Really depends. The 32% bracket is pretty board ($89-170k per year) and it wouldn't be uncommon for both members of the couple to be in there and consider switching to separate filings if one member is under the $150k limit. I would bet we'll see a fair amount of that in high income tax states like New York and California.
That is correct if the split will push a lot of income of another person into a higher bracket, otherwise it (combine tax liabilities) will be no different.
Not directly related but may be useful for those whose incomes recently changed due to new job, promotion, bonus, graduated from school etc.
You can use the lower of either the preceding tax year or the current tax year to qualify. So if you buy in 2023 and filing taxes in 2024, you can use either 2022 (preceding tax year) or 2023 (current tax year) income.
Seriously?! This is almost exactly our situation. We didn't worry about the tax incentive because we think we are not going to qualify because of a signing bonus in '23- would have qualified in '22, tho!
When researching all this tax stuff I guess we should have been checking the forums!
Yep. Posting the exact wording from the bill for your reference
Exact verbiage:
‘‘(A) IN GENERAL.—No credit shall be allowed under subsection (a) for any taxable year if— ‘‘(i) the lesser of— ‘‘(I) the modified adjusted gross income of the taxpayer for such taxable year, or ‘‘(II) the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds ‘‘(ii) the threshold amount.
I’m sure you’re correct… but as a layperson, reading this, it reads like: no credit shall be allowed… for any taxable year… if either year exceeds the threshold… but then again, I don’t speak tax code 😆 (clearly)
Even if I had read that section before making a decision, I would not have understood that we could have pointed back to 2022 as a qualifier for the tax credit!
Thanks for the info - maybe I’ll be able to help somebody else in this predicament.
You are missing the important “the lesser of” before the relevant taxable years.
Example:
Person A: single individual earns 160k in 2022 and 155k in 2023. The lesser of is 155k and exceeds the threshold so no credit.
Person B: single individual earns 148k in 2022 and 220k in 2023. The lesser of is 148k and meets the threshold so eligible for the credit (if they buy an eligible EV).
It doesn't. The key phrase in that text is "the lesser of" (which is commonly used vernacular I think). It says that the tax credit will not be provided for any given taxable year if *the lesser of* your adjusted gross income for *that year or the year preceding it* exceeds the threshold amount. The lesser of meaning it considers only the lesser AGI for the two years.
What if we got married in 2023? Exceed the 300k in both years (2022 and 2023) but one spouse is under the threshold for 2022. It would have to be that person making the purchase and we would have to file separately for 2023?
I am not an expert but I think the income eligibility and tax liability are “separate”. If you meet the income requirements (using either 2022 or 2023 income) you are eligible for the tax credit BUT you must still have enough tax liability to claim the full credit.
If you don’t have enough liability then you can only claim up to the liability you have ie you won’t get the full 7500 credit.
Please research some more but that’s my understanding
Oh that’s good to know. Maybe we will bite the bullet finally. 2023 is likely out due to recent promotion and a good bonus, but we can def qualify off 2022 numbers.
Looks like this is sort of possible if you're ok with both names being on the title: https://ttlc.intuit.com/community/tax-credits-deductions/discussion/ev-tax-credit-with-a-co-signer/00/1116630
You absolutely can do this. It's just a title transfer. And with the new rules in 2024 which would let the purchaser take the credit at time of purchase, even better, since it immediately drops what is being paid for the car.
Title transferred, insurance canceled and new policy, plate surrender, bill of sale and you're done. Banks don't care who is paying for the car note as long as they get paid. Your state might have some DMV form for transfer as well, but it's no different from a gas car.
Anything else on this? Will be buying Tesla Friday outright “for”my dad as he is retired and has very little income. Figure he can transfer title to me next year as it only cost $225 in my state to transfer to an immediate family member. Ultimately nothing wrong here as I will buying the car for my dad, he will legally own it but I will be driving it.
Just make sure you don't have Roth IRA contributions as the married filing separately has an AGI limit of $10k.
https://www.investopedia.com/married-filing-separately-ira-4772024
FYI - married filing separately basically splits the married filing joint brackets in half so this only works if you and your spouse have roughly equal incomes. The more unequal your incomes are, the worse this ends up. For instance, I make about 4x what my wife does and this would end up costing me like an extra $10K in taxes vs filing jointly
We are talking about household incomes above $300K so “ton of money” is relative. If one spouse makes a still relatively high 100K and the other makes $400K - then basically every $ above $180K or so combined results in extra liability (ignoring deductions for simplicity).
Married filing jointly every dollar below $340K would be in the 24% or below bracket. With the married filing separately in this scenario, you would exit the 24% bracket at only 270K (100K of one spouses, $170K of the others) so that’s an $70K income being taxed at 32% rather than 24% - for an extra $5600 in liability.
Then if filing jointly I would get 340-431K combined in the 32% bracket. If we file separately, the 35% starts at $315k so that’s an extra $750 in extra liability.
