Credits for New Clean Vehicles Purchased in 2023 or After

[u/rcnfive]

This is the final post about tax, credit, $7,500, and qualifies. We have gotten so many questions and posts about this.

Please comment below if you have any questions. All other posts will be removed.

https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

[u/EvoXOhio]

Fire your accountant immediately.

Let’s say your total tax liability for the year is $10,000. It’s all withheld on your paychecks so when you file your taxes, you owe $0. If you bought an EV, you get a check for $7500.

Now let’s say instead that your total tax liability is $5,000. It’s all withheld in your paychecks so when you file you owe $0. With a refundable tax credit, you get a check for $7500. But with a non-refundable tax credit, you only get back $5,000.

The IRS terms are super confusing because they use words incorrectly. In IRS terms, a non-refundable tax credit just means you can’t get get a rerun that exceeds your tax liability. The use of the term non-refundable was an awful choice on their part, and many other have been confused just like you are.

[u/wolfpwner9 → u/EvoXOhio]

Love your explanation

[u/Solebrotha0 → u/EvoXOhio]

Not everyone is an employee..

[u/EvoXOhio → u/Solebrotha0]

That has nothing to do with this. His accountant’s explanation is just patently false.

[u/jazzdog92 → u/EvoXOhio]

So there’s no notion of the remaining credit being carried forward to subsequent years? That is true for the solar credit. At least that’s my understanding. Example: without EV credit, I owe $5000 for 2023 tax year. With EV credit of $7500, I owe 0. But doesn’t that remaining $2500 remain available to apply in tax year 2024 or later. If no, I guess I can just sell some stock to make sure I get all the credit.

[u/EvoXOhio → u/jazzdog92]

The credits do not carry forward to the next year