IRS Electric Vehicle Federal Tax Credit Liability

[KP1017]

If I make $100,000 gross income in 2022, filing single, and live and work in NJ, how much federal tax liability would I have using  the standard deduction? I want to know if I can claim two $7500 tax credits within the same year (using the old credits pre-IRA). 

Will I have $15,000 in federal tax liability?  

[Critter-3]

Tax liability on $100,000 would be just about 15,000  if you are under the age of 65. 

[NCperson · Accepted solution]

$100,000 - 12,950 = 87,050 taxable income

22% tax bracket

$1027.50*10%  + $31,500*12% + $45,275*22% = $15,207

10%	Up to $10,275
12%	$10,276 to $41,775
22%	$41,776 to $89,075

[NCperson]

@KP1017 - by the way, if you are using the old credits, that suggests you already own these cars or have a written binding contract dated prior to August 16th, right? otherwise, you are subject to the new law...... 

[KP1017]

Yes I have purchased an Ioniq 5 back in May and looking to get a Mach E before the end of this year which is built in North America so it still qualifies for old credit this year. 

[NCperson]

@KP1017 -  cars purchased after August 14 must be quailified under the new law..... suggest checking with the dealer - I think there is a battery manufcaturing requirement and there is an MSRP requirement ($55,000). 

[KP1017]

Yes I already checked. MSRP cap and battery requirements don't take in effect till 2023. Only thing that changes from now till year end is the requirement for the vehicle to be built in NA. 

[Critter-3]

Also be aware that the net wages reported in box 1 of the W-2 is what counts ... things like 401K contributions and pre tax medical will reduce that gross wages paid. 

[NCperson]

@Critter-3 - the income limitation is based on (M)AGI, for simplicity for the time being, let's take that as AGI.  the taxpayer's income must be below these thresholds in either the current year or the prior year.  Congress created a 'gimmie' in that if this year's income exceeds the threshhold, you can still look back to the prior year to see if you qualify. 

Single $150,000

HOH: $225,000

Married: $300,000