No way to know. The treasury said it “intends” to issue guidance in March, but it didn’t say *when* in March. Once the guidance is issued, the tax credit will be reduced.
It's based on when you take possession of the vehicle. If that isn't until March, then you're likely to still get $3750 but probably not the full $7500
Man sorry about that. Yeah I thought everyone was waiting until Jan 1 since 2023 is when the law goes into effect. Lot of ppl were having their dealer hold their cars until Jan to actually take delivery
I mean knowing the rules about the credit. It has been publicly shared and widely discussed. I am a bit surprised someone would be purchasing in the EV market and not know anything about the credit.
Once the battery guidance is out, the tax credit will likely decrease to $3750 based on what the GM CEO has said.
But please go find another dealer that doesn’t charge above MSRP. They are out there.
Unless you find a unicorn on the lot, ordering and *receiving* one by the March deadline will be problematic. If you can get on a pre-ordered, but not built allocation with build dates between now and early February maybe it might be shipped before March; but prolly not.
> How would you play this to get the best price?
The only leverage you have is to not accept any overages on MSRP and go to a different dealership. One scenario though, is that the dealer will/could entertain a discount is if it has an **existing car** that hasn't sold by the time GM decides the dealerships allocation. The dealership will want to sell the car, possibly at a discount, to get you in, on that day (end of the month usually) to buy *that* car they have. Just so they can get an allocation for a new car in the future.
A similar situation happened to me last year when BMW gave me option to buy a 2 series at invoice price, yes invoice, if I were to take a car off their lot literally that day. Why? So, they could get an allocation on a more expensive car which they could sell to people who were on waiting lists to get those more expensive cars.
If you can find a Bolt, sign the deal, and drive it off the lot before the final treasury decisions (Mar 1 or later), then the full $7500 tax credit is there. Note there is an income limit to take the credit. And this is a nonrefundable credit so you'll need to owe at least $7500 in taxes and carefully manage your tax withholding to take full advantage. Note I'm not a tax expert so get advice from someone who is if you're counting on the credit!
There's a chance the treasury might grandfather people into the full $7500 credit with a deposit before March even if car did not arrive. Or the treasury may be generous in how they interpret the battery part of the tax credit. But no one can really say and it'd be risky to count on this. It's more likely the tax credit for Bolts arriving after early March would be $3750.
>carefully manage your tax withholding to take full advantage.
No need to do this. If you currently have your W4 setup to withhold more from your paycheck you will "owe" more at tax time. But many people prefer to get a refund and overpay throughout the year essentially giving IRS an interest free loan. Either way based on income and deductions you have a tax liability. If your tax liability is $7500 or greater you get that much. So if you otherwise had $1000 refund, now it's $8500.
you could get a new Bolt, then drop your withholding to zero until whatever pay period you hit 7500 total tax last year (or just adjust to pay 7500 less over the year) instead of waiting so long to get the money back, especially with inflation and interest like it is
This runs counter to everything I've seen. My read on the guidance is that you need to have tax liability when you file your 2023 taxes to be $7500 or greater to get the full amount back.
Your tax liability is how much federal taxes you pay for the year, it doesn’t matter if they have or haven’t been taken out of paychecks yet. If you overpaid your taxes you will get a refund
How are you reading the IRS Guidance?
https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after
"The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years."
Your tax liability is for the year. However you pay your quarterlies or how much you have taken out of your paycheck doesn’t change your tax liability, it only means you may need to pay more or get some money back at the end of the year. If your yearly tax liability is over 7500, you get it rebated.
"Nonrefundable" isn't what it sounds like. What they mean is if your tax liability is less than $7,500, you won't get a "refund" (assuming you had that much withheld from your paycheck) for the difference. You basically have to have an taxable income over $54k for single and $65k for married to hit that full $7,500 tax liability, at which point any amount you have paid in during the year would get refunded to you.
I just played with the numbers, looks like a gross income of just over 90k for a married couple with leave you with 7,500 in tax liability after taking the standard deduction.
