Tax credit question

[Robksouth]

Ok I'm young and dumb I bought a 2013 fusion with the expectation of getting the credit in federal taxes and the credit from California. I just researched a little more then I initially did and I'm seeing the tax credit only pays the taxes you owe and if you don't owe which I never do you won't get any back in your rebate. I bought this car not only because I liked it but because I was counting on that extra money at the end of the year. I normally get a rebate of a few thousand so will I not get the 4007 I thought I was going to get?

[Russael]

Welcome to the boards.

 

I'm kind of in the same boat in the sense that I do not think I'm going to get the full 4007 credit.  I never owe (usually get back ~800 or so).

 

From what I understand, you can be credited back the full amount if the feds KEEP at least 4007 out of your wages (after tax refund, etc)... then you can get it back.  However, for instance, if the feds keep 3500 of your money for tax, then the most you can get back is 3500.  They won't give you back more than they kept from you.

[Eric4539]

Hi Robksouth!  You are not young and dumb.  You are environmentally conscious and the owner of the best plug-in hybrid on the market!  That is my biased opinion of the car.

 

Since you live in California, the Energi is eligible for a $1500 cash rebate through the Clean Vehicle Rebate Project if you haven't applied for it already.  My dealer submitted my name so I would be on the list in case funding ran out.  It did not and funds are still available.  Go to this website to apply.

 

http://energycenter.org/programs/clean_vehicle_rebate_project

 

Also check the county in which you live to see if you qualify for other rebates.  I live in the Central Valley and I received a $2000 cash rebate also.

 

As for the Federal Tax Credit you should check with an accountant to calculate how much you qualify to use.  Russael explained it well.  You may get to use all of the $4007, a portion of it, or none at all depending on your 2013 tax liability.

 

The main thing is that you enjoy your Energi!!  Welcome to the forum!

[Robksouth]

I did already receive the 1500 did that day 1. I've looked at irs.gov and all the things I normally get my tax return from are Credits . ie child tax credit, EITC (earned income tax credit) that's what makes up the few thousand I normally get. So the 4007 dollars should be credited to me as well right. It's a credit the same as the others are a credit and I get those in the form of a tax return check or whatever. From my les stand point.

[larryh]

The federal plug-in hybrid tax credit can only be used to reduce the income tax that you owe.  If you do not owe more taxes than the credit, you do not get a refund for the amount the credit exceeds taxes.  See lines 20-23 of form 8936.   The same is true for the credit for installing a charging station.  In addition, the credit for a charging station is subject to AMT.  The plug-in hybrid tax credit is not subject to AMT. 

Edited January 10, 2014 at 12:14 PM by larryh

[shaggy314]

Larry and Russ are correct. You have to owe 2013 tax for a 2013 tax credit to help you (no carry over). For the most part, it doesn't matter what income tax you are paying, the credit goes to reducing the amount (income, cap gains, etc.). As always, never take our word and consult a tax attorney or CPA. :-D

 

I'm sure the thinking is that if you are buying a $40k car that you earned some income and are paying some tax on it... If not, well thank you for JUST lowering foreign energy dependence, polluting less, and getting great mileage in a fabulously cool looking car.  :-)

Edited January 13, 2014 at 08:48 PM by shaggy314

[jeff_h]

Larry and Russ are correct. You have to owe 2013 tax for a 2013 tax credit to help you (no carry over). For the most part, it doesn't matter what income tax you are paying, the credit goes to reducing the amount (income, cap gains, etc.). As always, never take our word and consult a tax attorney or CPA. :-D

 

I used to be a VITA (Volunteer Income Tax Assistant) for the IRS, which involved a training course on various forms, situations, tax credits, etc.  The terms that they used in the training was "refundable" tax credits and "non-refundable" tax credits.  With refundable tax credits (such as EITC) the filer gets the full amount even if it exceed their total tax liability (which has nothing to do with how much one has had withheld during the year), and with non-refundable tax credits (I am 99% sure that the PHEV credit is non-refundable) the filer only gets the amount up to the amount of their tax liability. 

 

But as shaggy notes, if you have any doubts (such as it not being spelled out clearly on the form or in the accompanying information to accompany the form or the pertinent IRS publication), consult a tax attorney or CPA.

