EV Tax credit and Tax Software.

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Puppethead said:
The income and vehicle price caps are going to change things quite a bit (I guess the SE is in the "sedan" category, but where would the Aceman fit?):
  • Zero-emission vans, SUVs, and trucks with MSRPs up to $80,000 qualify.
  • Electric sedans priced up to $55,000 MSRP qualify.
  • The full EV tax credit will be available to individuals reporting adjusted gross incomes of $150,000 or less, $300,000 for joint filers.
On the plus side, rebate at point of sale and no more # of vehicles sold cap. All assuming this actually passes, I'm skeptical it'll happen.
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The $80K vs $55K disparity further incentivizes manufacturers to make SUVs and stop making sedans.
 
Puppethead said:
On the plus side, rebate at point of sale and no more # of vehicles sold cap. All assuming this actually passes, I'm skeptical it'll happen.
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I don't understand how the point-of-sale rebate will co-exist with the income caps for the rebate. Do we have to somehow show our income to the dealer to get it? Or is the POS rebate independent of the income cap (which makes more sense to me.)
 
insightman said:
The $80K vs $55K disparity further incentivizes manufacturers to make SUVs and stop making sedans.
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Or simply inflate their price even more for something that is essentially the same raw and labor cost to produce. Nobody will ever convince me that it will cost GM 50% more to produce the Blazer EV than it does to make the Equinox EV.
 
Alf_W said:
I don't understand how the point-of-sale rebate will co-exist with the income caps for the rebate. Do we have to somehow show our income to the dealer to get it? Or is the POS rebate independent of the income cap (which makes more sense to me.)
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If they implement it like they did up here, you’ll head to a government website and register for the program, and they already know all about you. Your dealer will then log into that site and complete the process upon delivery.
 
Alf_W said:
I don't understand how the point-of-sale rebate will co-exist with the income caps for the rebate. Do we have to somehow show our income to the dealer to get it? Or is the POS rebate independent of the income cap (which makes more sense to me.)
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The only thing that changes is for cash purchases and financing. For leases, manufacturers (leasing company actually) would already pocket the tax credit. Makes it extra profitable for the dealer to eliminate a lease buyout option and pocket the used car rebate!

If you want a point of sale rebate, you're probably going to have to disclose your SSN and prior year tax returns to the dealer.
 
teslarati97 said:
If you want a point of sale rebate, you're probably going to have to disclose your SSN and prior year tax returns to the dealer.
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However, it's the current year's tax return that counts, not the prior year's. I don't make enough to owe $7,500 in taxes when I buy my EVs, so in those years I transfer enough traditional IRA money to my Roth IRA to bump my taxes up to $7,500.

If it's not a rebate, then do people who don't owe $7,500 at the end of the year have to pay back all or some of the EV tax credit they received at the time of sale? Even if that's true, at least you're getting a no-interest loan on the part of the MSRP you have to repay. Very confusing to me.
 
tesrivmini said:
Well, it doesn't matter how slow your ship is, due to this o_O:
"Transition provision for EVs with written sales orders dated in 2022 prior to the date of President signing the bill but delivered in 2023 allows purchaser to claim the “old” credit in 2023."
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Ugh... k I'm going to have to do way more reading into this to figure out what the best route is. :(
 
insightman said:
However, it's the current year's tax return that counts, not the prior year's. I don't make enough to owe $7,500 in taxes when I buy my EVs, so in those years I transfer enough traditional IRA money to my Roth IRA to bump my taxes up to $7,500.

If it's not a rebate, then do people who don't owe $7,500 at the end of the year have to pay back all or some of the EV tax credit they received at the time of sale? Even if that's true, at least you're getting a no-interest loan on the part of the MSRP you have to repay. Very confusing to me.
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Yes presently the tax credit would work because it factors in all of the current year income. However, if you do a point of sale rebate (reduction off the sticker price or MSRP) someone would have to initially confirm using prior year tax information (i.e when taking delivery in January/February) AND then IRS would have to come back and audit at the end of the year.
 
teslarati97 said:
Yes presently the tax credit would work because it factors in all of the current year income. However, if you do a point of sale rebate (reduction off the sticker price or MSRP) someone would have to initially confirm using prior year tax information (i.e when taking delivery in January/February) AND then IRS would have to come back and audit at the end of the year.
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Messy.
 
tesrivmini said:
Well, it doesn't matter how slow your ship is, due to this o_O:
"Transition provision for EVs with written sales orders dated in 2022 prior to the date of President signing the bill but delivered in 2023 allows purchaser to claim the “old” credit in 2023."
Click to expand...

The written sales order provision is important, because cars ordered as early as May could very easily be pushed into 2023, given the horror stories that have been posted about delays. Thanks for that.
 
