$7500 tax credit question

[user 527]

Well, I've been enjoying my Spark EV now for just over a year. Now I'm faced with getting about $4500, maybe less, in fed tax credit. Can anyone confirm that 1) it remains that you must take the credit the same year you purchased the car, and 2) you cannot spread the credit over two years. I ask because I'm getting the raise I thought I would receive last year, this year 2016. And although I still would not get the $7500 if required to take it all in one year, it would help to postpone it a year (not that I couldn't use the credit this year).

That this tax credit penalizes those making less than a certain amount (depending on your deductions, this might mean $75000 or more, yes?). Not that I have anything against those making more $$, but if the incentive is to get folks into EVs, it seems obvious this credit should be adjusted to allow a spread over at least a second year's taxes. If this doesn't affect you, then you might well see it differently, I understand.

Anyone confirm the answers to my couple of questions above?

Thanks

 

[nikwax]

Well, I've been enjoying my Spark EV now for just over a year. Now I'm faced with getting about $4500, maybe less, in fed tax credit. Can anyone confirm that 1) it remains that you must take the credit the same year you purchased the car, and 2) you cannot spread the credit over two years. I ask because I'm getting the raise I thought I would receive last year, this year 2016. And although I still would not get the $7500 if required to take it all in one year, it would help to postpone it a year (not that I couldn't use the credit this year).

That this tax credit penalizes those making less than a certain amount (depending on your deductions, this might mean $75000 or more, yes?). Not that I have anything against those making more $$, but if the incentive is to get folks into EVs, it seems obvious this credit should be adjusted to allow a spread over at least a second year's taxes. If this doesn't affect you, then you might well see it differently, I understand.

Anyone confirm the answers to my couple of questions above?

Thanks

To address your point in the second paragraph: yes, it favors people with higher incomes. California addressed this by giving tax credit to lower income people and reducing/eliminating it for higher income people.


If you want to read chapter and verse on the Federal credit: https://www.irs.gov/irb/2009-48_IRB/ar09.html

 

[sparkyps]

Unfortunately you should have been asking this question months ago when you had the possibility of increasing your taxable income in order to take advantage of the tax credit. For example:

1) If you participate in a 401k with a Roth option, switch your contributions to the Roth. You lose the tax deductibility of a regular 401k contribution. If you don't have a Roth option, defer your 401k contributions and/or put the contributions in a private Roth IRA instead.

2) Sell appreciated capital assets

3) Defer charitable contributions

4) Defer paying property taxes till 2016

Etc

But since it is already 2016, it is too late. You can decrease your 2015 income (IRA contribution) but I don't know any way to increase it at this point.

 

[MrDRMorgan]

Well, I've been enjoying my Spark EV now for just over a year. Now I'm faced with getting about $4500, maybe less, in fed tax credit. Can anyone confirm that 1) it remains that you must take the credit the same year you purchased the car, and 2) you cannot spread the credit over two years. I ask because I'm getting the raise I thought I would receive last year, this year 2016. And although I still would not get the $7500 if required to take it all in one year, it would help to postpone it a year (not that I couldn't use the credit this year).

That this tax credit penalizes those making less than a certain amount (depending on your deductions, this might mean $75000 or more, yes?). Not that I have anything against those making more $$, but if the incentive is to get folks into EVs, it seems obvious this credit should be adjusted to allow a spread over at least a second year's taxes. If this doesn't affect you, then you might well see it differently, I understand.

Anyone confirm the answers to my couple of questions above?

Thanks

Download IRS form 8936 and fill it out to determine your 2015 tax credit. That will be all you will be allowed and any remainder up to the max of $7500 cannot be rolled over to the following year. If $4500 is all of the credit you can claim, then Uncle Sam thanks you for the remaining $3000.

To address your point in the second paragraph: yes, it favors people with higher incomes. California addressed this by giving tax credit to lower income people and reducing/eliminating it for higher income people.


If you want to read chapter and verse on the Federal credit: https://www.irs.gov/irb/2009-48_IRB/ar09.html

 

[user 527]

Thanks for your replies!