Whether or not you itemized your deductions or are taking the standard deduction has no bearing on you being able to take the Electric Vehicle Credit on your 2021 tax return.
Yes, if you qualify. The incentive is not an itemized deduction. Reported on Form 8936, the Plug-In Electric Drive Motor Vehicle Credit applies to certain manufactured electric or plug-in hybrid electric vehicles which draw electricity from a battery recharged from an external source of electricity. The credit ranges from $2,500 to $7,500, depending on battery capacity and weight.
In the Deductions and Credits section, scroll down to:
Can you use the EV tax credit for the new credits that will go into effect on 1/1/23 if you do not itemize deductions?
Also, I had a Solar & EV credit that I was not able to use in the past 6-10 years because my taxable income was too low. May I use those credits now or in the future?
Can you use the EV tax credit for the new credits that will go into effect on 1/1/23 if you do not itemize deductions?
Also, I had a Solar & EV credit that I was not able to use in the past 6-10 years because my taxable income was too low. May I use those credits now or in the future?
@martinaddison wrote:
Can you use the EV tax credit for the new credits that will go into effect on 1/1/23 if you do not itemize deductions?
Also, I had a Solar & EV credit that I was not able to use in the past 6-10 years because my taxable income was too low. May I use those credits now or in the future?
If you were the original owner of the electric vehicle then you need to claim the credit on the tax return for the year of purchase. The EV tax credit does NOT carry forward to future tax years if the credit cannot be used on the tax return for the year of purchase.
The Residential Energy Efficient Property Credit for Solar installations can be carried forward to future tax years if the credit cannot be fully used in the tax year of the purchase and installation of the Solar system.
You should contact a local tax professional to assist you in determining how much, if any, of the Residential Energy Efficient Property Credit can be used on the 2021 or 2022 tax returns.
@martinaddison EVs are 'credits' which are different than 'deductions' and are used on the tax forms in very different places. the EV credit has absolutely nothing to do with itemizing deductions.
here is the easy way to figure it out.
Look at Line 22 of form 1040, the EV and Solar credit can reduce this number to as low as zero, but no further.
The EV credit is 'use it or lose it', meaning you can use the credit to reduce Line 22 to zero in the year you purchase the EV, but if there is credit still left over, it is gone and lost forever. That is simply the way it works.
The Solar credit is NOT 'use it or lose it', meaning whatever you can use to reduce Line 22 to zero is great, and if there is credit still left over, you CAN use whatever is left over the next year or the next year or the next; it never expires
if you have both credits - the EV credit will get used first and then the Solar credit will get used.