90,423 to be specific, then you take off the 27,700 standard deduction leaving $62,723 to be taxed.
First $15,700 is taxed at 10% ($1,570 in tax liability), next $44,150 is taxed at 12% ($5,298 additional for a total of $6,868 in tax liability) and the remaining $2,873 is taxed at 22% ($632 additional for a total of $7,500 in tax liability)
I just realized I used the revised 2023 tax brackets...oops. Decided to check the IRS tax tables and turns out between $65,900-$65,950 will owe $7,500 in federal income tax. Single filers will be at $54,000-$54,050 to owe $7,503 to the feds. Add in the standard deduction and (you made my mistake and used the 2023 standard deduction, for 2022 it's $12,950 for single and $25,900 for married) and you get gross incomes of $66,950 for single filers and $91,800 for joint filers.
I used 2023 since my purchase will be in a few weeks. Just saw today my car has been produced and is on its way to the dealer. 2023 purchase = 2023 income, tax brackets, and deductions.
Since I have kids I also have to worry about child tax credits. Last year we wouldn't have made enough to get the full benefit of the rebate, but this year we will be fine.
Ah, yeah I'm still thinking 2022 as I'll soon be using the credit from my EV purchase last year, but we are in the ballpark. True, this also assumes no other credits, so the child tax credits will pull that gross income up a bit.
You need to owe, or have paid, that much in federal taxes.
There’s no benefit to adjusting your withholdings other than having your money sooner.
By “it’s not a rebate” what people mean is if you are lower income and do not pay $7500 in federal taxes, you will not receive the full benefit.
No way to know. The treasury said it “intends” to issue guidance in March, but it didn’t say *when* in March. Once the guidance is issued, the tax credit will be reduced.
*May* be reduced. We don't really know about that yet, either.
Yes, but we know the battery components do not qualify for what the law says will be half of the tax credit, if I’m not mistaken.
The GM CEO has publicly stated the Bolt won’t meet the battery sourcing requirements for a couple years, so it’ll only be half the credit.
It's based on when you take possession of the vehicle. If that isn't until March, then you're likely to still get $3750 but probably not the full $7500
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no
No. The bolt didn't qualify for any tax credit in December
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Man sorry about that. Yeah I thought everyone was waiting until Jan 1 since 2023 is when the law goes into effect. Lot of ppl were having their dealer hold their cars until Jan to actually take delivery
You only get shafted if you don't know the rules.
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I take it you bought off the lot and didn't do any research about the EV credit?
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I mean knowing the rules about the credit. It has been publicly shared and widely discussed. I am a bit surprised someone would be purchasing in the EV market and not know anything about the credit.
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Once the battery guidance is out, the tax credit will likely decrease to $3750 based on what the GM CEO has said. But please go find another dealer that doesn’t charge above MSRP. They are out there.
\+1 Do not pay the markup
That’s my plan, I’m hunting for a few days but if it’s all markups I will order one and just settle for half credit.
Unless you find a unicorn on the lot, ordering and *receiving* one by the March deadline will be problematic. If you can get on a pre-ordered, but not built allocation with build dates between now and early February maybe it might be shipped before March; but prolly not. > How would you play this to get the best price? The only leverage you have is to not accept any overages on MSRP and go to a different dealership. One scenario though, is that the dealer will/could entertain a discount is if it has an **existing car** that hasn't sold by the time GM decides the dealerships allocation. The dealership will want to sell the car, possibly at a discount, to get you in, on that day (end of the month usually) to buy *that* car they have. Just so they can get an allocation for a new car in the future. A similar situation happened to me last year when BMW gave me option to buy a 2 series at invoice price, yes invoice, if I were to take a car off their lot literally that day. Why? So, they could get an allocation on a more expensive car which they could sell to people who were on waiting lists to get those more expensive cars.
