for responding to my silly ignorance.
SteamTrain
Level 15

I just purchased an electric vehicle and want to take advantage of the full 7500 tax credit. I usually receive a refund. How does this affect my credit?

Going exempt won't help at all...that just changes your withholding and not your liability.  Your tax liability is the tax calculated before your tax pre-payments are considered as credits.

What would help, if it doesn't look like you would be able to use it all, would be if you converted some $$ in a traditional IRA......to a Roth IRA.  Something else would be to take capital gains by selling stock or Mutual funds that you own (but the taxes on those depends on how much income you actually have)

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
Anonymous
Not applicable

I just purchased an electric vehicle and want to take advantage of the full 7500 tax credit. I usually receive a refund. How does this affect my credit?

exempt only affects withholding not your tax liability.    you are correct.  any unused EV credit not used in the year the vehicle is purchased is lost.  by the way, not all EV's qualify for the maximum credit of $7,500. Credit is based on size of vehicle and  battery capacity and in addition the credit is phased out as more than 200,000 qualifying vehicles made by the manufacturer are sold in the US.  



https://www.energy.gov/eere/electricvehicles/electric-vehicles-tax-credits-and-other-incentives

https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d


 

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