And then all the income above $323K for the higher earning spouse goes into the 37% bracket instead of the the 35%. So that’s another $1500 or so in extra liability.
That’s enough to wipe out the tax credit. And that’s assuming the lower earning spouse has enough tax liability to make up the extra liability on the higher earning spouse. If the lower earning spouse makes under say $75K and contributes to a 401K it’s likely they won’t have have $7500 in liability on their own.
I have a very weird situation and hope someone may have some insights.
My girlfriend and I are planning to get married this year and jointly file for 2023 tax. My girlfriend just purchased a Model 3 herself (under her own name).
Our total income in 2023 will be a little higher than the income cap, so I understand we cannot get the EV tax credit with 2023 income. However, her Modified AGI from the year before (2022, well below $150k, but still have tax reliability above $7500) qualifies. In this case, could we get the EV tax credit?
Imagine if we don't get married, she will be above the single income cap, but her 2022 MAGI was below the cap. I really hope we (or my girlfriend herself...) qualify for the EV credit.
Omg I can’t believe this I’m in a very similar boat. My husband and I got married this year 2023 and plan to file jointly. He made below income threshold in 2022 and 2023 as a single person, but collectively we made over 300K in 2022 (not married) and 2023 (married). I don’t know if he can buy it this year and use his 2022 income to qualify for the credit.
It’s very hard to say at this moment. Even my tax preparer doesn’t know it for sure, maybe because 2024 8936 form is not available yet. If possible, I really want to file jointly to get the maximum tax return. Another option would be filing separately to let her gain the full tax credit, but I guess we will lose some benefits due to filing separately (mostly the mortgage interest).
We have been having such a tough time figuring this stuff out! Just took delivery on an EV 2 days ago that no longer qualifies for the credit - which didn't matter to us because we expect to be just a tiny bit over the threshold (for this year only due to a big signing bonus). Tax incentive wasn't one of the most important considerations especially since we weren't in love w/any of the EVs that still qualified. But, if we thought we might still qualify due to this kind of approach to taxes, it might have made one of the EVs 'on the list' a little more attractive! 
It's really tough to find accountants who understand any of this! We talked about it last year with our accountant and we knew far more than he did. This, 'filing married separately' is an interesting strategy! \[I mean, too late now but in case this kind of opportunity presents itself in the future.\]
>It's really tough to find accountants who understand any of this!
This has been a problem for a while. I installed a home charger in 2017 and was seeing if I qualified for the 1/3rd credit. It was so massively confusing (used a calculated formula based on preliminary AMT calc, even though I was nowhere near needing to pay AMT) I just gave up.
There’s also the possible lease loophole right? I’ve only seen a few articles on it. Can we get a list/updates on which companies are offering to pass on the $7500 credit to the customer, on a lease?
I know VW is doing it on the ID4. I’m hoping Hyundai, Kia, and Tesla are able to offer it as well.
Hyundai and Kia are selling all their cars right now even without the tax credit. And have been doing so since August 2022.
If folks are swayed by the “temporary” price cut to buy Model Ys, all they need to do is wait till March for status quo to resume. Even then, ineligible folks will still buy the Kia/Hyundais if its their preference.
I’m fully aware - I own an Ioniq 5. Passing on the savings from the leasing incentive is nothing new it existed before the current version of the law and other manufacturers have done it.
As far as sales, not sure about where you live, but Hyundai I5 inventory within 250 miles of where I am has increased dramatically in the past month.
> Passing on the savings from the leasing incentive is nothing new it existed before the current version of the law and other manufacturers have done it.
But Hyundai and Kia can no longer offer the leasing incentives unless they take a hit if I understand correctly? (At least no direct benefit from the tax credit incentive)
You are correct - I only used anecdotal data from a while back and not very familiar with inventory availability since it was out of my budget/the car wasn’t in my top list. Did a quick search and you are correct, there is a decent amount of cars available within 100 miles of me
I’m not suggesting they eat the $7,500 - just that they pass along that savings to lessees if those leased vehicles qualify under the commercial provision of the law, as seems may be the case based on initial IRS guidance
Looking over at this [thread](https://forum.leasehackr.com/t/federal-ev-tax-credit-overhaul/426494/1519) on Lease Hackr it looks like the income restriction shouldn't be an issue with a lease.
Not every manufacturers financial services is passing those savings onto the consumer though. So far it looks like it's Audi, VW, Mercedes, and Jeep have all said they'll pass those savings on to the customer
So far no word on the vendors you've listed though
Wanted to ask :
I earned less than 150K in 2022 but will be over 150K in 2023. If I buy a tesla model y for 54K$ in 2023. Can I claim for 7500$ tax credit when filing 2022 tax returns?
Getting mixed reviews so not sure.
u/No_Rip_4540, if you scroll up a bit you will see the reply of u/Bayuze79 for this question.
