EV Tax credit 2023 - Married Filing Separately

[fskang86]

Hello,

For the EV tax credit of $7,500, based on the rules below, if my AGI is $250,000, and my spouse's AGI is $100,000, can my spouse buy the EV and take the credit while we file tax as married separately or does it NOT work due to my AGI? 

In addition, your modified adjusted gross income (AGI) may not exceed:

• $300,000 for married couples filing jointly 
• $225,000 for heads of households
• $150,000 for all other filers

[Affordabletaxes2021]

Remember: The credit is applied to your tax liability. It is not carried over. So you’d need a tax liability of at least 7500 to take advantage of full credit .In addition MFS (married filing separately isn’t eligible for a lot of credits like EIC so you need to consider these things as well.

[Vanessa A]

Yes, your wife can buy the EV and take the credit if you are married filing separately as long as her income is below $150,000.

If your primary purpose for buying an EV is for the tax credit, or if the credit is a large factor in your purchase, be aware that the credits are phasing out for a variety of vehicles.  Tesla, for instance is no longer eligible for this credit.  

[Rhinestones78]

Hello , why Tesla does not qualify for the $7500 credit? If their EVs price are below $55k they do qualify right?

[DoninGA]

For tax year 2022 the Tesla vehicles acquired after 12/31/2019 are not eligible for these tax credits since the manufacturer sales cap has been met.

[sajjarahita]

With recent price cuts, Tesla is eligible for Tax credit.

[DoninGA]

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@sajjarahita wrote:

With recent price cuts, Tesla is eligible for Tax credit.

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Not for tax year 2022.  

See this website for vehicle eligibility - https://www.fueleconomy.gov/feg/taxevb.shtml

[Walch1102]

Can we have both our names on the title, file separately, and have the lower income spouse under $150K AGI claim the credit? Or can only the spouse claiming the credit be on the title?

[SantinoD]

Yes, If both names are on the title and you are filing Married filing separately, either spouse can take the EV tax credit on their own tax return. 

@Walch1102

[jchen57]

What about a situation where a sibling is helping someone purchase a vehicle? In this case:

• Both siblings names are on the title
• First sibling is single and eligible for the credit
• Second sibling is married/filing joint and is not eligible due to income

Would the first sibling still be able to claim the credit?

Thanks!

[ZhuoliA]

Yes, the first sibling can claim the credit because the name is on the title and the second sibling will not claim the credit due to ineligibility. 

@jchen57

[jchen57]

Great, thank you very much for confirming @ZhuoliA!

[RedYar]

Does this matter who requests financing on an EV? Should it be my wife or Joint Application is okay? Thank you 

[HopeS]

Since you both are on the title either one of you can take the EV credit as long as your Adjusted Gross Income (AGI) does not exceed $150,000 since you are filing married filing separately.

You will need to confirm with your bank how you should go about financing the EV. They will be better able to answer your financing question.

@RedYar

[ranger6]

Hi,

For a couple married this year and filing jointly with both of our names on the EV title/registration, we can use our 2022 or 2023 combined AGI to claim the $7500 tax credit based on my understanding. If our 2023 combined AGI is over 300k, can we show our combined 2022 AGI even though we are married in 2023?

I see another option is to use married filing separately so one of us with AGI < 150k can file for the credit as we both have our names on the title.

Thanks