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Refund reduced after entering EV tax credit

When I enter EV tesla information, child tax credit reduced from $2,500 to $1,600 and I also do not get full $7500 EV tax credit. Before entering Tesla information for the credit, my tax refund is $3904.00 and after entering tesla it shows only 6,446.00. I checked many times but doesn't get any clue. It should to be $3,904 + $7500.00 = 11,404. Please help me to understand.

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1 Reply
MinhT1
Expert Alumni

Refund reduced after entering EV tax credit

The EV tax credit is a non-refundable tax credit.

 

It can only reduce your tax liability to zero. Any residual part of the credit is lost. In your case, your tax credit is reduced to your tax liability before the credit. Also, as your tax liability is reduced to zero after application of the EV tax credit, your child tax credit is reduced to the refundable part of it, which is $1,600 (known as the Additional Child Tax Credit).

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