Tax credit 2013

[Archsteve]

Hi all just bought a miev in Albuquerque for 20500 before tax credit. My search has shown that 2013 limit is 2000. Is this right? Dealer was saying 7500 could still be available. Any ideas?

 

[PV1]

As far as I know, the federal tax credit is still $7,500. Maybe he was talking about your state credit/rebate? I know Pennsylvania was $3,500, it's now $3,000, and may be gone after June 30.

 

[BillThompsonMIEV]

I am assuming you purchased this vehicle as a new (never been titled) vehicle. Go to www.irs.gov; use the search feature to find IRS Form 8936. That is the form you use to claim the credit. The maximum credit is $7,500. In order to take full advantage of the credit, you must have a tax liability (see line 46 of your 2012 Form 1040 tax return). If the number on that line is $7,500 or greater, you get the full credit. If the number is less than $7,500, you get that number as the credit. The credit is a "non-refundable" credit.

 

[Archsteve]

Yep. Brand new. I just checked the form. It says 2500 is the max now. Bummer. A bit misleading by Mitsubishi.

 

[olagon]

I am assuming you purchased this vehicle as a new (never been titled) vehicle. Go to http://www.irs.gov; use the search feature to find IRS Form 8936. That is the form you use to claim the credit. The maximum credit is $7,500. In order to take full advantage of the credit, you must have a tax liability (see line 46 of your 2012 Form 1040 tax return). If the number on that line is $7,500 or greater, you get the full credit. If the number is less than $7,500, you get that number as the credit. The credit is a "non-refundable" credit.

Huh? It's now 2500 max for all cars bought in 2013?

 

[BillThompsonMIEV]

I respectfully disagree with you. The $2,500 credit is for business use of the vehicle. Look closely at Form 8936, particularly Line 4 of the form. Then go to page 4 of the form and read the details about Line 4. The credit is $7,500.

 

[jz1]

I think there's still a $2500 tax credit for low speed electric vehicles. I can't remember what the form is, but I would guess this is what the OP is looking at. The I-MiEV qualifies for the $7500 tax credit.

 

[Archsteve]

I looked again at most recent form. Part 2 sAys 2500. I do hope I am wrong. I didn't see much to help on line 4. Would you look at it again on the IRS site and help me figure it out?! Thanks folks.

 

[olagon]

I thought Obama was looking at increasing the tax credit to $10,000 and to have it taken at point of sale? Anyone have an update on this? http://insideevs.com/2014-budget-proposal-ups-ev-credit-to-10000-point-of-sale-rebate-thru-2018/

 

[olagon]

By the way, in case anyone was wondering, you can't carry over the tax credit and if you sell your car there may be recapture rules coming that will impact you. So if you don't have enough of a tax liability, you won't get the full credit. This tax credit is also calculated last after other tax credits are applied. Some info here: http://taxes.about.com/od/deductionscredits/a/hybridtaxcredit_2.htm

 

[olagon]

I got worried with this post! I think it is still $7500. See http://www.fueleconomy.gov/feg/taxevb.shtml. Also the phase out looks good for us...though not good for Mitsubishi.

"The credit begins to phase out for vehicles at the beginning of the second calendar quarter after the manufacturer produces 200,000 eligible plug-in electric vehicles (i.e., plug-in hybrids and EVs) as counted from January 1, 2010. IRS will announce when a manufacturer exceeds this production figure and will announce the subsequent phase out schedule."

 

[Archsteve]

Okay, I found this. Now I am convinced it is 7500. So, I really got a good deal. The car was 20500, minus 7500 (which I believe I will maximize given my tax liability), makes the car 13,000. Awesome!

http://www.irs.gov/Businesses/30D.-New-Qualified-Plug-in-Electric-Drive-Motor-Vehicles-%E2%80%93-Mitsubishi-Motors-North-America,-Inc.

 

[MatimalND]

What where the specs (es/se/options) of the iMiev you bought

 

[Archsteve]

Well, funny you should ask. I bought an SE with all the standard features and a level 1 charger (Total MSRP including handling at 30,675). However, the dealer had a sticker there listing tons of optional equipment, including bluetooth, etc. That is what I based my negotiations on. I guess I should have double checked it after the test drive and I was negotiating.

