Clean Vehicle Credit

[JimKerwood]

I'm filling out the Clean Vehicle Tax Credit.  I went from Married filing jointly in 2022 to Head of Household in 2023.  I should be under the modified AGI on my joint 2022 but I don't have the option to specify.  I could 1/2 my line 11 number but that seems like a big red flag.

[AnnetteB6]

Be sure that you have entered all of your income for your 2023 tax return.  Then, as you go through the credit section to enter the details for the Clean Vehicle Tax Credit, TurboTax will determine if your 2023 modified AGI meets the qualifications. 

If it does not, then there will be an additional screen asking you to enter your 2022 tax return information to qualify based on your prior year information.  If you do not get that additional request for information, your current year return is under the maximum limit.  

[JimKerwood]

My 2023 AGI is too high.  I do get the second page to enter my 2022 information.  My 2022 is too high as a Head of Household but not too high as married which I was in 2022.  I don't see a way in the form to say I had a different filing status in 2022.  Since I can't say I had a different filing status it says I don't qualify.

[AnnetteB6]

After researching this further using the IRS Instructions for Form 8936, there does not seem to be any guidance or provision in the instruction that allows for you to apply the limitation based on the previous year's filing status modified AGI limit.  It only allows you to use the previous year's modified AGI, but it must be under your current year's filing status limit.  

Take a look at the 2023 version of the IRS Form 8936 using the link below.  The top section labeled Part I is where it compares your current year modified AGI to your previous year modified AGI.  The lowest of these is reported on line 5.  

Then, Part II just applies the filing status limitation on the amount shown on line 5.  Applying the limitation to the previous year's filing status is not an option.  

2023 Form 8936

@JimKerwood 

[JimKerwood]

I called the IRS and the person I talked to said she thought I should be able to  get the credit.

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

Based on that link it says "If your modified AGI is below the threshold in 1 of the two years, you can claim the credit."  My AGI is below for filing status of 2022.

[Vanessa A]

Yes, that is correct information.  You can choose to use income from this year or last year, whichever one will have you qualify.  However, the Home Energy Section of TurboTax has not yet been updated, this is why you are not able to make this selection yet.  The update is expected to be released on January 31st.  Please check back after that day to finish your entries for the Clean Vehicle Credit. 

[JimKerwood]

The Jan 31 update still doesn't include the 2022 filing status.  Is there still a change coming for this Tax credit?

[DaveF1006]

Yes, the available date is extended until 2/21. Look under Form 8936.

Turbo Tax Forms Available

[JimKerwood]

Even after 2/21 it doesn't allow me to specify a different filing status.

[Cynthiad66]

The IRS made updates to Form 8911 Alternative Fuel Vehicle Refueling Property Credit. TurboTax is planning to make updates around this by 02/28/2024. Please check back then to be sure you are eligible to receive this credit.

@JimKerwood 

[liulewie]

Hi, I'm in the same situation where my 2022's filing status and MAGI would qualify but 2023's filing status and MAGI wouldn't. Is there an update for Form 8936 forth coming to address this?

[liulewie]

I've found some clarifications from IRS which states that the income level should be compared against the filing status of the corresponding year (preceding or current). 

Q1. Could my income level prevent me from taking the New Clean Vehicle Credit? (updated Oct. 6, 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 yearthat the new clean vehicle was placed in service orforthe 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 less than or equal to the threshold applicable to your filing status for in the preceding year or current year.

https://www.irs.gov/pub/taxpros/fs-2023-29.pdf#page=5

[JimKerwood]

It still isn't working for me after updating today.  

[AnnetteB6]

The issue where you can enter your 2022 income, but not your 2022 filing status in order to qualify for the energy-efficient vehicle credit on Form 8936 was submitted to the development team for modification.  

The result of their investigation into the issue was to point out that this is an unsupported calculation in the 2023 version of TurboTax.  It is not known whether this may change in future versions, but for 2023 it is unsupported.

See the following document for confirmation.  The Form 8936 situation is shown on page 16, Credits Not Covered Elsewhere item 6.  

Unsupported Calculations and Situations in the 2023 TurboTax Individual Federal Tax Software Program...

@JimKerwood 

[mstarks01]

Does this mean that those of us who find ourselves in this situation should not use TurboTax?