Buying an EV/PHEV out of state when it comes to Federal/State incentives

[Rothgarr]

I live in CT but I've read about Massachusetts dealers (not far from me) having great incentives so I'll be calling around and visiting some MA dealers.

I'm specifically looking for a Honda Clarity. The Federal tax credit is $7,500 for that. I assume I'd get that regardless of what state I purchase in, correct?

But how would the state incentives work? Would I get the MA incentive? Or the CT incentive?

 

[bwilson4web]

. . . I'm specifically looking for a Honda Clarity. The Federal tax credit is $7,500 for that. I assume I'd get that regardless of what state I purchase in, correct?

Per EPA: https://www.fueleconomy.gov/feg/taxevb.shtml, yes, $7,500 if your line 22 in 2019 is greater than $7,500 for 2018 tax year.

But how would the state incentives work? Would I get the MA incentive? Or the CT incentive?

You'll need to check the CT rules.

Bob Wilson

 

[Rothgarr]

Thanks!

I'll have to check with my tax person. We are already getting a $16.5k tax credit form a solar array we had installed, and I don't think our tax liability will be that high this year. I'm praying whatever credits we can't use get carried over until next year.

And if I get another $7.5k credit from federal for buying a Clarity complicates it even more...

 

[bwilson4web]

It is a non-refundable tax credit. It can reduce your taxes to zero but you can’t get a refund from the credit.

You might consider waiting to January. In the meanwhile, negotiate with CT dealers and let them work for your business.

Bob Wilson

 

[ekutter]

Yea, you could run into troubles with the combined tax credit. If the solar array credit brings you to near zero, you're SOL. You'd have to find out if the Solar Credit (or at least part of it) can be deferred until next year. The $7500 definitely can't be.

 

[Pushmi-Pullyu]

But how would the state incentives work? Would I get the MA incentive? Or the CT incentive?

Unfortunately, from what other people have reported, there isn't any consistency to how the various States apply their rules. You really do need to find out from the individual State how they handle buying a car in one State but registering it in another. That applies to paying State taxes, too. Be an informed buyer; inquire before you buy! (I was not, as a young and naive first-time car buyer. I wound up paying State tax in both Missouri, where I bought the car, and in Kansas, where I registered it. Had I known...)

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[interestedinEV]

Thanks!

I'll have to check with my tax person. We are already getting a $16.5k tax credit form a solar array we had installed, and I don't think our tax liability will be that high this year. I'm praying whatever credits we can't use get carried over until next year.

And if I get another $7.5k credit from federal for buying a Clarity complicates it even more...

The solar tax credit can be carried over, not the $7.5k EV credit. Based on another dicussion thread, I tried to look it up. In the other discussion thread, the a poster said that his accountant told him that the EV credit will be applied first and then the solar credit. In which case if you have more than $7.5 K in taxes, you are OK. However, on the web, it seems that the solar is applied first but the thread was unclear. My suggestion is talk to your accountant and get it confirmed by him or her before you do anything. It seems ambiguous.

 

[Rothgarr]

The solar tax credit can be carried over, not the $7.5k EV credit. Based on another dicussion thread, I tried to look it up. In the other discussion thread, the a poster said that his accountant told him that the EV credit will be applied first and then the solar credit. In which case if you have more than $7.5 K in taxes, you are OK. However, on the web, it seems that the solar is applied first but the thread was unclear. My suggestion is talk to your accountant and get it confirmed by him or her before you do anything. It seems ambiguous.

Thanks.

My tax advisor confirmed for me over the weekend that the PHEV credit is applied first, then the solar (since EV/PHEV credits don't carry over but solar credits do). And we usually have $12-$13k in taxes so it looks like we'll be tax-free for two years.

 

[interestedinEV]

Thanks.

My tax advisor confirmed for me over the weekend that the PHEV credit is applied first, then the solar (since EV/PHEV credits don't carry over but solar credits do). And we usually have $12-$13k in taxes so it looks like we'll be tax-free for two years.

Then buying one this year should work. Happy driving.