: Is 2013 Volt eligible for full $7500 Federal tax credit?



KnoxVolt
09-13-2012, 12:44 AM
When quizzed, my accountant offered the following which implies my new 2013 Volt might not be eligible for the full $7500 Federal tax credit. Close, but not the full load...


The credit (up to a max. of $7500) can be utilized to offset regular and AMT tax. After the first $2500 credit there is a $417 credit for each kw hour of capacity in excess of 5 kw hours but not to exceed $5000; thus the max of $7500 combined.

I'm not sure where he got those details but when I do the math (as I understand it), it comes out a bit short of the potential $7500 tax credit. According to his information...

$2500 base credit
+$4587 ($417 for each kw hour capacity beyond 5kw <Volt 16kw minus 5kw = 11x$417>)
$7087 total Federal tax credit?

He also said this which I do not fully understand. :confused:

The credit is not refundable and can only reduce the regular and AMT tax.
Does this mean that if I paid my taxes throughout the year and don't have any refund coming, I can't get the $7500 "refunded". Do I need to leave at least $7500 of my tax liability unpaid in order to claim the credit?

I hate taxes... :mad:

MrEnergyCzar
09-13-2012, 12:56 AM
That battery is 16.5 KWH not 16.....

I believe you just need to earn enough (roughly 80K or more) to have a 7,500 tax liability in the first place regardless if you paid it or not during the year. If you don't pay it during the year and without the credit "owe" 7,500 in taxes, then the Volt credit will negate that and you'd own nothing.... if you pay it during the year, then you'd get it back. It has to be originally titled to you though. Consult a professional of course.

MrEnergyCzar

KnoxVolt
09-13-2012, 01:22 AM
That battery is 16.5 KWH not 16.....Ok, even with that last .5 kwh accounted for it comes up a little bit short of the full potential $7500 tax credit, it seems.


I believe you just need to earn enough (roughly 80K or more) to have a 7,500 tax liability in the first place regardless if you paid it or not during the year.Ok, not a problem for me to meet that minimum tax liability to offset the tax credit. Thanks for clarifying. It just made me uncomfortable seeing the wording he used, "The credit is not refundable". I vaguely recall seeing that wording somewhere before related to these tax credits. Doesn't make sense to me.

Ladogaboy
09-13-2012, 01:29 AM
I believe you just need to earn enough (roughly 80K or more) to have a 7,500 tax liability in the first place regardless if you paid it or not during the year.

Yeah, I might need to check on that. As I remember, my tax liability was about $6,900, and I make quiet a bit less than $80,000 a year.

Zod
09-13-2012, 01:40 AM
You can find everything you need here: http://www.fueleconomy.gov/feg/taxevb.shtml

In short, yes, your 2013 Volt is elegible for the full $7500. It's $2500, plus $417 for each kWh over 4 kWh. That's why the Volt's battery is 16 kWh (2500 + 417*12 = 7504). Actually, the 2013 Volt is up to 16.5 kWh, but the credit maxes out at $7500.

Re: "refundable". In taxes, the term "refundable" means money IN EXCESS of your tax liability (how much you owe, before taking into account how much you already paid). So if your total tax liability was only $5000, and you paid exactly $5000, you would get only $5000 back (i.e. not $7500). As long as you have $7500 in liability or more, you're all set.

I find the fact that it's not refundable to be very unfortunate, because it actually means a bigger tax break for those who make more money.

Blastphemy
09-13-2012, 01:57 AM
I believe you just need to earn enough (roughly 80K or more) to have a 7,500 tax liability in the first place regardless if you paid it or not during the year.

Whoa! That's way more than you have to make in order to enjoy the full $7,500 tax credit!

A single person needs a taxable income of $45,880 while a married couple (filing jointly) needs a taxable income of $55,800.

'Taxable income' means your income after all deductions have been applied. You can choose to take a standard deduction (I think around $5,800 for single and $11,600 for married) or you can itemize your deductions. There are also exemptions than can apply.

SINGLE MATH: If you're single, then on the first $8,700 you pay $870 tax (10%); from $8,700 to $35,350 you pay $3,997.50 tax (15%); and from $35,350 to $45,880 you pay $2,632.50 tax (25%); for a total of $7,500 ($870 + $3,997.50 + $2,632.50).

MARRIED MATH: If you're married filing jointly, then on the first $17,400 you pay $1,740 tax (10%) and from $17,400 to $55,800 you pay $5,760 tax (15%); for a total of $7,500 ($1,740 + $5,760).

So if your single taxable income was exactly $45,880 and you bought (not leased) an eligible Volt in 2012, you wouldn't pay any tax for 2012 because the $7,500 Federal tax credit would cancel out the $7,500 owed.

As another example, if you're married and earn $55,800 but then take the $11,600 standard deduction, you wouldn't be able to get the full $7,500 tax credit benefit from the Volt because your taxable income would be $44,200. At that level of taxable income, you'd only be able to take a $5,760 credit to zero out your tax liability ($1,740 + $4,020).

