EV credit IRA rules

Technical topics regarding tax preparation.
#1
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Hi,

I read that starting in 2024 purchasers of qualified electric vehicles will be able to take the tax credit upfront (at the dealer) instead of on their tax return.

How would that work for a buyer who has an AGI over $300K MFJ, who wouldn't qualify for the credit?

Would they have to pay back the credit when they file their taxes?
 

#2
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Actually, I found the answer:

Yes, you will have to pay it back when you file your taxes.
 

#3
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telaxman wrote:Actually, I found the answer:

Yes, you will have to pay it back when you file your taxes.


Interesting, so I assume at the POS, the customer will have the option to take it or not. This also means that the dealerships will have to in some way communicate who took the credit.. good luck with that.
 

#4
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Yeah, it sounds like it could be a real mess.

E.g. what if the taxpayer expects their income to be below the threshold but then exceeds it by a small amount?

I wonder if they would even report the purchase to their CPA, etc...
 

#5
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telaxman wrote:Yeah, it sounds like it could be a real mess.

E.g. what if the taxpayer expects their income to be below the threshold but then exceeds it by a small amount?

I wonder if they would even report the purchase to their CPA, etc...


Sure. Possibly the IRS is going to create some kind of reporting requirement for dealerships in which they would issue a form to all taxpayers that took the credit. This form would need to be provided to their tax preparer and reportable.
 


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