7500 tax credit going away asap

[evboy]

the new tax plan is going to end the deduction at once. no phasing out. they are making the tax form simple with only a couple deductions. I wonder how this will effect used prices next year when its signed into law. the only reason we were able to buy a sparke for 9k was because of all the deductions that came off the top.
https://jalopnik.com/huge-tax-credit-for-electric-vehicles-would-be-eliminat-1820077592

 

[SparkE]

The $7500 was a *tax credit*, not a deduction. Yes, there is a huge difference between the two.


Hmm. Maybe I will have to buy a replacement EV well before my current lease is up. I was counting on more and more 200-ish mile-range EV models hitting the market (Tesla Model 3, LEAF2, Bolt, new Ioniq EV, Kia Stonic, Kia Niro, ...) to continue driving down the price of the 80-ish range EVS, like the Spark.

{ Edit: Whoa! There's a 2014 CHEVROLET SPARK EV LT LT1, with only 20k miles for sale @ $7,599 in San Mateo, CA!! }

 

[MrDRMorgan]

The $7500 was a *tax credit*, not a deduction. Yes, there is a huge difference between the two.


Hmm. Maybe I will have to buy a replacement EV well before my current lease is up. I was counting on more and more 200-ish mile-range EV models hitting the market (Tesla Model 3, LEAF2, Bolt, new Ioniq EV, Kia Stonic, Kia Niro, ...) to continue driving down the price of the 80-ish range EVS, like the Spark.

{ Edit: Whoa! There's a 2014 CHEVROLET SPARK EV LT LT1, with only 20k miles for sale @ $7,599 in San Mateo, CA!! }

Unless the FEDs have change the rules, the $7500 federal tax credit is the "maximum" you can deduct against the federal taxes you owe. Stated differently, you can only receive a credit equal to the total federal taxes you owe. For instance, if, after you completed you federal tax return you owed $2500, you will only receive a credit of $2500 - not the full $7500. Said another way, if you owed $2500 in federal taxes, Uncle Sam is NOT going to give you a credit of $2500 AND send you a check for the remaining $5000. You only get $2500! Uncle Sam keeps the rest.

SparkE...2 weeks ago I did just as you stated - I bought a 2016 Spark EV 2LT with 6700 miles on it for $11.7K plus T&L and I get a $500 rebate from PG&E too. The 2016 will replace my leased 2015 Spark EV 2LT which goes back to the dealer at the end of May.

 

[CSW]

This is terrible news people! This will wreak havoc on the EV industry as a whole. Chump is a horrible human being! I still can't believe he won..... disgusting.

 

[MrDRMorgan]

This is terrible news people! This will wreak havoc on the EV industry as a whole. Chump is a horrible human being! I still can't believe he won..... disgusting.

Don't just complain. Write your political representatives and let them how you feel. Check out http://www.pluginamerica.org.

Also Note: The current $7500 tax credit begins to drop by manufacturer when the manufacturer's TOTAL EV sales exceeds 200K EV vehicles.

 

[evboy]

you guys r missing the whole point of my post. it doesn't matter if it was a credit or deduction or whatever. the prices of the used ev always reflected the 7500 plus 2500 in cali. 10k always came off the top once used. if u look on autotrader the bolt is selling for 30k with 1500 miles. the 10k came off quickly. now that the 7500 is gone, does the value of all used evs go up. before when people made a offer on a used ev, the buyer knew most owners got 10 k off and wanted at least that off. now when they make an offer on that used leaf or bolt, they cant assume the owner will sell it for 10k less plus regular depreciation.

 

[CSW]

Your point is true, but the even deeper point is that the 7500 is being ended by a Moron for no logical reason.

 

[evboy]

Your point is true, but the even deeper point is that the 7500 is being ended by a Moron for no logical reason.

I have to disagree some. The tax credit served its purpose to get the ball rolling until battery prices dropped. 2010 to 2017 is long enough for a tax credit that large. the ev industry needs to make it on its own now. battery prices have dropped , so now is a good time. also if they get rid of it companies will design smaller evs. something like a miata would be nice. a 2 seater would be a lot cheaper to manufacture.

 

[NORTON]

.... 2010 to 2017 is long enough for a tax credit that large. ...

But 'tax credits' to the oil barons and a military presence to make that business flow smoothly around the world should just continue forever.
Oh, and the pollution we all share, and enjoy, is just part of doing that business.

 

[CCIE]

The credit was going to expire for GM & Tesla next year anyway. While I don't agree with suddenly ending it for everyone on 12/31/17, I wouldn't have an issue with it ending on 12/31/18. It's served its purpose and can't last forever. No point keeping it going to reward the lazy manufacturers who still haven't released any real EVs.

 

[MrDRMorgan]

How many buyers of an EV can actually take advantage of the full $7500 tax credit? To be sure some, maybe many, can. I know I can't! The full $7500 tax credit is only available if line 47 on your 1040 federal tax return shows you have to pay $7500 or more before applying the tax credit. If your tax liability on line 47 is less than $7500, you can only use the federal tax credit in the amount of your tax liability shown on line 47. Application of other tax credits on lines 48 through 54 will further reduce the amount of the $7500 tax credit too. This fact is not mentioned in TV and newspaper ads that show full application of the $7500 tax credit to show a lower price.

 

[Planerench]

My Spark EV is the newest/youngest vehicle I have ever owned. I have never had enough money to take the new car depreciation hit. The rapid devaluation of EVs was just a rare opportunity for me to taste something I have never had.

The less the federal government interferes with the free market, the better. That goes for all industries, and farms. The tax code should be simple. The Devil is in the details.

