I am getting a large refund on my taxes (which has $7,500 for EV purchase), but I also installed an EV charger. After inputting the information, it shows $0 credit. Why?

[craigelrod5]

It is not showing up as a credit like the regular EV purchase is. I know I am getting a refund back, but shouldn't this bring down my taxable income more? Is it because I am doing the standard deduction and this is not in addition to that?

[KeshaH]

The credit for electric vehicle charging stations (officially called the Alternative Fuel Vehicle Refueling Property Credit) isn't refundable. It's limited to your tax liability, and it can't reduce your tax liability below zero. If your tax liability is already zero because of other credits or deductions, your EV charger credit will be $0. It's possible your electric vehicle credit already reduced your liability down to zero.

To check to see if your credit is limited by your tax liability;

1. Sign in to TurboTax and choose Pick up where you left off. 

2. On the left side panel, choose Tax Tools and then Tools. 

3. Click View Tax Summary.

4. You'll see a summary of your tax return here, to view your actual 1040, click on Preview my 1040 on the left side panel.

5. Scroll down on the Federal 1040. Line 18 will show your tax liability before any credits.

6. Line 20 shows the credits that are already flowing to your return from Schedule 3, and line 22 shows your income tax after nonrefundable credits. If this amount is zero you wouldn't qualify for any additional nonrefundable credits.

To see what credits are being reported on line 20 of your 1040, continue scrolling until you get to Schedule 3. Your charging station credit would be listed on line 6j if you qualify.

[craigelrod5]

Thank you for the information! I checked the information you gave me, and line 22 says $2,252 on it, not $0. I looked down, and the credit for the charger credit isn't showing on Schedule 3, but I should qualify. Is it for some reason not adding the credit/form in my case?? I understand what you mean if I was already reducing my tax liability to 0, but I still had a little room for the credit to apply. My total spent was $2789; I know I only get 30% of that amount. If you could help guide me some more, I'd appreciate it. Thank you.

[KeshaH]

We can look at your return and see exactly what you see to  help come to a resolution. The return will be scrubbed and won't include any of your personal details.

Once you're logged in to your account,

- on the left hand panel, click on Tax Tools and then choose Tools

- on the pop up window, select Share my file with Agent

- you'll see a message saying you'll give us a copy of your tax return. Your personal information will be changed so we can't see any private information.

- click okay and you'll get another message with a token

Reply to this message with your token and we'll take a look to see what we can find.

[craigelrod5]

Sorry for the delay getting back to you. My token number is 1267044.

I appreciate your help.

[KeshaH]

Thank you.

It seems the issue here is Tentative Minimum Tax (TMT). The TMT is a secondary tax calculation system that can limit certain tax credits, including this one. 

Your credit for the EV charger can't be more than the difference between your regular income tax and your TMT. Essentially, it can't cause your regular tax to go below your TMT. If your regular tax is already lower than your TMT, you can't claim any of the credit.

This is what's happening on your return. This is actually a common situation for many people claiming this credit. When the credit is limited due to tax liability, unfortunately the unused amount can't be carried forward.

@craigelrod5