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Tesla Getting to Know Tax Rebate Procedure

Hello,

 

I purchased a Tesla Model Y (~$51,400) at the end of May 2023 in Pennsylvania. I will be filing married filing jointly for 2023 and will be taking standard deductions, but the car is only registered under my name (not sure if this piece of info is relevant here). What is the process of claiming the $7,500 tax rebate/credit at the state and federal levels? 

4 Replies
Faith C
Expert Alumni

Tesla Getting to Know Tax Rebate Procedure

Hi dggrlrch,

Thank you for asking and congratulations on getting married!!! Regarding to the EV credits, you will still be able to claim the credit if your modified AGI must be less than $300,000 or $150,000 if single. According to IRS, "only one taxpayer can claim the new clean vehicle credit per vehicle placed in service, and the credit may not be allocated or prorated between multiple taxpayers. In the case of married taxpayers filing jointly, either spouse may be identified as the owner claiming the new clean vehicle credit."

 

When you purchase a qualified electric vehicle, you want to make sure to get a letter of certification from dealership regarding the make, model and tax year it qualifies for EV credit so it can be forwarded to IRS. Then, file tax form 8936 with your individual tax return to claim the credit. 

 

We hope the above information helps. Please feel free to contact us if you have any further questions. We appreciate your continuous support to TurboTax!

 

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KatherineS63
Employee Tax Expert

Tesla Getting to Know Tax Rebate Procedure

I am not sure I am understanding your question???

The purpose of claiming the credit is that you will get a credit off of your tax of up to $7500 if you qualify.

The EV credit is non refundable.  This means that when you enter in your income and get down to Taxable Income, you will only receive a credit up to the amount of tax that is calculated off of the Taxable income. 

So for example, pull up your 2022 tax return.  Look at line 15.  That is your taxable income.  Now look at Line 16.  That is tax on the income.  If your tax is $0 then you would not be able to recevied a NON REFUNDABLE credit. 

If you tax is $1000 then you most likely would only receive $1000 of the $7500.  

If you look at the IRS.gov website it will give you all the information about this credit.  One part I see is this:

"The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years."

I suggest that you look at this link:   https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

It spells out all of the limits.   Please reply if I did not answer your question fully.

If you still purchase an EV, I hope you enjoy it!  I love mine!!  We traveled out east and had a blast!!

KatherineS63
Andrew_W
Employee Tax Expert

Tesla Getting to Know Tax Rebate Procedure

Hi @dggrlrch!

 

On the federal level, the $7,500 New Clean Vehicle Credit is claimed on form 8936, which will be part of your 2023 tax return. The credit reduces your overall tax liability, which will either increase any refund or offset balances due, based on other tax withholdings and credits you may have.

 

Pennsylvania does have a rebate program, but unfortunately the purchase price limit is $50,000 or less. More details are here: Pennsylvania Alternative Fuel Vehicle Rebates for Consumers 

 

Hope you are enjoying your new Tesla!

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KathrynD1
Employee Tax Expert

Tesla Getting to Know Tax Rebate Procedure

For information on PA tax credit, please see:

https://www.dep.pa.gov/Citizens/GrantsLoansRebates/Alternative-Fuels-Incentive-Grant/pages/alternati...

I hope you find this answer helpful!
KathrynD

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