Edited January 13, 2014 at 10:58 PM by jeff_h

[ChuckJ]

I used to be a VITA (Volunteer Income Tax Assistant) for the IRS, which involved a training course on various forms, situations, tax credits, etc.  The terms that they used in the training was "refundable" tax credits and "non-refundable" tax credits.  With refundable tax credits (such as EITC) the filer gets the full amount even if it exceed their total tax liability (which has nothing to do with how much one has had withheld during the year), and with non-refundable tax credits (I am 99% sure that the PHEV credit is non-refundable) the filer only gets the amount up to the amount of their tax liability. 

 

But as shaggy notes, if you have any doubts (such as it not being spelled out clearly on the form or in the accompanying information to accompany the form or the pertinent IRS publication), consult a tax attorney or CPA.

Jeff:

Two questions:

1. if it is non-refundable and the taxpayer doesn't have that much tax required, can the balance it be carried over to the next year?

2. If you lease the car, are you qualified for the tax incentive?

 

ChuckJ

[jeff_h]

Jeff:

Two questions:

1. if it is non-refundable and the taxpayer doesn't have that much tax required, can the balance it be carried over to the next year?

2. If you lease the car, are you qualified for the tax incentive?

 

ChuckJ

 

Here are details from last year's Form 8936, which I *think* is the proper form to use but it seems there are other possibilities such as 8834 and 8910...  I'm waiting for 8936 to be updated and if that gets updated that is what I am filing.  Anyway, here are the answers as directly copied/pasted from the Form 8936:

 

1) Line 23: If you cannot use part of the personal portion of the credit because of the tax liability limit, the unused credit is lost. The unused personal portion of the credit cannot be carried back or forward to other tax years.

 

2) The following requirements must be met to qualify for the credit:

• You are the owner of the vehicle. If the vehicle is leased, only the lessor and not the lessee, is entitled to the credit;

• You placed the vehicle in service during your tax year;

• The vehicle is manufactured primarily for use on public streets, roads, and highways;

• The original use of the vehicle began with you;

• You acquired the vehicle for use or to lease to others, and not for resale; and

• You use the vehicle primarily in the United States.

 

If you leased the vehicle, then the credit would not be permitted - however as I recall there was an additional rebate in place through part (or all?) of the year for about the same amount to act as a de-facto passthrough.

[Russael]

Any idea when the 2013 form will be available?  It still has 2012 on the IRS site... will that matter when we do our taxes?  I get mine done in early Feb.

[jeff_h]

Any idea when the 2013 form will be available?  It still has 2012 on the IRS site... will that matter when we do our taxes?  I get mine done in early Feb.

 

My guess is very soon, since there are new forms posted for 8834, 8910, and 8911.  I am planning to use the new 8911 for the L2 charger purchase/installation credit, and waiting for the new 8936 and since the others are posted then hopefully this one won't be far behind.

 

Added - Here is info from Page 47 of the 1040 Instructions:

 

Line 53 Other Credits

 

Qualified plug-in electric drive motor vehicle credit. See Form 8936.

 

Qualified electric vehicle credit. You cannot claim this credit for a vehicle placed in service after 2006. You can claim this credit only if you have an electric vehicle passive activity credit carried forward from a prior year. See Form 8834.

Alternative motor vehicle credit. See Form 8910 if you placed a new fuel cell motor vehicle in service during 2013.

Alternative fuel vehicle refueling property credit. See Form 8911.***

 

 

 

***: and here is what is contained in the instructions on page 2 of this year's Form 8911 -

 

1 - For property of a character not subject to an allowance for depreciation placed in service at your main home (personal use property), the credit for all property placed in service at your main home is generally the smaller of 30% of the property’s cost or $1,000.

 

2 - Qualified alternative fuel vehicle refueling property is any property (other than a building or its structural components) used for either of the following.

      • To recharge an electric vehicle, but only if the recharging property is located at the point where the vehicle is recharged.

 

In addition, the following requirements must be met to qualify for the credit.

• You placed the refueling property in service during your tax year.

• The original use of the property began with you.

• The property is not used predominantly outside the United States.

• If the property is not business/investment use property, the property must be installed on property used as your main home.

Edited January 14, 2014 at 02:34 AM by jeff_h

[Fat Fusion]

Jeff, is the property discussed above a Level 2 charger and related items?

[Fat Fusion]

Jeff, is the property discussed above a Level 2 charger and related items?

