Home EV Car Charger Tax Credit New Inflation Act

[janssendvm]

On the new Inflation Reduction Act, it notes that at home chargers would get an extension of the 30% up to $1000 credit (https://blog.turbotax.intuit.com/health-care/inflation-reduction-act-of-2022-52555/?cid=em_4420_NULL...).  The prior incentive/credit ended December 31, 2021.

My question is whether or not this extension of this credit starts back up now since the bill is passed, or if it starts on any installation after January 1, 2023?  Thanks!

[Bsch4477]

The rules take effect on January 1, 2023. 

[janssendvm]

Thanks!  Will there be the 150% of the median area income cap that pertains to this credit?

[Bsch4477]

Beginning in 2023, you can only qualify for the new or used EV tax credits if you make no more than $150,000 a year — or $300,000 if you file jointly with a partner.

[janssendvm]

I am aware of the car credit income limits, but what about installation of car charger?

Credit for Electric Chargers Installed at Your Home or Business

Prior to the Inflation Reduction Act a tax credit was available for electric charging stations put in place by businesses and main homes prior to January 1, 2022.  The new law extends the credit for charging stations put in service before January 1, 2033.

[NCperson]

@Bsch4477 - the income requirement is based on CURRENT YEAR and PRIOR YEAR MAGI....so the way I read this, if both years exceed $150,000 (single), you are ineligble for the credit but if you are above $150,000 in the current year but below $150,000 in the prior year (or vice-versa), you would still qualify since the lesser of the two is below the threshhold. 

page 391: 

(10) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME.—

“(A) IN GENERAL.—No credit shall be allowed under subsection (a) for any taxable year if—

“(i) the lesser of—

“(I) the modified adjusted gross income of the taxpayer for such taxable year, or

“(II) the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds

“(ii) the threshold amount.

“(B) THRESHOLD AMOUNT.—For purposes of subparagraph (A)(ii), the threshold amount shall be—

“(i) in the case of a joint return or a surviving spouse (as defined in section 2(a)), $300,000,

“(ii) in the case of a head of household (as defined in section 2(b)), $225,000, and

“(iii) in the case of a taxpayer not described in clause (i) or (ii), $150,000.

[Bsch4477]

@NCperson Does that limitation also apply to the installation of an EV charging station?  I can’t find anything definitive on that point which is what the OP is concerned about. 

[NCperson]

@Bsch4477 - i do not thing so .  Here is why.... those MAGI limitations relate to 'subsection a' which begin on Page 381.  Subsection a is all about the vehicle - manufacturung content of the battery, manufacturing in North America, MSRP limit, income limits, etc.   It doesn't state the limits relate to any other parts of the Act - it just relates to subsection a.....

however, the credit the OP is asking about is a non-refundable credit, so it can't reduce Line 22 below zero, so it could be limited based on other factors of the OP's taxable income and hence the OP's tax liability.  (and in the 2022 draft of form 1040, Line 22 remains the same as in the 2021 version of Form 1040)

page 391: 

LIMITATION BASED ON MODIFIED AD7
JUSTED GROSS INCOME.—
8 ‘‘(A) IN GENERAL.—No credit shall be al9
lowed under subsection (a) for any taxable year
10 if—

so