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bbq2
Level 2

EV tax credit for retiree

Does it make any difference if I only receive social security and dividend and interest income to qualify for an EV tax credit?  I plan to purchase in first quarter 2024.

1 Best answer

Accepted Solutions
KatherineS63
Employee Tax Expert

EV tax credit for retiree

The EV tax credit is a Non Refundable credit.  This means: The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years.

I suggest that you look at your 2022 tax return to see if you will get a credit.

Look at line 15.  That is your taxable income.  A lot of times when someone just has Social Security, then they do not have any taxable income.    

Look at line 16, this is your tax on any taxable income.  If there is some tax, then you might get part or all of the $7500 credit.  For example, if you tax is $1000, then your credit might be $1000 of the $7500.  I say might because there could be other credits that lower your tax too.  Again, I would look at your tax return for 2022 to see if your tax on line 16 was lowered in any way.

https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

This link will take you to all of the information and limits of the EV credit.  If you are buying an EV in 2024, remember that the credit could change again.  Check back to the IRS.gov web page to see any changes.

If you end up buying an EV, I hope you love it as much as I love mine!!!

KatherineS63

View solution in original post

2 Replies
KatherineS63
Employee Tax Expert

EV tax credit for retiree

The EV tax credit is a Non Refundable credit.  This means: The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years.

I suggest that you look at your 2022 tax return to see if you will get a credit.

Look at line 15.  That is your taxable income.  A lot of times when someone just has Social Security, then they do not have any taxable income.    

Look at line 16, this is your tax on any taxable income.  If there is some tax, then you might get part or all of the $7500 credit.  For example, if you tax is $1000, then your credit might be $1000 of the $7500.  I say might because there could be other credits that lower your tax too.  Again, I would look at your tax return for 2022 to see if your tax on line 16 was lowered in any way.

https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

This link will take you to all of the information and limits of the EV credit.  If you are buying an EV in 2024, remember that the credit could change again.  Check back to the IRS.gov web page to see any changes.

If you end up buying an EV, I hope you love it as much as I love mine!!!

KatherineS63
KochuK
Employee Tax Expert

EV tax credit for retiree

Hi kc-bbq,

In general, it does not matter where is your income source as long as you have tax liability, for example, tax year 2022 form 1040, line 22, for qualified EV credit to offset to zero. Unused EV credit is lost and cannot carry forwards.

 

Quote

Starting in 2024, the Inflation Reduction Act establishes a mechanism that will
allow car buyers to transfer the credit to dealers at the point of sale so that it can directly reduce the
purchase price.

Unquote

https://home.treasury.gov/system/files/136/EV-Tax-Credit-FAQs.pdf 

However, under recapture rules, if the credit is transferred to the dealer, and the taxpayer's Adjusted Gross Income exceeds the limitation amounts, the taxpayer must pay back the benefit he or she received from the dealer by increasing his or her tax liability accordingly.

 

Please income limits per below links.

Credits for New Clean Vehicles Purchased in 2023 or After

https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

 

Hope this helps. Thank you.

Kochu Kitty

 

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