Married Filing Jointly and 2023 EV Tax Credit

[TheSappster]

My wife and I will be filing our taxes as married filing jointly for the 2023 tax year (I.e., in 2024).

We bought a model 3 early in 2023 and are considering trading in our other vehicle for a model Y. Both vehicles qualify for the $7500 tax credit. 

We make under the $300,000 cap and our tax liability will end up being around $30000-$35000 for the 2023 tax year. 

Can we get the EV tax credit for both vehicles if we file jointly? In other words, is there a limit on how many vehicles you can claim credit for if you file jointly, and are under the income cap?

We specifically want to file jointly because we will pay more in taxes if we do married filing separately.

Thanks advance for your help. 

[DawnC · Accepted solution]

Yes, you can take the credit on both cars.   And yes, filing jointly is almost always better than filing separately.   You can only claim the credit once for each qualifying vehicle. The tax credit must be claimed in the year when you purchased and began to use your new fully electric or plug-in hybrid model car or fully electric two-wheeled vehicle.

However, if you purchase a separate qualified fully electric or plug-in hybrid vehicle in another year, or two separate qualified cars in the same year, then you can still claim the tax credit for the other vehicle. It is not a once-in-a-lifetime tax credit in that sense.

[TheSappster]

That is excellent news.  

Thanks for the help and the amazing quick response!!

[Stagecoach]

Using turbotax, how do we apply for the State EV tax Credit,

Example:  I'm in Colorado where will the form be within Turbotax?

Additionally:  Where will Federal IRS Form 8936 be within Turbotax?

Thank you so much!

[vamsi_vk]

I'm planning to do precisely the same as @TheSappster , however, when I contacted the Tesla showroom they told me I can only qualify for one of the vehicles as I am not keeping both cars until the end of the year. Am I missing something, is there any IRS clarification link on this matter?

[NCperson]

@vamsi_vk - ask the sales reprentative to document that via an IRS website.  There is nothing on the IRS website that states that.  If he can't provide proof from the IRS, it is hearsay.  

On new EVs there is no limit to how many you can purchase in a given year and maintain eligibility for the tax credits.  You still have to have tax liability (look at Line 22 of your form 1040) to get the credit.    

On used EV's, there is a limit of one every three years to get the tax credit.  

[vamsi_vk]

Wonderful. Thanks for the quick response, appreciate your help!

[Academic1]

This is very helpful information, as we are looking at the same type of second purchase after getting a used Chevy Bolt that qualifies for the $4000 used credit. I just wanted to confirm that the same principle that you outlined for the new purchase above would also apply to two qualifying, used EVs?

Many thanks in advance!

[NCperson]

NO! 

on the used EV's, it's only one every three years! 

https://www.irs.gov/newsroom/topic-d-frequently-asked-questions-about-the-eligibility-rules-for-the-...

Q4. Who is eligible to claim the previously-owned clean vehicle credit? (updated February 3, 2023)

A4. Only individuals who meet the following requirements can claim the previously-owned clean vehicle credit:

• The taxpayer purchases the vehicle for use and not for resale.
• The taxpayer cannot be claimed as a dependent on another taxpayer's tax return.
• The taxpayer has not been allowed another previously-owned clean vehicle credit in the three-year period prior to the date the previously-owned clean vehicle is purchased.
• The taxpayer's income level cannot exceed certain thresholds. (see Topic E FAQ 1)

[Academic1]

From the previous answer, it appears that individuals are treated separately, that the credit is taken by only one person and not by a couple, per the FAQ Q11 (below) about sharing a credit. You are correct that an individual can only take ONE credit every three years, but a couple filing jointly consists of TWO individuals, not one. The question was whether each individual in the couple can take the credit, knowing that it can only be taken once every three years. Thanks.

"Q11. Can the new clean vehicle credit be split between multiple owners? (added March 31, 2023)

A11. No. In certain instances, multiple taxpayers may purchase, place in service, and be titled as owners of a single vehicle. For example, a married couple that files separate tax returns may jointly purchase and take possession of a new clean vehicle that qualifies for the credit and both be titled as owners of the vehicle. However, only one taxpayer can claim the new clean vehicle credit per vehicle placed in service, and the credit may not be allocated or prorated between multiple taxpayers. In the case of married taxpayers filing jointly, either spouse may be identified as the owner claiming the new clean vehicle credit.

The name and taxpayer identification number of the owner claiming the credit new clean vehicle credit should be listed on the seller's report. See Topic B, FAQ 9. Accordingly, multiple owners of a new clean vehicle should inform the seller which owner will claim the new clean vehicle credit so that the seller can identify that taxpayer on the seller's report. The credit would be allowed only on the tax return of the owner listed in the seller's report."

https://www.irs.gov/newsroom/topic-a-freque[product key removed]ions-about-the-eligibility-rules-for...

[alanks2000]

I purchased a model Y under my and my companies name. Can I register my second EV under my name, and file my taxes as married filing jointly to receive two credits? Or would the second vehicle need to be under my wife's name?

[NCperson]

you are permitted multiple NEW EVs (assuming all the qualifications are met, the issue is how much tax liability do you have on Line 22 of form 1040?) 

whether the 2nd EV is in your name or your wife's doesn't matter - you are filing Joint in any event, 

[Vpvinesh]

Can you please point to where in the IRS site or documentation says that couples filing jointly each can take a tax credit.  I am getting conflicting information regarding this.  

My wife and I jointly qualify as far as being below income limit and enough tax liability for 2 vehicles. I purchased 1 for myself and considering getting another but told that only one qualify because IRS can’t tell who’s taking the claim when filing jointly.  

thank you for your advice 

[NCperson]

@Vpvinesh there is no where that it states that you are limited to one per person person.  Hence, you can purchase as many EVs as you please. 

The issue is whether they are for for personal use and whether your tax liability (line 22 of Form 1040 prior to the tax credit) is large enough to absorb the credit.

there can't be multiple owners that claim the credit on one car (Q11) but there is nothing that states one owner can't claim multiple credits.  See the difference? 

suggest reading through these FAQs

https://www.irs.gov/newsroom/topic-a-frequently-asked-questions-about-the-eligibility-rules-for-the-...

[gkr25]

I got married in 2023 and our AGI will be above 300k. However prior to marriage in 2022 my spouse had an AGI less than 150k. Can we claim the 7500k tax credit on our 2023 taxes when filing as married jointly? My initial thought is yes but wanted to double check before making the purchase. TIA