EV Tax Credit vs AMT Tax Credit

[dcortez]

My EV tax credit of $7500 is disallowed apparently due the fact that I am getting AMT tax credit (8801). It will take years to use up my past AMT payments. So this means I will never be able to use EV credit. Can this be true? Why do they punish a taxpayer for buying and EV and then denying the EV credit?

[JohnW152]

That's how the law was written.

According to Line 20 in the Instructions for Form 8801, you must

Enter any qualified electric vehicle credit not allowed for 2019 solely because of the limitation under section 30(b)(3)(B) (as in effect prior to the amendment of section 30 by Public Law 111-5, the American Recovery and Reinvestment Tax Act of 2009).

You can see in Part II of Form 8801 how the carryforward computation is made.

Unless the law is changed, the same will be true for tax year 2021 and subsequent.

[dcortez]

First person who could answer this. Sadly, the amt tax credit is adjusted downward if I claim the EV tax credit. It appears the 8801 tax credit is reduced for the year I claim EV credit, and the amount carried forward is higher by the amount of the EV credit.  In my case the amount of the carry forward AMT credit is very high. So it appears, I will not live long enough to ever get my EV credit.  

If the USA really want to incentivize EVs, then line 20 should be repealed.  Doubt that will happen. 

[imxep]

I'm in the same situation. Very unfair.

[dcortez]

This post was from 3 yrs ago. Since then I discovered that my past AMT payments were mistakenly computed in my TT file history. I have corrected it.  So I am elegible for a EV credit. Under the 2023 new law, I still have to qualify for the credit. These means I must by only an EV assembled in the USA AND my AGI must be below the maximum allowed by law 

I stand by my original statement that EV credits should be available to all that buy one.  If our policy is to reduce GHG emissions by using and EV then why should we discourage anyone from buying one?