How much my salary should be to get full $7500 electric car tax credit. I file married and have 2 dependent.

[nareshanupam]

How much my salary should be to get full $7500 electric car tax credit. I file married and have 2 dependent. I am planing to but Pacifica but I want to make sure I will get full benefit of $7500 

[SweetieJean]

Your state may have something as well.

[SteamTrain · Accepted solution]

For 2018 taxes

1) Assuming your 2 dependents qualify you for the full child tax credits:

2)  Assuming you are using just the new  24,000 standard Deduction (not itemizing)

3) Assuming both parents have only W-2 income, (no self-employment income)

Total W-2 salary for both parents + interest, no capital gains to declare:

~$60,000  or less = no taxes...cannot use the $7,500 credit

~80,000 = ~$2,300 taxes to use against the $7,500 credit

~100,000 = ~$4,700 taxes to use against the $7,500 credit

~113,000 = ~$7,500 taxes to use against the $7,500 credit

[SweetieJean]

CORRECTED:

Adjusted gross income = $113,000
Standard/Itemized deductions  - $24,000
Taxable income = $89,000
Child Tax credits = $4,000
Estimated tax liability = $7,459

[SteamTrain]

I get $4000 credit for the children  if they qualify for 2018...

[SweetieJean]

<a rel="nofollow" target="_blank" href="https://fa.morganstanley.com/thelicatagroup/mediahandler/media/117520/2018_Tax_Tables.pdf">https://f...>

[SweetieJean]

@SteamTrain  You are correct. The tool I used was wrong!

[nareshanupam]

Yes I qualify for $4000 child credit. So the cutoff is ard $113000 to get full $7500?

[SteamTrain]

Given the rough assumptions I've made above...along with all being US citizens .

[SteamTrain]

If your total income will be too low, it is an opportunity to convert any traditional IRA you own to a ROTH IRA to increase your taxable income amount.....but it gets messy if your traditional IRA contains some non-deductible basis from prior year contributions.

[SweetieJean]

@nareshanupam  Will you also be eligible for the Child and Dependent Care credit? If so, that must be factored in.

[nareshanupam]

@SweetieJean I don’t use Child and Depend Care credit.

[nareshanupam]

@SteamTrain I am confused about your ROTH IRA comment. I have a regular IRA account but I am not planning to take any money out of it. How can it help me to transfer that to ROTH IRA?

I invest only $100 in that account

[SweetieJean]

A conversion to a Roth IRA is taxable income. How much is in the account now?

[nareshanupam]

$4700