EV Tax Credit

[Jeffrey23]

I would just like to confirm I will be eligible for the EV tax credit:

I plan on buying a qualifying Tesla this year.  My understanding is that the income cap is based on the lower of my AGI in the year I received the car or the year prior.  So, if I take delivery this year and AGI was less than $150k in 2022 but more than $150k in 2023, I will be eligible based on my 2022 AGI?

Also, I assume I will be able to claim this credit based on my 2022 income when I do my 2023 taxes on Turbo Tax (i.e, Turbo Tax will direct me to the appropriate form, etc.). 

[Holly W1 · Accepted solution]

Hello Jeffrey23,

We're so happy you joined us today!  You are correct.   According the IRS, For single tax payers, your modified income cannot exceed 150k for 2023.  You can use your 2022 Modified AGI to qualify for the credit. Keep in mind that it is a non-refundable credit, so you the credit is only good up to your tax liability.  https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after 

TurboTax will ask you questions about your purchase for the credit.  You can find it in the Deductions and Credits Section, and the wording for 2022 is Cars and Other Things You Own.  I assume it will be the same for 2023.  We also have expert ready to answer any questions you might have while preparing your return.

Feel free to respond if you have further questions and thank you for joining our live event today!

[rschule1]

Hi There 

Here is a link for Clean Vehicles information from the IRS. Please open fact sheet at beginning of the document for .pdf

2023 EV Credits

Topic B. in above fact sheet gives clear choice between the year the vehicle was purchased or the preceding year.

Topic B: Income and Price Limitations for the New Clean Vehicle Credit

Q1. Could my income level prevent me from taking the new clean vehicle credit? (updated March 31, 2023)

A1. Yes. You may not claim the credit if your modified adjusted gross income (AGI) exceeds certain thresholds. This limitation is based on the lesser of your modified AGI for the year that the new clean vehicle was placed in service or for the preceding year. The relevant modified AGI thresholds are as follows:

• Married filing jointly or filing as a qualifying surviving spouse or a qualifying widow(er) - $300,000
• Head of household - $225,000
• All other taxpayers - $150,000

[Jeffrey23]

Just to be clear, my AGI can exceed $150k in 2023 as long as it is less than $150k in 2022, correct? That is essentially my situation, so just want to be super clear on it as the tax credit is a major factor in my decision to buy an EV. 

Thanks! 🙂 

[Holly W1]

Hello @Jeffrey23 

Yes, that is an option, to choose between the 2 years per the IRS. I definitely understand wanting to be sure though.  But just for confirmation, I obtained this from an IRS Fact Sheet:  https://www.irs.gov/pub/taxpros/fs-2023-08.pdf   Topic B, page 4.

Q1. Could my income level prevent me from taking the new clean vehicle credit? (updated March 31, 2023)
A1. Yes. You may not claim the credit if your modified adjusted gross income (AGI) exceeds certain thresholds. This limitation is based
on the lesser of your modified AGI for the year that the new clean vehicle was placed in service or for the preceding year. The relevant
modified AGI thresholds are as follows:
• Married filing jointly or filing as a qualifying surviving spouse or a qualifying widow(er) - $300,000
• Head of household - $225,000
• All other taxpayers - $150,000
Your modified AGI is the amount from line 11 of your Form 1040 plus:
• Any amount on line 45 or line 50 of Form 2555, Foreign Earned Income.
• Any amount excluded from gross income because it was received from sources in Puerto Rico or American Samoa.
If your filing status changes between the preceding year and the current year, you may claim the new clean vehicle credit if your modified AGI is at or
below the threshold in the preceding year or current year based on applicable filing status for that year.

I hope you enjoy your new car 🙂

[Jeffrey23]

Yay! Thank you 🙂