Do I get a tax credit for installing a 220V car charger at home?

[KathrynG3]

Form 8911 is still available for 2020. Your circumstances will determine whether this credit is available to you.

Click the Learn More link under Deductions & Credits under Cars and Other Things You Own and Entergy-Efficient Vehicle Charging Station, which states in part:

The following conditions must be met to qualify for this credit:
 - You started using the station in 2020.
 - You are the original owner of the station.
 - The station is used primarily in the United States.
 - The station is installed in your main home or business location.

Additional Limitations: 

Personal Use:

 - If your credit is bigger than what you owe in taxes, the taxes you owe are reduced to zero, and the rest of your credit is lost.

 - If you pay alternative minimum tax (AMT) you will not be able to claim this credit. If you are close to paying AMT, this credit may be limited by your tentative minimum tax as calculated on Form 6251, Alternative Minimum Tax - Individuals, line 33.

Business Use:

 - The business portion of the credit is part of Form 3800, General Business Credit, so any unused amount of the credit is not lost, but is eligible for the carryback/carryforward provisions of the general business credit.

 - If you use this station for business and claim a depreciation deduction, you must subtract the credit amount when TurboTax asks you to enter the cost of the refueling station in the Business (Schedule C) or Farm section of the program.

Example: You paid $5,000 for your Nissan Leaf charging station, which you use for your own business. The charging station is eligible for a credit of $1,500. To claim the depreciation deduction, you must subtract this credit amount when entering the cost of the refueling station in the Business or Farm section of TurboTax.

Credit Recapture
You may have to recapture some or all of the credit if the station no longer qualifies for the credit.

For more information, see: 2020 instructions for Form 8911 Alternative Fuel Vehicle Refueling Property Credit.

[ac1113]

I am not filing under AMT and meet all the requirements.  I see something about 179 expense deduction, but since this was installed in 2020, the deduction would be $0.  Am I missing something?  Still not sure why the software is not calculating the credit.

[Woodchucked]

@ac1113 

We had the same problem as you. Kept calculating as $0. Then after researching and asking questions on the forums, I believe the answer is this. As simple as I can understand it.

- This is not a cash credit, you will not receive any money back on this - no matter what. It's a credit against what you owe (if you owe anything)

- If you receive any money back on your taxes, you are not eligible for the credit. It will calculate as $0. For example, if your tax return says you will receive $2000 - you won't get the credit. Another example, if your tax returns says you only get $5 back - you still won't get the credit.

- You get this credit only if you OWE money to the IRS (and you are not getting any money back). So if you owe $500 to the IRS, then the credit will kick in, and you'll get a reduction in what you owe. In my case, our tax credit would have been $300 from what I paid for in installation and the charger cost. If I owed $500 to the IRS, it would have reduced it by $300, and I would then only have to pay $200. Now lets say I owed only $5 to the IRS, and my EV credit was $300. It would only cover that $5 owed down to $0 - and I would not get the remaining $295.

This is at least how we understood it when we worked out our taxes on this. I hope this is a bit more helpful. I am NOT a Tax Expert, just a laymen trying to figure this out.

And to any Tax Experts reading this, if I'm completely wrong, please let me know. 

[ac1113]

Thank you for your reply.  I understand it is a tax credit and not refund/rebate.  I do owe taxes, which why I am keen to understand why the software is not providing the credit.  🙂

[Woodchucked]

Ah OK! Then this is out of my league! Sorry that it's acting up :(

[AmyC]

Take a look at the form and instructions, About Form 8911, Alternative Fuel Vehicle Refueling Property Credit. Pay particular attention to part III lines 15-17. Is there anything there preventing your credit?

@ac1113

[ac1113]

No.  There is nothing preventing me from getting this credit.  I have no Foreign Tax Credit or other credits.  This was installed at my home and I have a positive number on line 16 of the 1040.  I don't see why the 30% credit is not being applied.

[AnnetteB6]

There are a couple of things that can cause the Alternative Fuel Vehicle Refueling Property Credit to be reduced to zero.

First, the credit is non-refundable and you must have a tax liability in order to take advantage of the credit.  Also, the calculation of possible Alternative Minimum Tax (AMT) is involved in the calculation of the credit and may reduce it to zero.  

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.  

Take a look at your Form 8911, lines 16, 17, and 18.  If line 17 is greater than line 16, then your personal credit for Form 8911 will be disallowed.  

@ac1113

[ac1113]

ok.  i can see the calculations now.  seems odd that a credit for the car would prevent me from getting the credit on the charger.  thanks.

[DawnC]

It is possible that you could get both, but when the net tentative tax exceeds regular tax, the credit on Form 8911 (Line 18) is not allowed.  @ac1113

[EHARNISH]

Does the logic of comparing tentative minimum tax to net regular tax effectively mean that I can only get the Alt Fuel Vehicle Refueling Property Credit if I am paying AMT? 

[JohnW152]

No, not at all.

Alternative Minimum Tax calculations don’t come into play very often with this credit.  

The IRS has a specific order in which credits are to be applied to offset tax.  This is the much more likely scenario you’d encounter.

Credits are applied to tax in this order before getting to the credit on Form 8911:

1. Foreign Tax Credit (Form 1116)

2. Nonrefundable child tax credit or credit for other dependents from Schedule 8812

3. Credit for child and dependent care expenses from Form 2441

4. Education credits from Form 8863, line 19

5. Retirement savings contributions credit. Attach Form 8880 

6. Residential energy credits. Attach Form 5695 and, 

7. Total other nonrefundable credits, reduced by any general business credit reported on Schedule 3, line 6a, any credit for prior year minimum tax reported on Schedule 3, line 6b, or any credit to holders of tax credit bonds reported on Schedule 3, line 6k). 

If your taxes are completely offset at this point, you have no tax for this credit to offset.  See Instructions for Form 8911 (Rev. January 2022) for more information.

@EHARNISH