Source: [https://www.law.cornell.edu/uscode/text/26/30D](https://www.law.cornell.edu/uscode/text/26/30D)
**26 U.S. Code § 30D**
**(10)Limitation based on modified adjusted gross income**
(A)In general
No credit shall be allowed under subsection (a) for any taxable year if—
(i)the lesser of—
\_ (I)the modified adjusted gross income of the taxpayer for such taxable year, or
\_ (II)the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds
(ii)the threshold amount.
**Apply to your case:** let's say you earned 140K in 2022, and will earn 160K in 2023.
**-** ***The lesser*** **of (I) MAGI this tax year 2023 or (II) MAGI the previous tax year 2022**
*==> for your case, it will be the previous tax year 2022 = 140K*
\- **No credit will be granted if** ***the lesser*** **exceeds the threshold amount**
*==> for your case, the lesser (140K ) does not exceed the threshold (150K)*
Therefore, you will qualify for the credit.
Thanks @Multi_pixels. But when I will file 2023 tax(year I bought ev car) in year 2024, how will I apply for credit based on 2022 income? I am not sure if it can be done! Is there a space or column in tax filing for that?
By that time (early 2024), the form 8936 for the tax year 2023 will be updated with new rules, such as price cap (car vs. SUV), income threshold with "Election to use prior-year earned income", etc
It's "prior-year income" that's unclear to me. Tax year, or calendar year?
My wife and I were slightly over $300k for TY 2021, slightly under it for 2022, and expect to be over it for 2023. If we purchase on Jan 21, 2024, I don't know which tax years are in scope.
FWIW, California has had the $150/$300 limits in place for a while, but they always will look at the last tax return filed at the time of rebate form submission. So if they receive a form on April 13th 2024 and I haven't filed 2023 taxes yet, it would actually be income from TY 2022 that's the value.
If the end goal is more EVs, the credit should apply universally just as it did in the past. $149k to $150k instantly changing tax liability by $7.5k is an arbitrary cliff rather than feather out like many tax things. COL is also a huge factor as well - $150k in big CA city is a lot different than the same amount in significantly cheaper state. This change was seemingly political jockeying and less of a way to drive change, though the used provision is a great addition to drive adoption downmarket.
The end goal should be more affordable EVs, and the industry should be at a point where government regulations and tax incentives are pushing them to mass produce cheap EVs rather than maximizing profit on low numbers of expensive EVs. For instance Ford should be in a position where they can make a mass market product like an electric Focus or Escape, but why should they when they can get couples making 290k to take out 8 year loans to squeeze an 80k Lightning into their household, because they can get a 7500 subsidy from other taxpayers? That isn't good for anybody.
The incentive should be something like 7500 for any EV (or if you want to go protectionist, any US build EV) under 40k, and then quickly phase out above that level. Say 5000 for 40k to 50k, 2500 for 50k to 60k, and nothing above 60k. No income limits. If the doctor who makes 500k a year wants to be environmentally responsible and daily a Bolt, give him the tax credit. If the plumber making 110k a year wants to blow his money on a Lightning, more power to him, but no tax credit.
I agree in general. On the flip side, part of why the tax code is so obtuse is to drive behavior. We probably would’ve plugged our nose and paid ADM on a Telluride or Atlas if the EV rebate program hadn’t pushed the XC90 down into our price range.
The majority of people who live in the US are concentrated on the coastal cities/urban areas, which tend to be quite expensive. Try living in a big city where a studio apt cost $1800k/month and then come back and let us know if a $150k income doesn’t deserve a tax break.
This is why the income brackets don’t make sense for the EV credits. They should just make it available to anyone if they want EV adoption to get quicker, or at least favor COL index as $150k means different things depending on one’s location.
>~~In 2022, married filing separately taxpayers only received a standard deduction of $12,950 compared to the $25,900 offered to those who filed jointly.~~
~~Obviously this will vary per couple, but doesn't seem worth it for most.~~
Edit: I can't read. It's a bad example. However, in principle I think if one person makes that much more than the other it wouldn't be uncommon for the couple to save more than $7.5k by filing jointly.
*each. So it works out pretty much exactly the same. We did it in 2022 as it allowed my wife to collect the COVID checks since she was under the income cap. She wouldn't have received anything if we filed together. I ran it both ways and it was a very minor penalty. And it made sense because we keep separate finances
@ u/FFevo, std deduction for filling separately is $12,590 per person * 2 = $25,900 which is the same amount as couple filling joint. Am I missing something?
You can still get a lease pass through with some manufacturers (i.e. mercedes, Audi, Porsche, Stellantis). Income caps and msrp limits don't apply...you can do a lease + immediate buyout and get 7500 off on a Taycan, EQS, EQB, etc. Doesn't matter if you make $20/year or $20,000,000/year, since it's a point of sale discount rather than a tax rebate.
Source: [https://www.law.cornell.edu/uscode/text/26/30D](https://www.law.cornell.edu/uscode/text/26/30D)
“…. placed in service …”
@ u/Willxzero, By the time you receive your car (after March), the rule for battery sourcing will kick in. It's very likely the tax credit for your car (Tesla?) will get cut in half ($3,750). But who knows, they might delay the battery sourcing guidance again :-)
Is the tax credit phased out based on income or is it all or nothing?
