Alternative Vehicle Refueling Property Credit

[AnnetteB6]

It is possible that you are not able to claim the credit for your charging station due to Alternative Minimum Tax (AMT).  AMT is a part of the calculation for the credit claimed on Form 8911, whether your particular tax return is subject to AMT or not. 

There is a tentative minimum tax for AMT that is calculated in the background as your return is completed.  Form 8911 compares that tentative minimum tax to the net regular tax after certain other credits have been taken into account.  If the tentative minimum tax is greater than the net regular tax, then the Form 8911 credit is disallowed.  

Unfortunately, the instructions for Form 8911 do not specifically spell this out so that it can be better understood or explained.  

For your reference, here is a link to the instructions for Form 8911:  Instructions for Form 8911

@karenbendixobrie

[karenbendixobrie]

Thank you for the excellent explanation! That's exactly what happened. Many thanks!

Karen

[jingalls]

i encountered the same issue and found the cause was due to another tax credit taken from installing solar on my house.  the rules of the "Alternative Vehicle Refueling Property Credit" limit the benefit based on other credits taken in the same year... wish i had known that before i had a car charger installed in December.

to verify the calculation is correct, you can click on the "Forms" link in the upper right of TurboTax window (i'm using installed software, not web based version), then select "Form 8911."  line 14 is the total tax owed from Form 1040.  that is reduced by values in 15a and 15b.  for me, the solar tax credit appears on 15b.  to see where the value in 15b came from, go to the "Schedule 3" form and look at lines 2-6. 

[karenbendixobrie]

Wow! Ok interesting! We had solar installed the same year too! This make sense. Thank you for this great informations!!

[aabdulhaqq]

Even though you still have a tax bill because your tentative minimum tax maybe larger than your net regular tax it disallows the credit. lines 16 to 18.

[DaveF1006]

The Alternative Vehicle Refueling Property Credit is a non-refundable credit meaning that if your tax liability is reduced to zero or below, you won't receive a credit because there is no tax liability to apply the credit to.

Your tentative minimum tax was in excess of your net regular tax thus reduced your total tax liability to below zero(-6116) thus nullified the credit. 

@aabdulhaqq

[rheck007]

My tentative minimum tax was not in excess of the net regular tax yet I still received $0 for the alternative vehicle refueling property credit (cost of $3500 put in). I receive the $7500 for the energy efficient vehicle summary. Am I missing something of why I do not qualify for the credit?

[JohnW152]

You have to take into account the computation for net regular tax, which is a computation made on line 16 of Form 8911.  This amount equals your regular tax before credits (line 14), minus certain credits reflected on line 15. 

This net regular tax is then compared to your tentative minimum tax (line 17).  If your tentative minimum tax is greater than your net regular tax, you can't claim the credit. 

You can walk through this looking at the forms linked below.  It's an involved computation.

If you'll look at Form 8911, Alternative Fuel Vehicle Refueling Property Credit, you'll note that line 15 reflects credits that reduce your regular tax (line 14) before the alternative fuel vehicle refueling property credit will be applied.  This includes foreign tax credit on line 15a.

But it also includes certain credits included on line 15b.  If you'll look at Line 15b in the Instructions for Form 8911, the taxpayer is instructed to:

Enter the total of any credits on Form 1040, 1040-SR, or 1040-NR, line 19, and Schedule 3 (Form 1040), lines 2 through 5, and 7 (reduced by any general business credit reported on line 6a, any credit for prior year minimum tax reported on line 6b, or any credit to holders of tax credit bonds reported on line 6k).

So, line 15b is:

• Form 1040, line 19, which is Child tax credit or credit for other dependents from Schedule 8812, plus
• Schedule 3 (further down the page in the link), line 2, which is Credit for child and dependent care expenses from Form 2441, line 11, plus
• Schedule 3, line 3, which is Education credits from Form 8863, line 19, plus
• Schedule 3, line 4, which is Retirement savings contributions credit from Form 8880, plus
• Schedule 3, line 5, which is Residential energy credits from Form 5695, plus
• Schedule 3, line 7, Total other nonrefundable credits, reduced by any general business credit reported on line 6a, any credit for prior year minimum tax reported on line 6b, or any credit to holders of tax credit bonds reported on line 6k.

So, if you have any of these credits, they'll combine to lower your net regular tax from what your regular tax amount is. 

In the end, net regular tax on line 16 equals line 14 (regular tax before credits) minus line 15 (the foreign tax credit plus any of the credits listed above).

If your tentative minimum tax on line 17 is greater than the net regular tax amount on line 16, you can't claim the refueling property credit.

@rheck007