 

[MrDRMorgan]

My Spark EV is the newest/youngest vehicle I have ever owned. I have never had enough money to take the new car depreciation hit. The rapid devaluation of EVs was just a rare opportunity for me to taste something I have never had.

The less the federal government interferes with the free market, the better. That goes for all industries, and farms. The tax code should be simple. The Devil is in the details.

There are some great used Spark EVs available - I just bought one - and they are going fast!

 

[Planerench]

I’m curious what California is going to do with a ZED requirement but no lapdog in Washington DC?

 

[Planerench]

So with all that said, why did we all fall in love with the Spark EV? I am NOT an environmentalist but I am an efficiency nut. I have been flying airplanes since I was 15 and I am chief inspector of a helicopter maintenance facility. I don’t like waste.

Getting my butt to work and back should therefore take as little time and money as possible. Spark EV is absolutely perfect. And it can double as a family town transport. They let me charge at work free of charge.

My previous ride was a 1980 VW diesel pickup. 40MPG, cheap repair parts and tires are small and inexpensive. Two seats and a pickup bed. I burned a lot of waste Jet A.

Airplanes need petroleum. That will be the case for some time. If you need a big pickup truck then there should be big pickup trucks. Remove the crutches from the oil industry, and the power company and let the dust settle where it will. Your mileage may vary.

 

[MrDRMorgan]

Getting my butt to work and back should therefore take as little time and money as possible. Spark EV is absolutely perfect. And it can double as a family town transport.

I think you have clearly stated the best use for a Spark EV or equivalent. The Spark EV is not a real comfortable long-distance vehicle. But, for local use, it can't be beat! I have proven that for myself over the last 2.5 years of driving my Spark EVs. Government reports and reports from other organizations indicate 85% of our driving is local. If I want to drive comfortably on a long distance vacation trip, I will rent a more comfortable ICE vehicle.

 

[CCIE]

How many buyers of an EV can actually take advantage of the full $7500 tax credit? To be sure some, maybe many, can. I know I can't! The full $7500 tax credit is only available if line 47 on your 1040 federal tax return shows you have to pay $7500 or more before applying the tax credit. If your tax liability on line 47 is less than $7500, you can only use the federal tax credit in the amount of your tax liability shown on line 47. Application of other tax credits on lines 48 through 54 will further reduce the amount of the $7500 tax credit too. This fact is not mentioned in TV and newspaper ads that show full application of the $7500 tax credit to show a lower price.

In most cases you can get around that issue by leasing.

I don't mean to be rude, but if someone doesn't have $7500 in federal tax liability, they shouldn't be buying a new car. Even retired people should be able to realize enough capital gains to create $7500 in tax liability. If not, save your money and buy a gently used car. Tons of great deals on used EVs.

 

[NORTON]

In most cases you can get around that issue by leasing. ....

But then you're just renting a car for a while.

 

[evboy]

.... 2010 to 2017 is long enough for a tax credit that large. ...

But 'tax credits' to the oil barons and a military presence to make that business flow smoothly around the world should just continue forever.
Oh, and the pollution we all share, and enjoy, is just part of doing that business.

what tax credits r u talking about. oil companies deduct their expenses like any other company. what special deductions do oil companies get that any other company doesn't. if they buy a oil rig that's a expense.
Oil is the greatest commodity ever discovered. its solely responsible for the economic boom of the last 80 years. its responsible for the car industry and all the jobs related to that directly and indirectly. its responsible for the federal highway system. its responsible for the airline industry and all the jobs associated with travel. u guys that complain about oil don't realize how much u have gained in wealth because of it. sure its dirty and newer technologies will eventually replace it but oil will always be the most important product ever.
look how basic life was before oil. we had more progress in the last 80 years after oil than we had for 5000 years before oil.

 

[MrDRMorgan]

1. In most cases you can get around that issue by leasing.

I don't mean to be rude, but (2) if someone doesn't have $7500 in federal tax liability, they shouldn't be buying a new car. (3) Even retired people should be able to realize enough capital gains to create $7500 in tax liability. (4) If not, save your money and buy a gently used car. Tons of great deals on used EVs.

(1) True - if you want to pay, over many years, multiple down payments and monthly lease payments!
(2) Tax liability is usually associated with income. A $7500 tax liability suggests an income of around $100K or higher depending on deductions. You imply only higher income people should purchase new vehicles and the rest should buy gently used vehicles. There might be some wisdom in that thought but the buying public, automakers and financial institutions might take exception.
(3) Retired people - of which I am one - have varying incomes too and we have to also plan for much higher medical costs as we grow older.
(4) Your last point fits me, a retired person, perfectly. When the Spark EV first came out, I choked on the price - too much, even with the tax credit, and I did not want a car payment. In 2015 a friend of mine leased a 2015 Spark EV 2LT and told me about the special lease offer GM was having at the time. I found my 2015 Spark EV 2LT at a dealer 70 miles from my home and leased it for 3 years. State, County and electric utility EV incentives paid the lease in full for 3 years. Essentially I had a free new car for 3 years. 2 Months after I leased the 2015, I purchased and paid for a used 2014 Spark EV 2LT in factory-new condition and with only 1500 miles on the ODO for $13,500 (includes a $500 utility EV incentive). 2 weeks ago I purchased and paid for a 2016 Spark EV 2LT, in factory new condition and with only 6700 miles on the ODO for $11,200 (includes a $500 utility EV incentive) . This vehicle will replace my 2015 when I turn the 2015 in at the end of May next year.