I believe the tax credit is against your total tax paid in 2018 not what's shown on Line 22. I did your scenario on Turbo Tax and it shows I would received the total $7500 if the total federal tax for 2018 is more than $7500 not what I had to pay in addition on April 15. Best to check with a tax consultant.
IRS messed up my return
- Thread starter JKroll
- Start date
- Replies 59
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KentuckyKen
Well-Known Member
One more thing to check.
Did you correctly transfer the $7,500 credit to Schedule 3 line 54 and 55 and did you enter 8936 at line 54b and check the box?
Did line 55 get correctly entered on line 12 on the 1040 again along with a check box on line 12b?
If you did all that correctly, and line 11 from your 1040 is >or= the $7,500 (minus any personal credits from the 1040, see instructions) then you got full use of the credit. That doesn’t necessarily mean you will get it all back in a refund. Other items can reduce it such as Other Taxes on line 12 (from Schedule 4) or tax penalties or unpaid taxes or corrections from previous returns to name a few.
But if you did everything correct, you benefited from the full $7,500 by reducing your tax liability by the $7,500 credit, no matter what your actual refund was.
And remember, any Federal income tax withheld or tax payments made by you for 2018 have no bearing on how much of the non-refundable non-rollover credit you get to use. Only your tax liability calculated from your taxable income on line 10 of the 1040 and then placed on line 11 determines how much of the $7,500 credit you can use.
If it’s >or=$7,500, then you get to use it all; if <$7,500, then you can only use the lesser number.
No doubt the forth coming IRS letter will explain why your anticipated refund was reduced. As others have mentioned and based on the limited information you have shared, I think that you got to use the full $7,500 credit and something was flagged by the IRS computer that then reduced your refund.
Please let us know what you find out.
Did you correctly transfer the $7,500 credit to Schedule 3 line 54 and 55 and did you enter 8936 at line 54b and check the box?
Did line 55 get correctly entered on line 12 on the 1040 again along with a check box on line 12b?
If you did all that correctly, and line 11 from your 1040 is >or= the $7,500 (minus any personal credits from the 1040, see instructions) then you got full use of the credit. That doesn’t necessarily mean you will get it all back in a refund. Other items can reduce it such as Other Taxes on line 12 (from Schedule 4) or tax penalties or unpaid taxes or corrections from previous returns to name a few.
But if you did everything correct, you benefited from the full $7,500 by reducing your tax liability by the $7,500 credit, no matter what your actual refund was.
And remember, any Federal income tax withheld or tax payments made by you for 2018 have no bearing on how much of the non-refundable non-rollover credit you get to use. Only your tax liability calculated from your taxable income on line 10 of the 1040 and then placed on line 11 determines how much of the $7,500 credit you can use.
If it’s >or=$7,500, then you get to use it all; if <$7,500, then you can only use the lesser number.
No doubt the forth coming IRS letter will explain why your anticipated refund was reduced. As others have mentioned and based on the limited information you have shared, I think that you got to use the full $7,500 credit and something was flagged by the IRS computer that then reduced your refund.
Please let us know what you find out.
I used Turbo Tax and it asked the battery size. Sorry, I just assumed it was on the form. When preparing my return I entered the wrong size and just received a partial credit. When reviewing the return, I noticed that the credit was incorrect, so I went back and entered the correct size and received the entire credit.
hmm... so turbotax asks for that.
I did everything myself no software. I trust my math skills better than any software developer.
Sandroad
Well-Known Member
H&R Block does not ask. It’s not needed.
OK, I began to doubt myself, so I looked at a copy of my return. There is a worksheet for the form 8936 which asks for the battery capacity in KW hours. That is the reason Turbo Tax required the information. I am not sure if the worksheet is required to be part of the filing.
Clarity_Newbie
Active Member
Sandroad
The max credit one can receive is $7500. The amount a vehicle is eligible for is based on kWh. Those PHEV's with smaller battery capacity, thus EV range, still receive the credit but at a proportionally reduced rate.
