Claining the full $7,500 federal tax credit

Discussion in 'Clarity' started by TrueBlueNYC, Apr 19, 2018.

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  1. TrueBlueNYC

    TrueBlueNYC New Member

    Have there been any buyers that purchased this vehicle last year and was able to claim the full $7,500 tax credit when filing taxes? From what I have read about how tax credits work, this is a non-refundable tax credit. So if you owe less than $7,500 in taxes, then the government will NOT write you a check for the overage. The $7,500 will simply take your tax liabilities down to zero, but you are leaving money on the table (and effectively raising the cost of the Clarity).

    I am interested in purchasing the Clarity, but the purchase price only makes sense for me if I can claim the full $7,500 in federal and $2,000 New York State tax rebate. I'm not sure I can create a situation for myself at the end of the calendar year where I owe more than $7,500 in federal taxes. Last year, I had a hefty refund and I have adjusted the number of exemptions I am claiming this year.

    I'd appreciate any pointers from any tax savvy Clarity buyers in the forum.

    Thank you!
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  3. LAF

    LAF Active Member

    If your overall tax liability (not what you pay in April) is at least $7500 you will get full rebate. We withheld just the right amount so we did not owe any tax but got a $7500 rebate because we payed more than $7500 over the entire year.
  4. jdonalds

    jdonalds Well-Known Member

    I had to work to have 7500 tax owed but was able to make that happen. Got the full tax credit. I wouldn't have bought the Clarity otherwise.
    GTO 409 and TrueBlueNYC like this.
  5. KentuckyKen

    KentuckyKen Well-Known Member

    What LAF said. It’s not what you have or will have paid, it’s what your tax liability is.
    I’m retired and withdraw from my savings/investments in such a way to always have less tax liability than the $7500 non refundable tax credit.

    So in my case, my financial/tax planner has me this year taking put enough in 2018 pre-tax $ to generate the full $7500 tax liability. This is more than I need to live on, so the excess will be put back in to grow and will not be taxed when withdrawn later.

    Best advice is see you tax planner. He/she can advise you on best strategies for your situation. Bottom line is that if you will owe Uncle Sam at least $7500 (what you have deducted has no bearing) this year you will get the full credit.
    TrueBlueNYC likes this.
  6. bobcubsfan

    bobcubsfan Active Member

    Maybe a good idea to lease. We did. The tax credit is rolled into the lease which reduces the monthly payment.
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  8. Timothy

    Timothy Active Member

    Usually only part of the tax credit is rolled into the lease. Our dealer would do half. So we purchased.

    Just to reiterate again what LAF and Kentucky have already said in case it is not clear -- getting the full rebate depends on the Federal taxes you owe for that year, it does not matter if the check you write to the IRS with your return is less that that because of withholdings. As long as the total Federal taxes you would pay for 2018 is over $7500, you are good.
    KentuckyKen likes this.
  9. Arty_Vandelay

    Arty_Vandelay New Member

    FYI the Clarity doesn't qualify for the full $2,000 rebate in New York. Only $1,700 I believe.
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  10. megreyhair

    megreyhair Active Member

    Another point to keep in mind is that a lot of people, especially those in CA and northeast US where local taxes are high is that local tax deduction/property taxes are capped at $10k for 2018 (all thanks to that orange face guy:mad: ). This would affect quite a lot of people, including me. My local taxes are about $20k so I will lose have of that deduction. I am keeping my finger crossed as I have no clue what the outcome will be. :confused:
  11. bobcubsfan

    bobcubsfan Active Member

    The sticker on our Clarity is $37,490. The "agreed upon value" including Acquisition Fee is $30,208. So it appears that almost the full tax credit was used to compute the lease, I think. Lease docs are always difficult to interpret. We put down $1,500 which we will get back from California rebate program. Nothing else "out the door." Our lease payment is $454.99.
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  13. PHEV Newbie

    PHEV Newbie Well-Known Member

    People are reporting dealer discounts of $3000-4000 off the Clarity Touring (people aren't buying them!). Now that I've owned the car, I would be happy to negotiate a $3000 discount and as low as a $2500 tax credit. That, plus my state's $1000 rebate, brings the cost down to about $31,000 before tax and reg. To me, that's still a bargain. With the full tax credit, it's a crazy fantastic buy. I remain stunned that people aren't lining up Honda dealers to get one.
    AndyBA and TrueBlueNYC like this.
  14. TrueBlueNYC

    TrueBlueNYC New Member

    I have not yet been able to talk any area Honda dealers into a discount anywhere that large. So far, all my discussions have yielded less than $1,000 off the MSRP. I wonder if I should hold out for a bit to see if they are willing to go lower to move some product?
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  15. PHEV Newbie

    PHEV Newbie Well-Known Member

    I purchased mine in mid-Dec when my dealer only had one. I emailed them (through their website) and asked for a quote. They offered $1000 off. I countered with $2500 off. They came back with $2000 off, which I took (I would have taken $1500 since they just arrived at dealers and congress had threatened to take away the tax credit then). Negotiating via email is the best way if you don't need a test drive. The dealers know that you could be contacting multiple dealers so they know the best way to sell to you is to offer a good price. Good luck and check out the thread for prices paid and also the Truecar website for transactions in your area.
    Last edited: Apr 19, 2018
  16. bobcubsfan

    bobcubsfan Active Member

    We got the Costco deal.
  17. megreyhair

    megreyhair Active Member

    @TrueBlueNYC , Are you in the NYC area? I got my touring for 33000 a few weeks ago. But then you have to deal with the 'crap' fee like wheel lock, nitro tires,and some other crap fees.
    TrueBlueNYC likes this.
  18. LAF

    LAF Active Member

    I got $1500 off the Touring in Dec
  19. I am neither an accountant, nor tax attorney, but if you are lucky enough to be in a situation where you need to generate tax liability and you have long term investments (stocks, mutual funds, etc...). You might be able to sell enough "capture capital gains" and effectively raise your cost basis (in order to save taxes later)!

    Consult your tax advisor. cpa, or financial adviser.
    GTO 409 likes this.
  20. bobcubsfan

    bobcubsfan Active Member

    Also, tax, license, etc. What is the "out the door" cost? As I said earlier, our "out the door" cost was $0! We gave $1500 which will be refunded by the State of California.
  21. LAF

    LAF Active Member

    Surprising because in Mass it gets full $2500
  22. bobcubsfan

    bobcubsfan Active Member

  23. clinton

    clinton New Member

    Here in SoCal, the base trim MSRP is $34290 including destination fee. I got it for $30790, so $3500 under MSRP, and around $33700 out the door with taxes, registration, etc.
    Best offers from dealers around San Diego were in the whole range from $200 off to what I got: I contacted online all dealers within 50 miles, got the best offer (but wrong color), then asked the second best (which had the color I wanted, in stock) to match it, and they were "happy" to comply.
    Then got a couple more hundreds off by financing (the minimum) instead of going cash: the salesman was straight enough to admin that the dealer was making $1200 commission from the finance company, so I politely asked for a slice of the cake...

    I was surprised to see pretty much all dealers had loads of them (10+ each) in stock.

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