I just saw my tax return and form 8834 & 8936 tax credit forms clearly displays the max credit is $2,500? Any idea why Tesla is promoting $7,500?
One of the exceptions is the person with lots of wealth, but not lots of taxable income (e.g., invested in tax-exempt securities).
I believe Elon's paycheck from Tesla is under 50k... stock options on the other hand...
I'm not sure the old rules of thumb are going to apply to Tesla.
Does anyone know if the 200,000 limit for each manufacturer before the credits start phasing out is the total cars from the manufacturer or the number for each type (e.g., Roadster vs. Model S)? Unfortunately I'm inclined to interpret the former when reading the tax code online because it would be a shame for the Roadster purchases to count against the total for those of us waiting to buy our Model S.
Jeffrey, since Tesla is only at 14,000 cars so far (< 17,000 with Roadsters included), I think you're ok!
It's per model, not manufacturer. Otherwise, the Nissan Leaf wouldn't qualify.
@M & C,
The credit is for EVs. Nissan has produced a relatively small fraction of 200k EVs so far.
@ David70 Good point. I checked the IRS website which didn't clarify the original question one bit but did find this: "The credit for vehicles with at least four wheels is subject to a phaseout (reduction) once the vehicle manufacturer (or, for a foreign manufacturer, its U.S. distributor) sells 200,000 of these vehicles to a retailer for use in the United States after 2009." Lol :) Since Tesla doesn't sell to a retailer, does this mean the credit will never phaseout?
And how steep is the phaseout? Instant, or gradual?
The phaseout is gradual. Here's what the IRS has to say on a different page w/slightly different wording:
"Qualified Plug-In Electric Drive Motor Vehicle Credit (IRC 30D) Phase Out The qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009) (“phase-out period”). Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit if acquired in the first two quarters of the phase-out period and 25 percent of the credit if acquired in the third or fourth quarter of the phase-out period. Vehicles manufactured by that manufacturer are not eligible for a credit if acquired after the phase-out period."
This makes it sound like the credit is by manufacturer, not vehicle model. They also have a link to "Quarterly Sales by Manufacturer" that includes cumulative sales to date. The table lists Ford & Nissan sales, but no Tesla info????
Ford 9,207 (includes 2012, 2013 Ford Focus Electric, 2013 Ford Fusion Energi, 2013 C-MAX Energi)
Nissan 16,803 (includes 2011, 2012 Nissan Leaf)
No matter how you count the beans, it's going to be a while before a phaseout begins for a Tesla vehicle.
Elon has suggested the credits will be used up by the time the GenIII comes out. Total S & X sales over the next ~4 years =>200K.
Anyone know if the credit is reduced by AMT? I've lost kiddie credits and all kinds of other deductions due to the AMT...
In the same host, AMT-wise. Seeing as it is a credit and not a deduction, I would think its AMT-proof (disclaimer: not a tax expert).
Me neither, but I think the AMT determines the tax you pay (not owe) - then you deduct the $7500
It's not reduced by the AMT.
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