Couple of Fed Tax Credit Questions

Discussion in 'General' started by Cali65, Dec 13, 2018.

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  1. Cali65

    Cali65 Member

    A couple questions for anyone that is familiar with the Federal Tax credit:

    1. The fed tax credit is still good for vehicles purchased in 2018? I'm pretty sure it is but read something about the tax reform might have affected it.
    2. If buying from out of state this late in the year, the vehicle may not get to me in time to be registered at the dmv for which case does the fed tax credit go by purchase date 12/2108 or dmv registration date 01/2019?

    I see on the tax form it asks "date vehicle placed in service" so I guess it depends what that means.

    Sent from my SM-N960U using Inside EVs mobile app
    Last edited: Dec 13, 2018
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  3. DucRider

    DucRider Well-Known Member

    Treasury’s Interpretation
    Regs. Sec. 1.167(a)-(11)(e)(1)(i) provides that property is considered to be placed in service when it is “first placed in a condition or state of readiness and availability for a specifically assigned function

    If your vehicle is in transit and not available for use, it would technically not qualify as placed in service in 2018
    DaleL likes this.
  4. I agree with the previous poster's answer to #2.

    As for #1, the following Edmunds page gives an overview plus a link to more info:

    • The 2017 tax bill didn't touch the EV subsidies
    • The subsidy is based on the car's battery size, and whether the manufacturer has sold more than 200,000 EVs.
    • Basically all pure EVs have large enough batteries for the full credit. PHEVs often have lower credits.
    • Tesla and probably GM have cleared the 200k limit this quarter, so the available credit will drop to $3750 for their cars delivered 1/1/19-6/30/19, $1,875 for cars delivered 7/1/19-12/31/19, then $0 starting 1/1/20.

    What model(s) are you looking at?
  5. DucRider

    DucRider Well-Known Member

    Tesla hit the 200K mark in the first days of July, and had all of that quarter (thru September) plus one more quarter (thru 12/31) at the full credit level. They then have two quarters at 50%, and the following two at 25%. Tesla worked very hard to manage deliveries so as not to hit the 200K mark near the end of a quarter and maximize the time the full Tax Credit was available.

    GM hit the mark sometime this month, so they have the last couple of weeks of this quarter, plus the first quartet of 2019 at the full Tax Credit amount. The credit sunset starts in April for GM with 6 months at 50%, then 6 mos at 25%).

    Bottom line is, for 2018 ALL EV's still qualify for the full Tax Credit.

    2019 is a bit of an unknown. There is support in Congress (who writes the Tax Code) to eliminate the credit entirely, and also support to rework it in some manner to restore the full tax credit to all EV's.
  6. Three things in life are guaranteed: death, taxes, and no meaningful legislation from divided government ;)
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