How does the EV tax credit work for cars purchased after Jan 1 2023? Do I just need to have a tax liability, or do I need to have a balance due of 7500 to get the credit?

mmichelletanner- · ‎February 1, 2023

I owe > $7500 in federal taxes. I also prepay my taxes every year. Most years I receive a refund from the government because I've overpaid in taxes. In this situation, would I receive the $7500 EV tax credit? Or do I need to withhold extra money, to ensure that I still have a balance due when it comes time to do my 2023 taxes?

Vanessa A · ‎February 1, 2023

Yes, you would still receive the rebate. The credit reduces your tax liability not your tax due. So if you had a tax liability before the credit of $10,000 and you paid in that $10,000 during the year, you would get a refund of $7,500.

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Vanessa A · ‎February 1, 2023

Yes, you would still receive the rebate. The credit reduces your tax liability not your tax due. So if you had a tax liability before the credit of $10,000 and you paid in that $10,000 during the year, you would get a refund of $7,500.

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Mike9241 · ‎February 1, 2023

it's a lot more complicated than just having a tax liability of $7500 before the credit. there are complex rules on what vehicles and taxpayers qualify. you might want to read this if you have not already purchased the vehicle

https://abcnews.go.com/Business/wireStory/explainer-2023-tax-credits-evs-boost-appeal-95933640#:~:te...

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How does the EV tax credit work for cars purchased after Jan 1 2023? Do I just need to have a tax liability, or do I need to have a balance due of 7500 to get the credit?