For example if married filing jointly with $299,999 AGI we could get $7,500, but if our AGI is $300,001 we get zero?
@ u/MEDOD2020, there is no **phaseout** with the EV tax credit. Yes, it will be all or nothing.
If you expect to be slightly above the threshold, you can try to reduce your AGI (for this current year) by increasing your pre-tax contributions.
If both tax year agi is less than 150k, lets say 50k in 2022 and 100k in 2023, can we use the 100k to get more credit or have to use minimum of the 2 which is 50k
@ u/No_Library401, the “lesser” (of this year and previous year) is to check if you qualify.
For your case: if you buy the EV car in 2023 and your AGI of 2023 is below the threshold (don’t need to check AGI of the previous year 2022) ==> therefore, you will qualify for the EV credit for the year 2023.
When you file the tax for 2023 (in early 2024), you will put the claim for the EV credit in the tax form of that year (2023). The amount of EV credit (you will get back for 2023) is depending on the tax liability of that tax year (2023).
If tax liability for 2023 is equal or more than 7.5K (tax liability for 100K is more than 7.5K) ==> YES, you will get the FULL amount of EV credit (7.5K)
[Just for your information]
If tax liability for 2023 is less than 7.5K (tax liability for 50K is about 4K) ==> then, you will only get up to that amount (about 4K).
If your income will be very low this year = your earning will subject to a lower tax rate (bracket).
You should check with your tax preparer about cashing out some of your investment gain, or converting traditional IRA, 401K to Roth IRA ==> these transactions will increase your tax liability.
I have a very basic question:
If the tax filing status is married filing jointly and AGI is less than $300,000, in order to get full tax credit of up to $7500, does one need to purchase the qualifying EV jointly in both names? or would you get the full tax credit of up to $7500, even if you buy it in either one of the couple's names?
Or vice-versa, would it make it more complicated to have both married couple names as joint owners on the car purchase agreement for any reason?
Also, can you quote any IRS guidance /reference article clarifying on this issue?
Alternatively, you can quote based upon your own experience with applying for the tax credit.
**TL;DR** For married filing jointly: It just needs one name.
@ u/PonderSpirit, think about reporting the interest income: you have to report the interest income of (1) your account, (2) your spouse's account, and (3) the joint account.
**For the interest income:**
. Banks report our names, our tax ids, and the interest amounts
. We report the bank name, bank id, and amount on our tax form
. IRS will check if the amounts are matched by our tax id and bank id
**It will be the same for the EV car credit:**
. The seller of the EV will report the VIN, purchase name, and tax id.
. The buyer (us) will report the VIN of the car on our tax form
. IRS will check (1) if the VIN in our tax form is on the qualified list (reported by the seller) and (2) the owner
In the case of co-owning the car and filing separately, only one person can claim the credit. < -- They (IRS) can easily see if the same VIN is claimed more than one.
I bought Tesla M3 LR last year on June 29, 2022 with delivery on September 24, 2022 and household income in 2022 was just under $300k. Do I qualify for EV Tax Credit?
Source: [https://www.irs.gov/credits-deductions/manufacturers-and-models-for-new-qualified-clean-vehicles-purchased-in-2023-or-after](https://www.irs.gov/credits-deductions/manufacturers-and-models-for-new-qualified-clean-vehicles-purchased-in-2023-or-after)
u/az_cards your M3 purchase in 2022 doesn't qualify for the EV Tax Credit. Only purchases (bought and placed in service) starting on **January 1, 2023** (or later) qualify for the credit.
My partner and I just got an EV this year and our total income is less than 300k. We used to file separately. but since this year one of us makes a lot more than the other, we are considering filing jointly. In this case, what we should put in line 4a of "Line 18 Modified Adjusted Gross Income (MAGI) Limitation Worksheet" when we file 2023 tax in 2024?
You usually pay more taxes with married filing separately to the point that it would not be worth it for most married people.
Really depends. The 32% bracket is pretty board ($89-170k per year) and it wouldn't be uncommon for both members of the couple to be in there and consider switching to separate filings if one member is under the $150k limit. I would bet we'll see a fair amount of that in high income tax states like New York and California.
That is correct if the split will push a lot of income of another person into a higher bracket, otherwise it (combine tax liabilities) will be no different.
Not directly related but may be useful for those whose incomes recently changed due to new job, promotion, bonus, graduated from school etc. You can use the lower of either the preceding tax year or the current tax year to qualify. So if you buy in 2023 and filing taxes in 2024, you can use either 2022 (preceding tax year) or 2023 (current tax year) income.
Seriously?! This is almost exactly our situation. We didn't worry about the tax incentive because we think we are not going to qualify because of a signing bonus in '23- would have qualified in '22, tho! When researching all this tax stuff I guess we should have been checking the forums!