Final example: if you're married and earn $67,400 then take the $11,600 standard deduction, your taxable income would be $55,800, giving you the full benefit of the $7,500 tax credit. In this simplified example, you'd owe $0 in taxes for 2012. If you paid taxes through your employer during the year (or paid estimated taxes), you'd get a tax refund after filing your 2012 tax returns.

Regardless, after applying all your deductions, if you arrive at a taxable income higher than $45,880/$55,800, then you'll be able to take the full $7,500 tax credit.

Cord
09-13-2012, 02:33 AM
Plug in the number to an old of free version of turbotax. There are a LOTs of way to owe more taxes.
With no new tax law change the the ending of the credit is after x cars are sold.

As posted:
"The credits begin phasing out for each manufacturer after it has sold 200,000 models of each car."

stephent
09-13-2012, 02:43 AM
The IRS regs are here:
http://www.irs.gov/Businesses/Plug-In-Electric-Vehicle-Credit-%28IRC-30-and-IRC-30D%29
list of eligible vehicles here:
http://www.irs.gov/Businesses/Qualified-Vehicles-Acquired-after-12-31-2009
If you click on the GM link you'll see credit amount is $7500.

If you read the reg carefully, it's $2500, + $417 for being at least 5 kw-hr, then additional $417 for each kw-hr over 5. So $2500 + $417 + $417 * 11 = $7504, credit capped at $7500. GM of course lobbied to get the credit to max out for the car they were designing!



Whoa! That's way more than you have to make in order to enjoy the full $7,500 tax credit!

It depends. One might start with a base income of around 80k, but if you take out max 401(k) deduction, a large mortgage deduction + property tax deduction, it's not difficult to drop your AGI to the point where you aren't getting the full credit. Especially in CA with massive housing costs & large property tax bills!

Ladogaboy
09-13-2012, 03:49 AM
Numbers...

Yeah, that's more in line with the numbers I remembered.

jbfalaska
09-13-2012, 10:32 AM
As long as you owe in $7500, you can get the amount refunded. That means after all other credits, etc., For example, even after all my deducations, sucha s two personal exemptions, kids, Hope scholoraship fund for my daughter etc., my tax bill would still be $17,000. I can then get the full refund. Yes, the car will land you a $7500 refund. When the code was first set up, the only car they had available to et the refund levels at was the Volt. So they used the baseline of a 16KW battery. GM is alread slightly larger, and of course the Tesla and Fisker went well beyond that battery size.

doudis2
09-13-2012, 11:20 AM
Maybe this was stated somewhere, but I have not seen it. You all keep worrying about getting the full credit in just one year; am I missing something? I always thought credits could carry over to the next year? Is that not true for this particular credit?

Gary Norton
09-13-2012, 11:58 AM
Ignore all of the discussion about how much you have to earn. Simply look at last year's tax return. If you had a tax liability to the federal government in excess of $7500 and your situation has not dramatically changed this year, you will benefit from the full $7500 tax credit. It has nothing to do with how much was withheld from your paycheck. It only has to do with the amount of taxes you owe based on your 2012 income.

Here is the difference between a refundable and a nonrefundable tax credit. A nonrefundable tax credit like this one, means you will only get the benefit of the credit up to the amount of the taxes you owe. A refund double tax credit means that if your tax liability is less than the amount of the credit, the government will send you a check for the difference.

davidl
09-13-2012, 12:35 PM
Whoa! That's way more than you have to make in order to enjoy the full $7,500 tax credit!

A single person needs an adjusted gross income of $45,880 while a married couple (filing jointly) needs an adjusted gross income of $55,800.

'Adjusted gross income' means your income after all deductions have been applied. You can choose to take a standard deduction (I think around $5,800 for single and $11,600 for married) or you can itemize your deductions.

SINGLE MATH: If you're single, then on the first $8,700 you pay $870 tax (10%); from $8,700 to $35,350 you pay $3,997.50 tax (15%); and from $35,350 to $45,880 you pay $2,632.50 tax (25%); for a total of $7,500 ($870 + $3,997.50 + $2,632.50).

MARRIED MATH: If you're married filing jointly, then on the first $17,400 you pay $1,740 tax (10%) and from $17,400 to $55,800 you pay $5,760 tax (15%); for a total of $7,500 ($1,740 + $5,760).

So if your single adjusted gross income was exactly $45,880 and you bought (not leased) an eligible Volt in 2012, you wouldn't pay any tax for 2012 because the $7,500 Federal tax credit would cancel out the $7,500 owed.

As another example, if you're married and earn $55,800 but then take the $11,600 standard deduction, you wouldn't be able to get the full $7,500 tax credit benefit from the Volt because your adjusted gross income would be $44,200. At that level of adjusted income, you'd only be able to take a $5,760 credit to zero out your tax liability ($1,740 + $4,020).

