Hi. Sorry If this was answered earlier. my federal income tax withheld is 17000 $ in 2023. I bought Tesla model Y in July 2023. So , when I file in March 2024. I do get the entire refund of 7500$ right. Please correct me If I am wrong.
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Maybe less, maybe more.
Ignoring the credit itself...
The problem is that your tax current withholding ($17k), may not cover all of the tax assessed, so some of the credit may be used up for paying the extra you are assessed.
But if the $17k overpaid the tax assessed, then you might get some more than 7500 back.
________
Example: Depends on your tax liability...which is the tax assessed BEFORE considering any withholding or credits.
1) Say your income from everything....including, wages, interest, dividends, investments ends up with a tax liability of $20,000. The 7,500 is first applied against the 20k liability, reducing that tax to 12,500. The 17k withholding applied thus overpays by 4,500 and you get that 4500 as a refund
2) or if Say your income from everything....including, wages, interest, dividends, investments ends up with a tax liability of $16,000. then your 7,500 credit is applied to that, and reduces your tax to 8500, and your 17K withholding was too much, and you get 8,500 refund.
3) or an unlikely situation for you...based on what you've said so far: But if your tax lability from all income was 7500 or less, then the max you could get refunded would be the withholding you paid in ($17k)....because the 7500 credit is not allowed to reduce your tax liability to less than zero.
Of course, if you have kids, or energy credits to claim...those all can complicate the situation and things get to more "depends" situations.
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