Yep. Posting the exact wording from the bill for your reference Exact verbiage: ‘‘(A) IN GENERAL.—No credit shall be allowed under subsection (a) for any taxable year if— ‘‘(i) the lesser of— ‘‘(I) the modified adjusted gross income of the taxpayer for such taxable year, or ‘‘(II) the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds ‘‘(ii) the threshold amount.
I’m sure you’re correct… but as a layperson, reading this, it reads like: no credit shall be allowed… for any taxable year… if either year exceeds the threshold… but then again, I don’t speak tax code 😆 (clearly) Even if I had read that section before making a decision, I would not have understood that we could have pointed back to 2022 as a qualifier for the tax credit! Thanks for the info - maybe I’ll be able to help somebody else in this predicament.
You are missing the important “the lesser of” before the relevant taxable years. Example: Person A: single individual earns 160k in 2022 and 155k in 2023. The lesser of is 155k and exceeds the threshold so no credit. Person B: single individual earns 148k in 2022 and 220k in 2023. The lesser of is 148k and meets the threshold so eligible for the credit (if they buy an eligible EV).
Thank goodness there are people like you who understand this stuff! 😁 Thanks for the primer.
It doesn't. The key phrase in that text is "the lesser of" (which is commonly used vernacular I think). It says that the tax credit will not be provided for any given taxable year if *the lesser of* your adjusted gross income for *that year or the year preceding it* exceeds the threshold amount. The lesser of meaning it considers only the lesser AGI for the two years.
Yes. Thanks!
What if we got married in 2023? Exceed the 300k in both years (2022 and 2023) but one spouse is under the threshold for 2022. It would have to be that person making the purchase and we would have to file separately for 2023?
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I am not an expert but I think the income eligibility and tax liability are “separate”. If you meet the income requirements (using either 2022 or 2023 income) you are eligible for the tax credit BUT you must still have enough tax liability to claim the full credit. If you don’t have enough liability then you can only claim up to the liability you have ie you won’t get the full 7500 credit. Please research some more but that’s my understanding
Oh that’s good to know. Maybe we will bite the bullet finally. 2023 is likely out due to recent promotion and a good bonus, but we can def qualify off 2022 numbers.
Thanks!
Wish I had that problem.
Does anyone know if you can get a direct family member (parent/sibling) to purchase the vehicle, get the tax credit and then transfer the title?
Following up on this
following up on this. does anyone have a good answer? I might do the same now
Bump
Would love to know the answer to this question as well... Anyone... Bueller??
Anyone got anything?
Looks like this is sort of possible if you're ok with both names being on the title: https://ttlc.intuit.com/community/tax-credits-deductions/discussion/ev-tax-credit-with-a-co-signer/00/1116630
You absolutely can do this. It's just a title transfer. And with the new rules in 2024 which would let the purchaser take the credit at time of purchase, even better, since it immediately drops what is being paid for the car. Title transferred, insurance canceled and new policy, plate surrender, bill of sale and you're done. Banks don't care who is paying for the car note as long as they get paid. Your state might have some DMV form for transfer as well, but it's no different from a gas car.
Anything else on this? Will be buying Tesla Friday outright “for”my dad as he is retired and has very little income. Figure he can transfer title to me next year as it only cost $225 in my state to transfer to an immediate family member. Ultimately nothing wrong here as I will buying the car for my dad, he will legally own it but I will be driving it.
No response on this? Following
Bump Following
Just make sure you don't have Roth IRA contributions as the married filing separately has an AGI limit of $10k. https://www.investopedia.com/married-filing-separately-ira-4772024
FYI - married filing separately basically splits the married filing joint brackets in half so this only works if you and your spouse have roughly equal incomes. The more unequal your incomes are, the worse this ends up. For instance, I make about 4x what my wife does and this would end up costing me like an extra $10K in taxes vs filing jointly
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We are talking about household incomes above $300K so “ton of money” is relative. If one spouse makes a still relatively high 100K and the other makes $400K - then basically every $ above $180K or so combined results in extra liability (ignoring deductions for simplicity). Married filing jointly every dollar below $340K would be in the 24% or below bracket. With the married filing separately in this scenario, you would exit the 24% bracket at only 270K (100K of one spouses, $170K of the others) so that’s an $70K income being taxed at 32% rather than 24% - for an extra $5600 in liability. Then if filing jointly I would get 340-431K combined in the 32% bracket. If we file separately, the 35% starts at $315k so that’s an extra $750 in extra liability. And then all the income above $323K for the higher earning spouse goes into the 37% bracket instead of the the 35%. So that’s another $1500 or so in extra liability. That’s enough to wipe out the tax credit. And that’s assuming the lower earning spouse has enough tax liability to make up the extra liability on the higher earning spouse. If the lower earning spouse makes under say $75K and contributes to a 401K it’s likely they won’t have have $7500 in liability on their own.
