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Fiscal cliff and the 7500 tax rebate: Will it be on the chopping block?

I'm just wondering about thoughts on the $7500 tax rebate in light of the "fiscal cliff" we keep hearing about. Bets on its survival?
I have my "paperwork" but with too many unknowns, I have big doubts and won't sign. It seems too many questions are going unanswered. (I don't expect Tesla to have the answer on the tax rebate.) I have not even been assigned a person to help me. No person has contacted me or made any effort to talk with me. I had called with questions and the person was going to be getting "right back to me." That was probably two months ago now. The car is hugely expensive; now if it's going to cost another $7500, I'm thinking I might just have to wait for the mid-priced car with more advanced battery function and more accessible service and charging. EVERYTHING just is starting to feel so out of reach/out of control with the half-assed way some things are being handled. The lack of answers is what is pushing me away. Tesla needs to realize that people will adjust to whatever the answer will be, but their "limbo" tactic is not something that I have patience for when I am to fork over $90 grand...or will it be 97,500? I had real hope that when the bulletin board went up, we might actually get definitive answers to questions...the only problem with that is that they are choosing not to answer certain questions. That's fine. I can choose not to buy their car.

@runs

Lots of ways to do it. Be retired but invested in tax exempt bonds. Have lots of income in 2012, but expect a loss in 2013. Have great wealth but no income. Make a lot of bad investments. Be in the 47% (many of them Romney's friends) who don't pay taxes.

For those who aren't eligible for the tax credit, I've seen elsewhere (perhaps here or on the TMC forums) the idea of doing a Roth IRA conversion. Basically, take the money in your conventional IRA (where you pay the tax when you withdraw), move the money over to a Roth IRA (where you pay the tax up front) and take the credit on the liability that this introduces.

I did not see a definitive answer on whether the EV tax credit could be affected by the 'fiscal cliff' so I did a little research and the answer is that refundable income tax credits are exempt from sequestration, so it isn't subject to an automatic cut.

I didn't spot it in the text of the act, but there's a Congressional Research Service report on special rules and exemptions for members of Congress. Pages 6 and 18 list individual income tax credits as exempt.

So, unless Congress actually does something, the tax credit is going to be applicable in 2013 and beyond. It is possible that this credit could be negotiated away as part of a deal, if Congress were to pass a budget in 2013, but that's true of any tax credit.

Nick,

Thank you for reporting on your research. Your observations offer me some solace. Now I will hope that the credit doesn't get negotiated away.

I have seen several mentions that this $7500 credit might be changed to a $10000 credit, or even an immediate 'rebate' taken off the purchase price of the EV. Can anyone shed some light on this? Thanks!!

Would apply to only cars with MSRP <=$45K. Not relevant to Tesla (yet).

typo: 'only to cars'

I suspect the thinking is to encourage the production of "affordable" EVs. Like the GenIII!

What about the immediate price reduction?

I actually called the FEDS two weeks ago and spoke to a nice lady who was actually looking into getting herself a Tesla....regarding the tax credit, it is not changing unless there is something already in the works to cancel it and there is not...so no matter what happens in the next few weeks the $7500 tax credit will still be intact. And no it's not going to $10K....I wish but no.

Last year I owed a little over $5K in taxes, so starting 1/1/13 I have lowered my 401K amount that is taken out of my check, I am only doing this for 2013 so I can get a better benefit for the tax credit. I am keeping my fingers crossed it works lmao. If not then I will not get the full benefit of the tax credit.

I repeat, the $10K is not intended to increase the $7.5K appolicable to cars worth over $45K. To be quite clear, a $57.5K Tesla would net out at $50K, a $40K Leaf would net out at $30K.

typo: applicable

Happy New Year to all... Just wanted to leave a quick note on the forum and let everyone know that late last night the House finally voted on the American Tax Payer Relief Act. As a result the $7500 Credit for alternative fuel vehicle refueling property (Sec. 30C) was extended into 2013. Yay!!!!!

Just a note of clarification. I believe the $7500 credit did not need to be extended, it just wasn't eliminated with the new bill. The credit for refueling property refers to (in our case) charging equipment installed at your main residence or business and it is 30% of the cost up to a max $1000 credit in the case of your home. There was also an extension of a tax credit for 2 or 3 wheel vehicles in the new bill.

So I'm pretty sure that means if you buy a HPWC and install a new circuit in your home, you could claim 30% of the cost as a tax credit.

Does anyone know if a NEMA 14-50 outlet counts towards the refueling credit? I know it does for my local utility's rebate program...

@riceuguy - IANA(tax)L, but my understanding is if it is dedicated to only an EV, yes.

@Jat, Thanks, I'll definitely look into it. If the city covers half the cost (already got that in writing!) and I can get 30% back as a tax credit (wonder if that's 30% before or after rebate?!), it's a pretty sweet deal!

riceuguy, just to be clear... A credit applies against your total tax liability. If you mean that you don't have to owe extra in April because of underpayment that's different, you are right there.

So if your total tax liability (forget refunds and all that) is >$7500 you can enjoy the credit. If it is less, you will only get credit up to total tax liability.

So, if you paid $6000 in the year in tax, and your 1040 says you owe exactly $6000 (before the credit) so normally you would get no refund, the credit would get that $6000 back... no more.


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