Newkirk said:
When I found out through this forum that people from some other states were getting big state tax credits for their EV purchase, I thought, "Man, it sucks that I can't take advantage of those!" But then I realized the reason is I don't pay any state income tax at all in Florida, so there's nothing to give back. Works for me!
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No income tax in Texas either but they were offering a check for $2,500 if you bought an EV. That said, Tesla’s were not eligible and there was a cap of about 2,000 vehicles. They opened applications at the end of last year and only closed the applications a month or so ago so despite my concerns late last year of being too late to apply it seems not many non Tesla EVs are sold here…
 
BackPack said:
I’ve lived in 4 different states. In three of the four, I had to pay a state income tax. The fourth was Texas, one of the few states with no income tax. What I’ve found through the experience of living in these states is in the end I usually pay the same. It just might go in another bucket. Example: TX has no state income tax, but sales tax was very high and property taxes were extremely high. Georgia had an income tax, a fairly high sales tax, reasonable property taxes, but they also put sales tax on groceries. It’s the only state I’ve lived in where groceries are taxed. So in the end, my money going out was essentially the same and the government got their money; just through different buckets.
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To an extent, yes, as services cost a certain amount to provide so they have to gather it from somewhere.
However… the trick to places like Texas is not to live the high life as that’s where they tax you. You are literally taxed on your lifestyle vs income.

I’ve lived in 3 States, currently in Texas after moving from Queens NYC.
New York City has a rough sales tax rate of about 8%, Here it’s about 8.25%.so that’s an extra $250 for every &10,000 we spend. Not much difference.
Property taxes are the key differentiator with a much higher rate here than New York.
But… property costs a lot less.
Our $650,000 1 bed 950sqft apartment in Queen’s was $5,600 per year in property taxes, but a $650,000 property here in Plano would be $12,285 per year. Huge difference. But… that would give you a 4 or even 5 bed property four times the size of that apartment! We opted for a 3 bed 2,000sqft home worth $350k and taxes on that are only $6,600 so only $1,000 more than New York and we still have double the square footage.

So we spend $1,000 a year more in property taxes, $250 more per $10,000 we spend, but saved $12,000 in state and local income taxes. Even if we got the big Texas house we’d be thousands better off.
The math may not be as sweet comparing other flyover states but places like NYC…
 
AndysComputer said:
To an extent, yes, as services cost a certain amount to provide so they have to gather it from somewhere.
However… the trick to places like Texas is not to live the high life as that’s where they tax you. You are literally taxed on your lifestyle vs income.

I’ve lived in 3 States, currently in Texas after moving from Queens NYC.
New York City has a rough sales tax rate of about 8%, Here it’s about 8.25%.so that’s an extra $250 for every &10,000 we spend. Not much difference.
Property taxes are the key differentiator with a much higher rate here than New York.
But… property costs a lot less.
Our $650,000 1 bed 950sqft apartment in Queen’s was $5,600 per year in property taxes, but a $650,000 property here in Plano would be $12,285 per year. Huge difference. But… that would give you a 4 or even 5 bed property four times the size of that apartment! We opted for a 3 bed 2,000sqft home worth $350k and taxes on that are only $6,600 so only $1,000 more than New York and we still have double the square footage.

So we spend $1,000 a year more in property taxes, $250 more per $10,000 we spend, but saved $12,000 in state and local income taxes. Even if we got the big Texas house we’d be thousands better off.
The math may not be as sweet comparing other flyover states but places like NYC…
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I’ve lived in four states including Texas. Currently in California. When I look at how much it costs to live somewhere, I take into account utilities, property taxes, income tax, and insurance. I’ve found that there’s not much difference amongst the states I’ve lived in. Yes, California is higher, but it’s not as outrageous as people make it out to be. And the quality of life is better here than any place I’ve ever lived. I remember moving from WI to TX thinking I was going to save so much money with zero state income tax. At the end of the first year, I realized the money that went out was about the same, just went into different pockets that weren’t mine.
 
I have a bit different cost of living experience. I've lived in 4 states also, but save a ton of money in NH. No sales or income taxes for most. College is subsidized but far from free, no EV rebates. Most services are a little extra cost. So if you are one that needs pampered, that may make up some of the cost of living difference. Property tax and utilities are high, not as high as Mass. but higher than Pa or NY, depending on the county. When younger I tried but could not afford to live comfortably in a safe neighborhood in eastern Massachusetts with their property values, taxes, and rents being so high. Two incomes were mandatory.

NH makes most of their budget from the rooms and meals tax, annual car registrations that just about entirely supports the roadway infrastructure (which is in pretty good shape), and business type taxes. Cost me $600 to register the mini this year, $90 for my 10 year old truck as rates are based on age an list prices.

Last year there was a $100 mill state surplus. Quality of life is suburb or rural in nature, lots of lakes, excellent ocean beaches within 45 minutes, White mountains 45 minutes, Boston night life 45 minutes... excellent schools... not bad.... unless you hate snow. :)

So it can be done with the right motivation.
 
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