Tax credit questions

Discussion in 'Clarity' started by ProspectiveBuyer, Jul 21, 2018.

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  1. Does leasing or financing have any impact on eligibility for tax credits for electric vehicles?
     
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  3. KentuckyKen

    KentuckyKen Well-Known Member

    Financing no. Also no to how much estimated tax payments already made or tax withholdings by employer. All you need is a $7,500 minimum tax liability to claim the full amount. Then to get get the financial benefit felt in your wallet sooner, you can lower your tax payments for the rest of the year by $7,500. (Disclaimer: I am not a tax professional and do not even play on TV.)

    Leasing is another matter. The dealers in my area do not factor it into the lease as I am not the owner. However, I have seen some posts here that other dealers do. I would ask the advice of your tax preparer to be sure.
    And the state incentives obviously vary greatly and you need someone from that state to advise you.

    And if you’re in Canada, that’s a whole different can of worms with all their govt changes and dates to keep up with while they wait on their Claritys.
     
  4. Thanks Ken. I've also heard of negotiating a lease with option to buy. Not sure whether how that impacts eligibility.
     
  5. Tahuna

    Tahuna Member

    Most leases have an option to buy at the end, but that doesn't qualify for the tax credit. Only the initial buyer of a new car gets the tax credit. In the case of a lease, the initial buyer is the leasing company. You can generally get the dealer to apply some or all of that credit to your total price, but they're not required to.
     
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  6. Atkinson

    Atkinson Active Member

    Honda (or financing corporation) gets the $7500 tax credit when leasing.
    It would be nice if they passed that on in the form of reduced lease payments.
    I know buyers have negotiated the price of the car, discounts, rebates, and the lease equivalent of interest before choosing a lease plan.
    Way out of my league, though.
     
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  8. Odobo

    Odobo Active Member

  9. insightman

    insightman Well-Known Member

    For people who don't have a $7,500 tax liability, you can do what we did. We converted regular IRAs to Roth IRAs to create the tax liability. Unlike regular IRAs, the Roth IRAs don't have to start being liquidated at age 70-1/2 and we'll never have to pay taxes on them when we do eventually liquidate them.
     
  10. su_A_ve

    su_A_ve Active Member

    There's currently 6900 dealer cash for leases. For base, MF is 0.00071 and residual at 44%. Even then, not worth it to lease... There's also 0.9 for 60 months if you finance instead. Or 1500 dealer cash for private financing or cash.
     
  11. Odobo

    Odobo Active Member

    The lease cash depends on your state. In CA is $7300 (deduct from the negotiate price for final sale price ) + the state tax incentive
     
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  13. su_A_ve

    su_A_ve Active Member

    Correct. Varies by state. Forgot to mention. Interesting in that in December it was the same for NJ and CA, but now it's higher for CA. MF/Residual also vary by state.
     

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