EV Tax Credit Question for Year 2023 - Simple Inquiry

[gorilla1969]

I apologize up front if this is a really dumb question but I feel it is better to be safe than sorry.

I've read that a refund is only applicable if you owe taxes and that the refund cannot be more than what you owe for the year.  As I have payroll deductions from my employer, I typically 'owe' little or no taxes at end of year. 

Now for the stupid question. 

Technically, at the end of the year I don't 'owe' any taxes as they've already been paid by way of my payroll deductions.  Does the max $7500 EV refund apply to all monies paid to the IRS throughout the year or only if I owe additional money at the end of the year after filing taxes? 

I think I know the answer but would feel better if someone could verify the terms. 

Thank you.

[JohnB5677]

A Non-Refundable tax credit is capped at a taxpayer’s tax liability.  Note that it says tax liability, not refund or taxes owed.  So, it does include the monies paid to the IRS throughout the year and is not based on if you owe additional money at the end of the year after filing taxes. 

If you wish to look at this year's tax return to get an idea of where you stand.  The credit is based on line 24.

1. On the menu bar on the left that shows.
   1. My Info
   2. Federal
   3. State
   4. Review
   5. File
2. Select Tax Tools
3. On the drop-down select Tools
4. On the popup menu
5. Select View Tax Summary
6. On the left sidebar

Select Preview my 1040.

Line 15 - Taxable Income

Line 24 - Total Tax.

Line 25 - Withholdings.

Line 33 - Payments including Credits.

Line 34 - Overpayments.

Line 37 - Tax owed.

Credits for New Clean Vehicles Purchased in 2023 or After