Trying to understand the EV tax credit, please help.

[tan_zhif]

Hi all,

I am considering buying a Tesla model 3 and I hope that my understanding of the EV tax credit is correct:

The EV tax credit is applied on the tax owed (line number 24 on the 1040 form in 2022). So let's assume that in 2023 that number is $10000. So this brings the total tax down to $2500. And I've already paid $10000 through my paychecks (withholding). So in the end I will get a $7500 refund from IRS (subtracting $2500 from $10000).

So as long as my tax is more than $7500 and I've already paid same amount of tax for the year, I should get the whole $7500 back.

Thank you!

[NCperson]

with a tiny correction, your understanding is correct. 

the line to focus on is line 22 (not line 24).  So as long as Line 22 is more than $7500 (before applying the credit), you'll get the whole credit back.  Your math is correct. 

Unlike the solar credit, the EV credit is 'one and done'.  If you can't use it in the year you purchased the vehicle, you can't roll over the remaining credit to a future year.