IRS documentation on US federal non-refundable credit for Honda Clarity?

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Kathy

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I've asked my accountant to look into the tax credit for my Honda Clarity that I just bought last month. She's been researching it for me, and in her latest email she says:

"The Clarity should qualify for a non refundable credit. What I am trying to find out is how many sales in each quarter of 2018. That is how the amount of the credit is determined. So far on the IRS website it does not list that amount. Many of the other automobiles that qualify have the sold to date listed."

Does anyone have any further insight into this?
 
We get the full $7,500 credit because of the 17 kW battery size and because Honda is no where near selling enough EVs (200,000) to run into Tesla’s problem.
See IRS form 8936.
 
Kathy said:
I've asked my accountant to look into the tax credit for my Honda Clarity that I just bought last month. She's been researching it for me, and in her latest email she says:

"The Clarity should qualify for a non refundable credit. What I am trying to find out is how many sales in each quarter of 2018. That is how the amount of the credit is determined. So far on the IRS website it does not list that amount. Many of the other automobiles that qualify have the sold to date listed."

Does anyone have any further insight into this?
Click to expand...


https://fueleconomy.gov/feg/taxevb.shtml
 
So I need to state, I am not a professional but I have done my own taxes for years (I own a small business and work full time)

I ran a mock trial of my last years taxes. All you do is fill out the form 8936 (follow the instructions closely and enter $7500 for the clarity).
As far as "proof", well no tax forms really require proof of anything. Typically you must have receipts for anything, so bill of sale would suffice. You are required to keep your documentation for taxes in case of an audit, and that would be the only way your required to actually show proof.

Keep in mind, to get the full $7500 you must have at least $7500 on line #44 of your 1040 AND nothing in lines 48-51 (or at least $7500 minus the sum of 48-51). The child tax credit is a refundable credit, so if you end up below 0 on line #56 you still get that amount).

This will affect people after the Trump tax cut, I ran the (rough) numbers. In order to even OWE $7500 and get the full rebate:
You need to make roughly $65,000+ if your single
Married above $76,000

To the best of my knowledge I think only Tesla has hit that 200k marker, but the phaseout doesn't begin immediately (I think it might kick in this quarter?) so next quarter it will reduce the incentive values.

Here are my official sources:
https://www.energy.gov/eere/electricvehicles/electric-vehicles-tax-credits-and-other-incentives
https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d
As stated, the clarity gets the full $7500 credit:
https://www.irs.gov/businesses/corp...ve-motor-vehicles-american-honda-motor-co-inc
https://insideevs.com/top-6-automakers-200000-federal-tax-credit-limit/
 
Nathan66669 said:
This will affect people after the Trump tax cut, I ran the (rough) numbers. In order to even OWE $7500 and get the full rebate:
You need to make roughly $65,000+ if your single
Married above $76,000
Click to expand...
By "make" I think you mean AGI. That means you need to make than those numbers if you have deductions at work like 401k contributions, maybe health insurance.
 
yes, technical term is your AGI, this is from line 38 of your 1040 which takes into account your full wages (if you have just wages, this is after employer tax deductions on your W-2, such as 401k and health care which is taxable now I believe?)

So those were just quick and dirty raw numbers I estimated.

What has surprised me is how many people have purchased these EVs or PHEVs and don't have the income/taxable liabilities to get the full refund. I've seen a TON of posts about how the "dealers" cheated them...

Also I was just using the standard deduction with nothing extra thrown in there.
 
We have had a job change this year and my husband is self employed so I was curious what the number would be for us as a general target. I knew we would be close so we may have to convert a bit from a traditional IRA to a Roth to maximize the rebate. That amount is a separate guessing game.
 
Candice said:
We have had a job change this year and my husband is self employed so I was curious what the number would be for us as a general target. I knew we would be close so we may have to convert a bit from a traditional IRA to a Roth to maximize the rebate. That amount is a separate guessing game.
Click to expand...

just run last years taxes with your numbers for this year (if you have projected outcome) and increase standard deduction to 24,000 for married. Should get you pretty close. Or just use some of the free estimators: https://turbotax.intuit.com/tax-tools/calculators/taxcaster/#fuegoTaxcasterContent
 
Carro con enchufe said:
You should really know this before tax year end. If in a worst case scenario you don't have the tax liability, you can create tax liability by converting traditional IRAs into Roth IRAs. Any amount converted becomes taxable income.
Click to expand...
That's how we took our $7,500 tax credit. And for geezers like me, you like the fact that the gummint doesn't force you to start withdrawing Roth IRA bucks at age 70-1/2 like it does for regular IRAs.
 
One thing to keep in mind is that the child tax credit will be refundable this year.
That means it gets calculated after the $7500.
Even if you are at zero tax liability after the electric car rebate, the child tax credit applies.
In other words, the child tax credit has no bearing on your tax liability and won't affect the $7500 tax rebate.
 
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Nathan66669 said:
This will affect people after the Trump tax cut
Click to expand...

The new tax law is an increase, not a cut, for many people in states with high state and local taxes, notably California, where a large proportion of EVs are sold. With so many “moving parts” it’s hard to generalize about the law’s effect on any individual or family without running the numbers.
 
I think it's hilarious how the Dems historically complain that the rich don't pay their fair share, and now that the rich folks in California will have to pay more taxes the Dems are crying about them having to pay more.
 
My comment wasn’t meant to be political, just a statement of fact about the effects of the new law as it relates to EV subsidies. Whether or not I like these facts is something I don’t think I - or anyone - should be sharing on this particular forum.
 
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