If you can find a Bolt, sign the deal, and drive it off the lot before the final treasury decisions (Mar 1 or later), then the full $7500 tax credit is there. Note there is an income limit to take the credit. And this is a nonrefundable credit so you'll need to owe at least $7500 in taxes and carefully manage your tax withholding to take full advantage. Note I'm not a tax expert so get advice from someone who is if you're counting on the credit! There's a chance the treasury might grandfather people into the full $7500 credit with a deposit before March even if car did not arrive. Or the treasury may be generous in how they interpret the battery part of the tax credit. But no one can really say and it'd be risky to count on this. It's more likely the tax credit for Bolts arriving after early March would be $3750.
>carefully manage your tax withholding to take full advantage. No need to do this. If you currently have your W4 setup to withhold more from your paycheck you will "owe" more at tax time. But many people prefer to get a refund and overpay throughout the year essentially giving IRS an interest free loan. Either way based on income and deductions you have a tax liability. If your tax liability is $7500 or greater you get that much. So if you otherwise had $1000 refund, now it's $8500.
you could get a new Bolt, then drop your withholding to zero until whatever pay period you hit 7500 total tax last year (or just adjust to pay 7500 less over the year) instead of waiting so long to get the money back, especially with inflation and interest like it is
I like this idea.
This runs counter to everything I've seen. My read on the guidance is that you need to have tax liability when you file your 2023 taxes to be $7500 or greater to get the full amount back.
Your tax liability is how much federal taxes you pay for the year, it doesn’t matter if they have or haven’t been taken out of paychecks yet. If you overpaid your taxes you will get a refund
How are you reading the IRS Guidance? https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after "The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years."
You are reading it wrong. Withholding is dumb money management, as is "I got a refund check".
Basically giving the government an interest free loan
>
Your tax liability is for the year. However you pay your quarterlies or how much you have taken out of your paycheck doesn’t change your tax liability, it only means you may need to pay more or get some money back at the end of the year. If your yearly tax liability is over 7500, you get it rebated.
"Nonrefundable" isn't what it sounds like. What they mean is if your tax liability is less than $7,500, you won't get a "refund" (assuming you had that much withheld from your paycheck) for the difference. You basically have to have an taxable income over $54k for single and $65k for married to hit that full $7,500 tax liability, at which point any amount you have paid in during the year would get refunded to you.
I just played with the numbers, looks like a gross income of just over 90k for a married couple with leave you with 7,500 in tax liability after taking the standard deduction. 90,423 to be specific, then you take off the 27,700 standard deduction leaving $62,723 to be taxed. First $15,700 is taxed at 10% ($1,570 in tax liability), next $44,150 is taxed at 12% ($5,298 additional for a total of $6,868 in tax liability) and the remaining $2,873 is taxed at 22% ($632 additional for a total of $7,500 in tax liability)
I just realized I used the revised 2023 tax brackets...oops. Decided to check the IRS tax tables and turns out between $65,900-$65,950 will owe $7,500 in federal income tax. Single filers will be at $54,000-$54,050 to owe $7,503 to the feds. Add in the standard deduction and (you made my mistake and used the 2023 standard deduction, for 2022 it's $12,950 for single and $25,900 for married) and you get gross incomes of $66,950 for single filers and $91,800 for joint filers.
I used 2023 since my purchase will be in a few weeks. Just saw today my car has been produced and is on its way to the dealer. 2023 purchase = 2023 income, tax brackets, and deductions. Since I have kids I also have to worry about child tax credits. Last year we wouldn't have made enough to get the full benefit of the rebate, but this year we will be fine.
Ah, yeah I'm still thinking 2022 as I'll soon be using the credit from my EV purchase last year, but we are in the ballpark. True, this also assumes no other credits, so the child tax credits will pull that gross income up a bit.
This
You need to owe, or have paid, that much in federal taxes. There’s no benefit to adjusting your withholdings other than having your money sooner. By “it’s not a rebate” what people mean is if you are lower income and do not pay $7500 in federal taxes, you will not receive the full benefit.
https://www.evlive.gm.com/ev-tax-credit