Regardless, after applying all your deductions, if you arrive at a gross income higher than $45,880/$55,800, then you'll be able to take the full $7,500 tax credit.


Not quite correct--your numbers need to be based off of taxable income, not AGI. AGI is not accurate because you'll be taking deductions (either standard or itemized) and exemptions. There are probably other factors involved that I as a non-tax-professional am not taking into account. In short, there is no magic number--you'll either need to run your own situation through the appropriate tax software or talk to your local tax professional.

mwfromva
09-13-2012, 01:30 PM
You can find everything you need here: http://www.fueleconomy.gov/feg/taxevb.shtml

In short, yes, your 2013 Volt is elegible for the full $7500. It's $2500, plus $417 for each kWh over 4 kWh. That's why the Volt's battery is 16 kWh (2500 + 417*12 = 7504). Actually, the 2013 Volt is up to 16.5 kWh, but the credit maxes out at $7500.


Thanks for the figures. You can't find the new Ford Fusion Energi's battery size on the internet (at least I couldn't) but I did find somewhere where Ford stated it would qualify for a $3750 rebate. Using your numbers, $3750-$2500=1250. $1250/$417=3. So 4kwh+3kwh=7kwh battery size for the Ford Fusion Energi.

The new Accord Plug in has a 6.75kwh battery so the Fusion's range should be similar - 14-16 miles (unlike the claimed 20 I have seen in several articles).

Blastphemy
09-13-2012, 01:50 PM
Not quite correct--your numbers need to be based off of taxable income, not AGI. AGI is not accurate because you'll be taking deductions (either standard or itemized) and exemptions. There are probably other factors involved that I as a non-tax-professional am not taking into account. In short, there is no magic number--you'll either need to run your own situation through the appropriate tax software or talk to your local tax professional.
You're right - I meant 'taxable income', not 'adjusted gross income'. My brain was asleep when I first posted that, and I was even more tired when I corrected it 30 minutes later. So while I fixed all the other errors, I completely missed that I used the wrong term.

So if your taxable income as a single filer is more than $45,880 or your taxable income as a married filing jointly filer is more than $55,800 then you'll get the full benefit of the $7,500 Federal tax credit.


Maybe this was stated somewhere, but I have not seen it. You all keep worrying about getting the full credit in just one year; am I missing something? I always thought credits could carry over to the next year? Is that not true for this particular credit?
No, this tax credit does not carry over.


Ignore all of the discussion about how much you have to earn. Simply look at last year's tax return. If you had a tax liability to the federal government in excess of $7500 and your situation has not dramatically changed this year, you will benefit from the full $7500 tax credit.
Right on!

loclay
09-13-2012, 02:17 PM
The IRS regs are here:
http://www.irs.gov/Businesses/Plug-In-Electric-Vehicle-Credit-%28IRC-30-and-IRC-30D%29
list of eligible vehicles here:
http://www.irs.gov/Businesses/Qualified-Vehicles-Acquired-after-12-31-2009
If you click on the GM link you'll see credit amount is $7500.

fwiw the IRS site does not list MY2013 as eligible. I suppose it will be eligible and it will show up, but as of now MY2013 is not listed.

vampirediaries
09-16-2012, 12:59 AM
As of right now, there is no talk about tax incentives for the 2013 Volt. Just the 2011 and 2012 currently.

Ladogaboy
09-16-2012, 03:54 AM
So 4kwh+3kwh=7kwh battery size for the Ford Fusion Energi.

The new Accord Plug in has a 6.75kwh battery so the Fusion's range should be similar - 14-16 miles (unlike the claimed 20 I have seen in several articles).

Based on initial estimates of 98 mpge and an AER of 20 miles, a 7 kWh for the Energi sounds about right. But let's be realistic. If they are accounting for charging losses and only using 80% of the battery's capacity, they are counting on the Energi getting about 250W/mile. I'm sure some people might get that, but I'm not sure how many.

The Accord plug in's estimated 15-mile AER sounds much more realistic to me at ~ 330W/mile.

RScott
09-16-2012, 08:17 AM
As of right now, there is no talk about tax incentives for the 2013 Volt. Just the 2011 and 2012 currently.

Talk is irrelevant; many times people have heard things from dealers that were completely untrue.

Although the IRS does publish a list of qualified vehicles, that's irrelevant. Form 8936 states that the manufacturer can claim that the car qualifies, in which case you can take the credit. The only case where that would not apply is if the IRS withdraws the qualification before the date you bought the car. And this isn't obscure information, or "I read it on the Internet" information; it's right on Form 8936.

So yes, since Chevrolet states that the 2013 Volt qualifies, it does, unless the IRS revokes it.

Ladogaboy
09-16-2012, 04:17 PM
So yes, since Chevrolet states that the 2013 Volt qualifies, it does, unless the IRS revokes it.

And those revocations normally are announced the preceding tax year and take effect the following year, correct?