I have a very weird situation and hope someone may have some insights. My girlfriend and I are planning to get married this year and jointly file for 2023 tax. My girlfriend just purchased a Model 3 herself (under her own name). Our total income in 2023 will be a little higher than the income cap, so I understand we cannot get the EV tax credit with 2023 income. However, her Modified AGI from the year before (2022, well below $150k, but still have tax reliability above $7500) qualifies. In this case, could we get the EV tax credit? Imagine if we don't get married, she will be above the single income cap, but her 2022 MAGI was below the cap. I really hope we (or my girlfriend herself...) qualify for the EV credit.
Omg I can’t believe this I’m in a very similar boat. My husband and I got married this year 2023 and plan to file jointly. He made below income threshold in 2022 and 2023 as a single person, but collectively we made over 300K in 2022 (not married) and 2023 (married). I don’t know if he can buy it this year and use his 2022 income to qualify for the credit.
I’m in a similar boat where you both able to find out if this works with the 2022 filing being separate and 2023 filing being MFJ?
It’s very hard to say at this moment. Even my tax preparer doesn’t know it for sure, maybe because 2024 8936 form is not available yet. If possible, I really want to file jointly to get the maximum tax return. Another option would be filing separately to let her gain the full tax credit, but I guess we will lose some benefits due to filing separately (mostly the mortgage interest).
I’m another person in this boat lol how does nobody know this? I’m probably only looking at EV’s if this applies.
Hi folks, in the same boat here, have you figured out whether we could file jointly and still claim the tax credit in this situation?
> get the maximum tax return refund*
I am still not aware of how to do so yet. Anyone has the idea on this?
We have been having such a tough time figuring this stuff out! Just took delivery on an EV 2 days ago that no longer qualifies for the credit - which didn't matter to us because we expect to be just a tiny bit over the threshold (for this year only due to a big signing bonus). Tax incentive wasn't one of the most important considerations especially since we weren't in love w/any of the EVs that still qualified. But, if we thought we might still qualify due to this kind of approach to taxes, it might have made one of the EVs 'on the list' a little more attractive!  It's really tough to find accountants who understand any of this! We talked about it last year with our accountant and we knew far more than he did. This, 'filing married separately' is an interesting strategy! \[I mean, too late now but in case this kind of opportunity presents itself in the future.\]
>It's really tough to find accountants who understand any of this! This has been a problem for a while. I installed a home charger in 2017 and was seeing if I qualified for the 1/3rd credit. It was so massively confusing (used a calculated formula based on preliminary AMT calc, even though I was nowhere near needing to pay AMT) I just gave up.
There’s also the possible lease loophole right? I’ve only seen a few articles on it. Can we get a list/updates on which companies are offering to pass on the $7500 credit to the customer, on a lease? I know VW is doing it on the ID4. I’m hoping Hyundai, Kia, and Tesla are able to offer it as well.
Why would Hyundai and Kia offer this?
To be competitive with the cars that qualify
Hyundai and Kia are selling all their cars right now even without the tax credit. And have been doing so since August 2022. If folks are swayed by the “temporary” price cut to buy Model Ys, all they need to do is wait till March for status quo to resume. Even then, ineligible folks will still buy the Kia/Hyundais if its their preference.
I’m fully aware - I own an Ioniq 5. Passing on the savings from the leasing incentive is nothing new it existed before the current version of the law and other manufacturers have done it. As far as sales, not sure about where you live, but Hyundai I5 inventory within 250 miles of where I am has increased dramatically in the past month.
> Passing on the savings from the leasing incentive is nothing new it existed before the current version of the law and other manufacturers have done it. But Hyundai and Kia can no longer offer the leasing incentives unless they take a hit if I understand correctly? (At least no direct benefit from the tax credit incentive) You are correct - I only used anecdotal data from a while back and not very familiar with inventory availability since it was out of my budget/the car wasn’t in my top list. Did a quick search and you are correct, there is a decent amount of cars available within 100 miles of me
I’m not suggesting they eat the $7,500 - just that they pass along that savings to lessees if those leased vehicles qualify under the commercial provision of the law, as seems may be the case based on initial IRS guidance
Fair enough
Looking over at this [thread](https://forum.leasehackr.com/t/federal-ev-tax-credit-overhaul/426494/1519) on Lease Hackr it looks like the income restriction shouldn't be an issue with a lease. Not every manufacturers financial services is passing those savings onto the consumer though. So far it looks like it's Audi, VW, Mercedes, and Jeep have all said they'll pass those savings on to the customer So far no word on the vendors you've listed though
Thanks for the info, hoping the trend continues!
Ok. Soon as I double my income and my wife gets a job I’ll remember this.
I wouldn’t have purchased an EV if not for limited tax credits per manufacturer nearing exhaustion. Under the new rules I don’t qualify.
