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Does anyone know how the electric vehicle used car credit work? How do I know if I’ll be eligible for the credit/how does it get credited back to me?

If I buy a used electric car, how can I receive the $4k tax credit? For background info I filed taxes married/jointly and we got a few thousand back on our return. Would the $4k be added to our total to increase our return by $4k?
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Does anyone know how the electric vehicle used car credit work? How do I know if I’ll be eligible for the credit/how does it get credited back to me?

Would the $4k be added to our total to increase our return by $4k?

 

No ... the credit is not refundable and is not simply added to your refund directly.   It can only reduce your federal taxes on your return and when the tax bill is reduced your refund can increase based on the payments made thru withholdings & refundable credits. 

 

 

Does anyone know how the electric vehicle used car credit work? How do I know if I’ll be eligible for the credit/how does it get credited back to me?

The maximum credit is your income tax liability.    For example, if you had $10,000 in withholding and got a $3000 refund, your liability was $7000.  Or, if you had $6000 in withholding and owed an extra $1000, your liability was $7000.  The EV credit is only applied to income tax liability, and can't be used to offset self-employment tax. 

 

Your income tax liability for 2022 was shown on line 22 of form 1040.

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