The Fed tax credit is listed as "...up to $7500..."
Hope this helps
So in short, other than the fact that you're getting 2700 less than your claim, you actually have No idea why this is happening, much less if it had any thing to do with the Clarity's tax rebate? But you're blaming the IRS off the bat?
KentuckyKen
Well-Known Member
FYI, the worksheet is not needed to file Form 8936. Just enter $7,500. The IRS already accepts that the Clarity has more than 4 kWs of Battery and gets the full credit. See my post # 22.
So far no one has posted that they were denied the full (non-refundable) credit of $7,500 and I would be flabbergasted if @JKroll filed correctly and did not get it. However, whether or not you get to use all of it depends on your tax liability.
So far no one has posted that they were denied the full (non-refundable) credit of $7,500 and I would be flabbergasted if @JKroll filed correctly and did not get it. However, whether or not you get to use all of it depends on your tax liability.
MPower
Well-Known Member
Computers don't blink. I have received refunds of more than $10,000.
Sandroad
Well-Known Member
But, the Clarity is already on the fueleconomy.gov site as qualifying for the full credit, so simply listing the make/model on the form is all that's needed for the IRS. There is no place on the form to enter battery size. I should have written "It's not needed for the Clarity.".
craze1cars
Well-Known Member
Yes your math may be very good but then you rely on a data entry government employee to transfer the whole thing into their computer system without your own double check that persons entries.
Now that I know you paper filed, i agree with your assessment it is most likely a clerical error. Less than 10% of returns are paper filed anymore... IRS would prefer to do away with them fully.
Clarity_Newbie
Active Member
Sandroad
Point taken...didn't look at it that way.
I looked at it from a software "TurboTax asked/HR Block didn't ask" aspect.
No worries.
The Gadgeteer
Active Member
You may have transposed two digits somewhere. Whenever you transpose numbers the difference is always evenly divisible by 9. For example if your entered something for $15,200 that should have been $12,500 you have a $2,700 error.
Make sure the battery size in tax form is 17kHw. It would decide the total credit.
Having problem with the IRS myself. I got a letter saying I was missing form 8834 (I think these are for 2 or 3 wheeled vehicles). I used TurboTax and everything seems to be correct and form 8936 was filed with my return. I sent them a letter saying form 8834 wasn't the right form for my vehicle and 8936 was. I wonder if they're just stalling my refund? 
KentuckyKen
Well-Known Member
There is place to enter battery kWh on Form 8936. So it’s impossible to use it and the worksheet that addresses battery size is not a form you send in with your return. You can file and claim the whole $7,500 without writing down 17 kWh anywhere! I did just that and successfully claimed the entire $7,500 since I made sure my tax liability was more than that.
Having problem with the IRS myself. I got a letter saying I was missing form 8834 (I think these are for 2 or 3 wheeled vehicles). I used TurboTax and everything seems to be correct and form 8936 was filed with my return. I sent them a letter saying form 8834 wasn't the right form for my vehicle and 8936 was. I wonder if they're just stalling my refund?
Form 8834 is not used for the credit normally but rather applies to qualified electric vehicles for passive activity credit.
Here is Form 8834 and the instructions for its worksheet 8582-cr that explain it far more than I can. For the overwhelming majority of us, just Form 8936 is needed.
https://www.irs.gov/pub/irs-pdf/f8834.pdf
https://www.irs.gov/pub/irs-pdf/i8582cr.pdf
Good luck, the problem I find with the IRS is that every time I call, a different person gives me a completely different and contradictory answer to the same question. I gave up and just pay my financial planner to file my taxes.
Ray B
Active Member
Fifteen years ago we were given the name of a tax pro by our financial planner, and have not looked back. The guy lives for studying tax law and the year-to-year changes. It is a completely painless exercise now (our tax situation is a little more challenging than usual due to my wife's side business), and at the end he makes recommendations to adjust our withholding so that we don't owe anything further at the end of the year.
I don't think I will ever go back to tax software or filling out forms myself.