Build 2023.r16.021 of TurboTax 2023 Desktop does not properly figure the Clean Vehicle Credit.
This violates the Maximum Tax Savings Guarantee.
I have tried to file a bug report but it's basically impossible to get ahold of a human who can understand anything you say here, so I'm posting this thread in the hope that someone can do something about this and escalate it to the product team for review.
I noticed that TurboTax considers last year's MAGI income regardless of the filing status... (Single, HOH, Married ...) when determining eligibility for the CVC $7500 credit in 2023. Notably, it only considers the MAGI total, and does not carry forward the context and appropriate limit when figuring the credit on form 8936, so the wizzard incorrectly states that certain people who are eligible for the $7500 tax credit are not eligible.
Example:
A given person files as 'married filing jointly' or 'head of household' in 2022, and the total income (MAGI) for 2022 is $175,000 in either hypothetical case.
This MAGI amount is lower than the MAGI limit for someone who files as married filing jointly (300,000) or head of household (225,000) but more than the limit for someone in the single filer status (150,000).
Per the IRS,
"
your modified adjusted gross income (AGI) may not exceed:
$300,000 for married couples filing jointly
$225,000 for heads of households
$150,000 for all other filers
You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your modified AGI is below the threshold in 1 of the two years, you can claim the credit.
"
Reference:
Note the key words from the IRS guidance "You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your modified AGI is below the threshold in 1 of the two years, you can claim the credit."
TurboTax does not do that calculation right now. If your filing status changes from married filing jointly or head of household in 2023, Turbo Tax improperly applies the 150,000 limit for a single filer to the MAGI of both years, even though the correct prior year MAGI threshold is 300k or 225k. It therefore incorrectly bars the single filer from claiming the 7500 clean vehicle credit if his or her income exceeds 150,000 in the current year.
(I have tested and it also has this same incorrect behavior a head of household filer in 2023 who filed as 'married filing jointly' in 2022, with an income between 225k and 300k)
Can someone please fix this? The applicable limits are clearly written on form 8936.
Thanks.
