Why am I not able to claim the entire credit for my electric vehicle purchase? The IRS lists the credit for my vehicle as $1,875, but Turbo Tax says I can only claim $469

[KarenM90]

The Federal Electric Vehicle Tax Credit is non-refundable.  That means that it will only generate a credit to the extent of your tax liability.  So if your Federal tax owed is $469, then you will only get a credit of $469, there is no additional refund that will be generated as the result of the credit.

Please take a look at your Tax Summary to see what your Tax Liability was before the credit.  To View Your Tax Summary:  

Choose Tools/Tax Tools/View Tax Summary.  See this link for more details:  View my Tax Summary before Filing  (The State Tax Summary will be just above the Federal Tax Summary in the black menu also)

Please note that some states also have credits that may be different from the Federal Tax Credit for Fuel Efficient and/or Electric Vehicles.

[guysosteele]

Hi @karen, thanks for your reply. I'm not sure this explains my situation.

Per the return generated by TurboTax, I have a federal tax liability of $6,863 (line 12a). I receive a $4,000 child tax credit, and am claiming an $1,875 credit for my Chevy Bolt purchased in 2019 (per the IRS table), totaling $5,875 in credits (line 13b). I therefore have $988 remaining in federal tax owed (before self employment tax) after the full $1,875 is credited. Should I not be able to claim the entire amount of the electric vehicle credit? Turbo tax is currently saying I can only claim $469 of the $1,875 credit.

I note that $469 is an even 25% of $1,875, and that $1,875 itself is 25% of the maximum tax credit of $7,500... does that signal something, or just a coincidence?  

Thoughts?

[KathrynG3]

I recommend deleting the form and re-adding it to property receive the $1,875 credit.

To delete a form:

• From the left menu, select Tax Tools
• Tools
• Delete a form
• Scroll to Form 8936 and delete.
• Follow through the rest of the prompts and click Done.

To re-add a form:

• From the left menu, select Federal
• Deductions & Credits
• See All Tax Breaks, scroll down to Cars and Other Things You Own and select Show More
• Energy-Efficient Vehicles click Start
• Re-enter your details for the Chevrolet Bolt

Additional resources regarding Electcrical Vehicles:

Yes, as you noted, the Chevrolet Bolt credit is $1,875 per the IRS Electric Drive Motor Vehicle Credit Index of Manufacturers.

IRS Notice 2009-89

IRC 26 U.S. Code Section 30D New Qualified Plug-In Electric Drive Motor Vehicles

[guysosteele]

Thanks @KathrynG3! I successfully deleted and replaced the form, and was able to refile with the correct amount. I appreciate your help!

[KathrynG3]

You're welcome!

[larry871]

This post was helpful - but the form 8936 is saying there is a "phase-out percentage" in line 4.b., allowing only a 25% credit.  

That's not what i was expecting - do you know if this is accurate?

[VictoriaD75]

Be sure that you do not change the maximum credit amount shown on the screen, otherwise the calculation will not be correct.  

TurboTax will calculate your maximum credit based on the details entered for your vehicle and any applicable phase-out based on the purchase date. 

On the screen where it shows the amount of credit you qualify to receive, the box at the bottom of the page is showing the maximum credit that would have been allowed for your vehicle had a phase-out not applied.  Your credit may be limited by the phase-out.  If you change the number on that screen, your credit will not be calculated correctly.  

The information on the screen says this field is for adjusting the amount of maximum credit it is does not match the manufacturer's specification.  The number entered here will be the maximum credit that you may receive prior to any limitation being applied.  If you change it, your credit will be based on the number entered.  

[larry871]

I guess no one mentioned the phase out when i bought the car!

Thanks

[malla]

Hi,

I am trying to figure out why I am not getting the full credit for the electric vehicle I bought in 2020.  It is an Audi E-Tron and according to all publications and turbo tax, I should be getting $7,500.  Turbo Tax is only giving me an $800 credit.  My 1040 shows I paid well over $100K in taxes and with very few credits.  I deleted the form and tried again and it still is showing an $800 tax credit.  My refund is only going up by $800 when it should be going up by $7,500.  Your help will be greatly appreciated.

[DoninGA]

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@malla wrote:

Hi,

I am trying to figure out why I am not getting the full credit for the electric vehicle I bought in 2020.  It is an Audi E-Tron and according to all publications and turbo tax, I should be getting $7,500.  Turbo Tax is only giving me an $800 credit.  My 1040 shows I paid well over $100K in taxes and with very few credits.  I deleted the form and tried again and it still is showing an $800 tax credit.  My refund is only going up by $800 when it should be going up by $7,500.  Your help will be greatly appreciated.

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If the credit reduces your tax liability to 0 (zero) then the remaining credit is not used and is not carried forward to the next tax year.

[malla]

Thank You, but I am still a little confused.  My tax withholdings, from my employer, are 115K and I overpaid my taxes by 33k.  If withholdings are considered a liability than I have a tax liability of 82K (115k – 33K = 82K).  I do not have any other credits. If my liability is 82K than shouldn’t my refund go up by $7500?

[DoninGA]

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@malla wrote:

Thank You, but I am still a little confused.  My tax withholdings, from my employer, are 115K and I overpaid my taxes by 33k.  If withholdings are considered a liability than I have a tax liability of 82K (115k – 33K = 82K).  I do not have any other credits. If my liability is 82K than shouldn’t my refund go up by $7500?

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Look at the 2020 Form 1040 Line 18.  That is your tax liability before any tax credits.

[malla]

Hi,

Line 18 shows 90K.