 

Nevermind.  I jumped past paragraph 1 apparently. Just calculated my Level 2 Clipper Creak with j box install, breaker, wiring, hook, holster, post and concrete at $765.33 giving me a 30% credit of $229.60.

[shaggy314]

You go Jeff_h!

 

FYI: It's showing up in TurboTax 2013 (Download and DVD versions) now... I've started mine using end of year statements and it is working to give me a refund so far.

 

It is allowing me to fill out for the car ($4007), large item sales tax (TX, 6.25%), and L2 charger credits (mine was $1300 all told). It's a L-O-N-G wait to mid-Feb to get my online statements for downloading direct... /cry

[jeff_h]

Any idea when the 2013 form will be available?  It still has 2012 on the IRS site... will that matter when we do our taxes?  I get mine done in early Feb.

 

FYI - I checked today and the updated Form 8936 is posted.  On first look it appears that the credit is limited to $2,500 per vehicle, however the note for line 15 of "If the vehicle has at least four wheels, leave lines 16 and 17 blank and enter this amount on line 18" means ignore lines 16 and 17 and that $4,007 per vehicle (as noted in the below URL) goes on line 18 etc.

 

Also, here is the URL again where the $4,007 is referenced:  http://www.irs.gov/Businesses/30D.-New-Qualified-Plug-in-Electric-Drive-Motor-Vehicles-%E2%80%93-Ford-Motor-Company

Edited January 20, 2014 at 09:49 PM by jeff_h

[Russael]

I re-read that form countless times and did a pile of research on it... took a while for me to realize that the credit of 2500 bucks was for something like an electric golf cart.  But I'm glad it's up finally.

[willsyaya57]

My state does not have the state tax incentives that CA does. If I fly to CA, to buy the car, do I get the incentive or not? Mind you, the airfare will make a serious dent in the $1500 saving.

[TX NRG]

Not likely. You have to reside there and register it there with the DMV for 36 months. Sales tax is also a bit higher in CA.

 

http://energycenter.org/clean-vehicle-rebate-project/ford-fusion-energi-requirements

[jeff_h]

I re-read that form countless times and did a pile of research on it... took a while for me to realize that the credit of 2500 bucks was for something like an electric golf cart.  But I'm glad it's up finally.

 

That's why I added the comment I did up above, as I did the same thing in reading the form and limited instructions (also read the 1040 instructions and 1040 general instructions) and a rudimentary check would make one think (as it did for me) that the credit was limited to $2,500 per vehicle.  Personally, I think the form could have been written better to avoid confusion.

[Russael]

That's why I added the comment I did up above, as I did the same thing in reading the form and limited instructions (also read the 1040 instructions and 1040 general instructions) and a rudimentary check would make one think (as it did for me) that the credit was limited to $2,500 per vehicle.  Personally, I think the form could have been written better to avoid confusion.

 

Isn't tax law designed to be confusing? :)  After all, if someone claims 2500 bucks rather than 4007, Uncle Sam gets to keep an extra 1507.  That could buy a lot of doughnuts and coffee.

[Robksouth]

Ok has anyone filed with the free or fairly priced online tax software I can not find one that supports the right form for the credit im not certain it will do anything for me since im getting a refund from EIC and child tax credit.

[Robksouth]

Im military if that helps I know there is alot that offer free tax prep for military maybe you guys know one I havent found

Edited January 26, 2014 at 06:17 AM by Robksouth

[http]

I started working up my tax return this weekend using Intuit's Turbo Tax Premier edition.  It asked me if I bought a PHEV and took all the information needed to complete the Form 8936, Qualified Plug-in Electric Drive Motor Vehicle, but told me that the IRS has not yet made the electronic forms available for this credit.  Intuit estimates that the form will be available by Feb. 6.  The software did apply the $4001 credit to my tax calculation.  I'll be getting a nice refund.

[shaggy314]

Ok has anyone filed with the free or fairly priced online tax software I can not find one that supports the right form for the credit im not certain it will do anything for me since im getting a refund from EIC and child tax credit.

 

 

See my previous post. TurboTax is updating all three forms (car rebate, large item sales tax, and L2 charger rebate)

[murphy]

Ok has anyone filed with the free or fairly priced online tax software I can not find one that supports the right form for the credit im not certain it will do anything for me since im getting a refund from EIC and child tax credit.

TaxAct has the form.  I've already filled it out.  It's a little tricky to get it right because the same form is also used for business deductions.