They delivered the car to me today in a different city. I was a bit surprised that this car was so basic, without options. The crazy thing is, I had to negotiate down to 20,500, when they advertised 10,000 off. So, I really only got 175 plus delivery.

I called them, and they said its possible the wrong sticker was on there!!?! I know I got a good deal, but I still feel a bit cheated. I can't recommend the dealership at this point, which is really too bad.

 

[olagon]

They delivered the car to me today in a different city. I was a bit surprised that this car was so basic, without options. The crazy thing is, I had to negotiate down to 20,500, when they advertised 10,000 off. So, I really only got 175 plus delivery.

Curious. What was drive away total after all taxes and fees? In Hawaii I paid $23,500 for an out the door SE without any extras.

 

[Archsteve]

Well, they delivered it to me (250 miles). But it was 20,505 + 695.33 (tax & license) + dealer service transfer fee (297.50)=21,498.33

Of course, this is before the 7,500. Put that in there, and it brings me below 14,000.

 

[BarryP]

Question on ‘tax liability’ on line 46; I’m not recommending this to anyone--- can that tax liability be raised by taking some money out of a 401K before age 59-1/2? Since 20% Fed tax is taken plus a 10% penalty, does that mean the 30% will appear as tax liability for ‘line 46’?

Thank you,
-Barry

 

[randy3]

Question on ‘tax liability’ on line 46; I’m not recommending this to anyone--- can that tax liability be raised by taking some money out of a 401K before age 59-1/2? Since 20% Fed tax is taken plus a 10% penalty, does that mean the 30% will appear as tax liability for ‘line 46’?

Thank you,
-Barry

(disclosure: I'm not a CPA or tax attorney, but...)

You're thinking about doing what I did with my 2011 tax year. I purchased my Nissan LEAF on 02/11/2011 and installed a PV solar panel array at my home in 2011. Both of those actions gave me tax credits ($7,500 for the car and about $4,500 for the solar system). Also, I retired at 55 years old in 2011 and took out big chunk from my 403 account.

If the 2013 return is like the 2011 return, you compute your tax, then subtract your tax credit (from form 8936), then add the additional tax on the qualified retirement plan. This result is your total tax. So, tax on your withdrawal will be added before you take your EV credit. But any early withdrawal penalty will come in after the EV credit.

Lines are:
tax: line 46
EV credit: line 53
tax: line 54
additional tax on early withdrawal: line 58
total tax: line 61

BTW, the rules about the 10% early withdrawal penalty are complex and in some cases, you are not subject to it, even when you think you are. In my case, I didn't have to pay it, even though I took the withdrawal at age 55.

Hope this helps. Again, I'm not a professional and I do my own research.

 

[jlhiowa]

Hopefully someone knows the answer to this

My domestic partner qualifies for the full $7,500 federal tax credit, so want to make sure he gets it (I only qualify for $2,500, and our budget is strict). The catch is, I'm helping pay for the MiEV too. Is it okay for us both to bring a check? Or would that somehow disqualify him from the tax rebate?

I'm contacting our credit union ASAP tomorrow morning, so hopefully I can just move my money to his account so he can buy it himself. But if it doesn't work, we need to have a backup plan ready.

Also, the dealership hasn't told us what sort of financing he qualifies for yet... that would be great if he could get it all for 0% :lol:

Thanks!
Jessica

 

[Don]

I'm not a tax attorney either, but . . . . I believe so long as both of your names are on the car's title and registration, you can split up the credit any way you like - It doesn't matter at all how you actually pay for the car

I didn't qualify for the Federal $7500 rebate at all (not one penny) but my brother did. We titled and registered the car in both of our names, I paid cash for the car with a check from my credit union and when he filed his taxes, my brother got credit for buying the EV

It's really a shame this credit is yet another law enacted to benefit only the wealthier people and completely excludes average or poor people, but when you look at who is writing the laws, I guess it whouldn't come as much of a surprise. It would be nice if the law was just a $7500 federal discount taken off the price of the car at the point of sale, so it would have benefitted everyone, equally

Don