Does anyone know if the $7500 tax credit can be claimed more than one time? In other words my Kona is being bought back by Hyundai. If I purchase a new Ioniq 5 as a replacement can I get the $7500 credit a second time? Or is it possibly time limited, like once every 2 years or something like that?
When I read the IRS regs I believe that you must hold onto the car for more than one year, in other words, more than one tax year. Check with a professional.
You can claim a EV tax credit every year, even multiple cars.. Let's say that you buy a Kona EV for yourself and one for the wife, you can claim $15000 in tax credit.. If your tax burden for that particular year was over $15k, you will get the full tax credit on both.. I don't think that there is a limit.
I have never heard of a holding period for the federal credit. Do you have a citation for that? There is a provision for recapture if, within 3 years, "the vehicle ceases to be a qualified electric vehicle" or is disposed of and the taxpayer knows that that will happen. See here. (The buyback vehicles are labeled that they will be sold at auction, so we have reason to think they will continue to qualify.) I did have to pay back some of a California rebate about 7 years ago when I sold a plug-in before 3 years. But not the federal credit, AFAIK.
I'm in a similar boat, and already determined that I'm ineligible for the Massachusetts rebate program. But that works on a different system than the Fed -- it's an actual rebate, i.e. a mailed check. But it has a holddown period of 36 months, so won't apply to the replacement Kona. So the question is, if a car is sold as salvage for parts, does it cease to be an electric vehicle even if it's helping other ones keep going? Gotta go read the latest on form 8936... _H*
Yes! I'm in MA too and this is what tripped me up originally. I knew there was a time limit on something related to the Kona purchase. But it does seem that it's not going to affect the Federal tax credit. As much as I'd like the MA rebate I'd still prefer the Fed. credit since it's so much more. MA only gave me $1K when I purchased. I guess if I wanted to wait until August 2022 I'd be eligible for a 2nd MA rebate since it would be three years then.
Glancing at the Mass. rules, it says you can't get rid of it for 36 months, period. I suppose they mean you have to give the money back, but that's not what it says. A bit controlling, what? Strange that they don't prorate, like the feds do. The code section says that the recapture occurs if "The taxpayer receiving the credit ... sells or disposes of the vehicle and knows or has reason to know that the vehicle" becomes non-electrically powered or is used in a way that doesn't qualify for the credit, such as by a non-profit. Other than that, "a sale or other disposition (including a disposition by reason of an accident or other casualty)" does not trigger a recapture. So if the car's in an accident, and your insurance company buys it from you, and you don't know whether it's going for salvage, then you're clear. And even if you do know, it sounds like they are explicitly excluding disposition in an accident.