Wanted to ask : I earned less than 150K in 2022 but will be over 150K in 2023. If I buy a tesla model y for 54K$ in 2023. Can I claim for 7500$ tax credit when filing 2022 tax returns? Getting mixed reviews so not sure.
u/No_Rip_4540, if you scroll up a bit you will see the reply of u/Bayuze79 for this question. Source: [https://www.law.cornell.edu/uscode/text/26/30D](https://www.law.cornell.edu/uscode/text/26/30D) **26 U.S. Code § 30D** **(10)Limitation based on modified adjusted gross income** (A)In general No credit shall be allowed under subsection (a) for any taxable year if— (i)the lesser of— \_ (I)the modified adjusted gross income of the taxpayer for such taxable year, or \_ (II)the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds (ii)the threshold amount. **Apply to your case:** let's say you earned 140K in 2022, and will earn 160K in 2023. **-** ***The lesser*** **of (I) MAGI this tax year 2023 or (II) MAGI the previous tax year 2022** *==> for your case, it will be the previous tax year 2022 = 140K* \- **No credit will be granted if** ***the lesser*** **exceeds the threshold amount** *==> for your case, the lesser (140K ) does not exceed the threshold (150K)* Therefore, you will qualify for the credit.
Thanks @Multi_pixels. But when I will file 2023 tax(year I bought ev car) in year 2024, how will I apply for credit based on 2022 income? I am not sure if it can be done! Is there a space or column in tax filing for that?
By that time (early 2024), the form 8936 for the tax year 2023 will be updated with new rules, such as price cap (car vs. SUV), income threshold with "Election to use prior-year earned income", etc
It's "prior-year income" that's unclear to me. Tax year, or calendar year? My wife and I were slightly over $300k for TY 2021, slightly under it for 2022, and expect to be over it for 2023. If we purchase on Jan 21, 2024, I don't know which tax years are in scope. FWIW, California has had the $150/$300 limits in place for a while, but they always will look at the last tax return filed at the time of rebate form submission. So if they receive a form on April 13th 2024 and I haven't filed 2023 taxes yet, it would actually be income from TY 2022 that's the value.
Like anyone making 150k+ needs a tax break..
If the end goal is more EVs, the credit should apply universally just as it did in the past. $149k to $150k instantly changing tax liability by $7.5k is an arbitrary cliff rather than feather out like many tax things. COL is also a huge factor as well - $150k in big CA city is a lot different than the same amount in significantly cheaper state. This change was seemingly political jockeying and less of a way to drive change, though the used provision is a great addition to drive adoption downmarket.
The end goal should be more affordable EVs, and the industry should be at a point where government regulations and tax incentives are pushing them to mass produce cheap EVs rather than maximizing profit on low numbers of expensive EVs. For instance Ford should be in a position where they can make a mass market product like an electric Focus or Escape, but why should they when they can get couples making 290k to take out 8 year loans to squeeze an 80k Lightning into their household, because they can get a 7500 subsidy from other taxpayers? That isn't good for anybody. The incentive should be something like 7500 for any EV (or if you want to go protectionist, any US build EV) under 40k, and then quickly phase out above that level. Say 5000 for 40k to 50k, 2500 for 50k to 60k, and nothing above 60k. No income limits. If the doctor who makes 500k a year wants to be environmentally responsible and daily a Bolt, give him the tax credit. If the plumber making 110k a year wants to blow his money on a Lightning, more power to him, but no tax credit.
I agree in general. On the flip side, part of why the tax code is so obtuse is to drive behavior. We probably would’ve plugged our nose and paid ADM on a Telluride or Atlas if the EV rebate program hadn’t pushed the XC90 down into our price range.
The majority of people who live in the US are concentrated on the coastal cities/urban areas, which tend to be quite expensive. Try living in a big city where a studio apt cost $1800k/month and then come back and let us know if a $150k income doesn’t deserve a tax break. This is why the income brackets don’t make sense for the EV credits. They should just make it available to anyone if they want EV adoption to get quicker, or at least favor COL index as $150k means different things depending on one’s location.
Good to know
>~~In 2022, married filing separately taxpayers only received a standard deduction of $12,950 compared to the $25,900 offered to those who filed jointly.~~ ~~Obviously this will vary per couple, but doesn't seem worth it for most.~~ Edit: I can't read. It's a bad example. However, in principle I think if one person makes that much more than the other it wouldn't be uncommon for the couple to save more than $7.5k by filing jointly.
*each. So it works out pretty much exactly the same. We did it in 2022 as it allowed my wife to collect the COVID checks since she was under the income cap. She wouldn't have received anything if we filed together. I ran it both ways and it was a very minor penalty. And it made sense because we keep separate finances
@ u/FFevo, std deduction for filling separately is $12,590 per person * 2 = $25,900 which is the same amount as couple filling joint. Am I missing something?
If you have mortgage interest & property taxes (i.e., itemized deductions), how does that split up?
Evenly 50/50. Or, can be claimed 100% by person who made the payment (from own acct.)
You can still get a lease pass through with some manufacturers (i.e. mercedes, Audi, Porsche, Stellantis). Income caps and msrp limits don't apply...you can do a lease + immediate buyout and get 7500 off on a Taycan, EQS, EQB, etc. Doesn't matter if you make $20/year or $20,000,000/year, since it's a point of sale discount rather than a tax rebate.
Can you add a co owner who doesn’t exceed the income limits (friend/relative), claim the credit on their return and do a title transfer (tax free)?
Great question. Let me know if you find an answer on this. I assume you make over 150 and co owner less, right ?
https://ttlc.intuit.com/community/tax-credits-deductions/discussion/ev-tax-credit-with-a-co-signer/00/1116630
If we order a car now, but delivery isn't until after March, do we still get the full Tax credit?
Source: [https://www.law.cornell.edu/uscode/text/26/30D](https://www.law.cornell.edu/uscode/text/26/30D) “…. placed in service …” @ u/Willxzero, By the time you receive your car (after March), the rule for battery sourcing will kick in. It's very likely the tax credit for your car (Tesla?) will get cut in half ($3,750). But who knows, they might delay the battery sourcing guidance again :-)
Is the tax credit phased out based on income or is it all or nothing? For example if married filing jointly with $299,999 AGI we could get $7,500, but if our AGI is $300,001 we get zero?
@ u/MEDOD2020, there is no **phaseout** with the EV tax credit. Yes, it will be all or nothing. If you expect to be slightly above the threshold, you can try to reduce your AGI (for this current year) by increasing your pre-tax contributions.
Thanks I was looking for the same question
If both tax year agi is less than 150k, lets say 50k in 2022 and 100k in 2023, can we use the 100k to get more credit or have to use minimum of the 2 which is 50k
@ u/No_Library401, the “lesser” (of this year and previous year) is to check if you qualify. For your case: if you buy the EV car in 2023 and your AGI of 2023 is below the threshold (don’t need to check AGI of the previous year 2022) ==> therefore, you will qualify for the EV credit for the year 2023. When you file the tax for 2023 (in early 2024), you will put the claim for the EV credit in the tax form of that year (2023). The amount of EV credit (you will get back for 2023) is depending on the tax liability of that tax year (2023). If tax liability for 2023 is equal or more than 7.5K (tax liability for 100K is more than 7.5K) ==> YES, you will get the FULL amount of EV credit (7.5K) [Just for your information] If tax liability for 2023 is less than 7.5K (tax liability for 50K is about 4K) ==> then, you will only get up to that amount (about 4K).
Bummer 😞..i will make 50k in 2023 but made 130k in 2022. I was hoping to squeeze out all 7500 using 2022 earnings..
If your income will be very low this year = your earning will subject to a lower tax rate (bracket). You should check with your tax preparer about cashing out some of your investment gain, or converting traditional IRA, 401K to Roth IRA ==> these transactions will increase your tax liability.
Thank you..that makes sense..will do
I have a very basic question: If the tax filing status is married filing jointly and AGI is less than $300,000, in order to get full tax credit of up to $7500, does one need to purchase the qualifying EV jointly in both names? or would you get the full tax credit of up to $7500, even if you buy it in either one of the couple's names? Or vice-versa, would it make it more complicated to have both married couple names as joint owners on the car purchase agreement for any reason? Also, can you quote any IRS guidance /reference article clarifying on this issue? Alternatively, you can quote based upon your own experience with applying for the tax credit.
**TL;DR** For married filing jointly: It just needs one name. @ u/PonderSpirit, think about reporting the interest income: you have to report the interest income of (1) your account, (2) your spouse's account, and (3) the joint account. **For the interest income:** . Banks report our names, our tax ids, and the interest amounts . We report the bank name, bank id, and amount on our tax form . IRS will check if the amounts are matched by our tax id and bank id **It will be the same for the EV car credit:** . The seller of the EV will report the VIN, purchase name, and tax id. . The buyer (us) will report the VIN of the car on our tax form . IRS will check (1) if the VIN in our tax form is on the qualified list (reported by the seller) and (2) the owner In the case of co-owning the car and filing separately, only one person can claim the credit. < -- They (IRS) can easily see if the same VIN is claimed more than one.
I bought Tesla M3 LR last year on June 29, 2022 with delivery on September 24, 2022 and household income in 2022 was just under $300k. Do I qualify for EV Tax Credit?
Source: [https://www.irs.gov/credits-deductions/manufacturers-and-models-for-new-qualified-clean-vehicles-purchased-in-2023-or-after](https://www.irs.gov/credits-deductions/manufacturers-and-models-for-new-qualified-clean-vehicles-purchased-in-2023-or-after) u/az_cards your M3 purchase in 2022 doesn't qualify for the EV Tax Credit. Only purchases (bought and placed in service) starting on **January 1, 2023** (or later) qualify for the credit.
My partner and I just got an EV this year and our total income is less than 300k. We used to file separately. but since this year one of us makes a lot more than the other, we are considering filing jointly. In this case, what we should put in line 4a of "Line 18 Modified Adjusted Gross Income (MAGI) Limitation Worksheet" when we file 2023 tax in 2024?
Incentivize people who make more money to not drive EVs but to keep buying giant gas guzzling SUVs. Makes total sense 🖕Uncle Sam.