I have some question on the gov $7500 rebate.
a) I know if I lease the Volt that the dealer gets/takes the rebate. But if I buy the Volt, how does it work? I mean...do I pay the full $41000+ and then fill out forms and wait for a rebate check? Or is it a tax deduction thing? or??

b) Also...I have heard that the rebates end Dec 31 2010. So....I my Volt does not come in till Jan/Fed am I screwed?

All help appreciated

Stilgar

a) Yes, the tax credit gets baked into the lease. If you buy/finance, then you pay the full $41,000 and fill out the correct forms. It is a tax CREDIT, not rebate. From what I understand, the credit can only bring your tax liability down to 0. So if you only owe $1000 in taxes hypothetically, $6500 of the credit will kind of be wasted. It will not turn into a refund, and will not increase your existing refund. This is why I will be leasing.

b) Being able to apply for the credit and have it show up on next year's tax statement ends on december 31st, not the credit program all together. There should still be plenty of rebates in 2011.

A Volt received by December 31st 2010 is tax credited on this years tax form. Looks like most are scheduled to arrive in January 2011. I use an online tax filing service (TaxAct) which asks if I wish to apply for a green credit. I did this 4 years ago with dual pane windows. Received the credit no problem at all. Also you may want to call your electricity provider to ask about discounted rates for EV recharge. California Edison will install a meter on the outlet your have reserved for your EV. You get a low tier rate (I believe .095 kwhr cents) without bumping your regular electric bill into a higher tier. When I called they asked what car I was buying. Mentioned Volt and they said it qualifies for the low tier recharge meter. But, you must have the car BEFORE they will install a meter.

Thank you all......answered questions nicely!
Stilgar

whoa whoa whoa... from what I understood is that the $7500 is a tax rebate/refund, i.e. a 1:1 credit... meaning if I have say a $2000 liability I would then get a $5500 rebate after buying a Volt. Can someone else confirm this? If I don't get it like that, it doesn't make sense anymore to get the Volt (granted the economic value was stretching it even with the full rebate, and there are other reasons, but as a little 'ole soldier, I don't have that much excess income for those externalities).

I'm like 99% sure it can only bring your liability to $0. And I think it mostly has to do with the language. It is a tax CREDIT, not a REBATE or a REFUND.

whoa whoa whoa... from what I understood is that the $7500 is a tax rebate/refund, i.e. a 1:1 credit... meaning if I have say a $2000 liability I would then get a $5500 rebate after buying a Volt. Can someone else confirm this? If I don't get it like that, it doesn't make sense anymore to get the Volt (granted the economic value was stretching it even with the full rebate, and there are other reasons, but as a little 'ole soldier, I don't have that much excess income for those externalities).

For those of us that won't have enough tax liability to get the full refund, the only way to go is to lease. And it seems to be a good one too!

whoa whoa whoa... from what I understood is that the $7500 is a tax rebate/refund, i.e. a 1:1 credit... meaning if I have say a $2000 liability I would then get a $5500 rebate after buying a Volt. Can someone else confirm this? If I don't get it like that, it doesn't make sense anymore to get the Volt (granted the economic value was stretching it even with the full rebate, and there are other reasons, but as a little 'ole soldier, I don't have that much excess income for those externalities).

I got nailed by this exact problem three years ago when I was deployed to the middle east. I wound up with a tax refund because of too much deducted from my pay. As a result, we did not get the $3,150 credit we were supposed to get for the prius I bought my wife before leaving. So, I am really confused about how this works.......

I got nailed by this exact problem three years ago when I was deployed to the middle east. I wound up with a tax refund because of too much deducted from my pay. As a result, we did not get the $3,150 credit we were supposed to get for the prius I bought my wife before leaving. So, I am really confused about how this works.......

It sounds like you're saying that because you withheld more money for your taxes, that you were unable to take the credit, even though your tax liability exceeded $3150. That seems a little scary to me.

My understanding is that, if I owe 10k in taxes for 2010, it shouldn't matter if I had my employer take 2k out or 20k out. I should be able to claim the full $7500 tax credit because my liability was over that amount, regardless of what I had my employer withhold.

Can somebody confirm if my understanding is correct?

ClarksonCote,

I can't confirm it, but I can tell that what you stated matches with my understanding of a tax credit. It goes against your "liability," not the amount you may or may not owe based on how much was payed in. Does anyone know if the Prius tax credit/rebate/? wording three years ago was the same as the current law?
I have my 2010 Turbo Tax disc, but I haven't loaded it on my computer yet, so can't do "what ifs" yet.

Here's the IRS page on the Plug-In Electric Vehicle Credit

http://www.irs.gov/businesses/article/0,,id=214841,00.html

Here's the IRS web page where the IRS states that the Volt qualifies for a $7,500 tax credit:

http://www.irs.gov/businesses/article/0,,id=231441,00.html

Here's the IRS form you will fill out and file with your form 1040:

http://www.irs.gov/pub/irs-pdf/f8936.pdf

On lines 3 and 9 you will enter "$7,500". On line 11 you will enter the total tax you owe for 2010 (regardless of what you may have already had withheld from your paychecks). Then on line 12 you enter the total of following tax credits that you qualify for:
Foreign tax credit, Credit for child and dependent care expenses, Education credits, Retirement savings contributions credit.

On line 13 you subtract all those other credits from the tax you owe (regardless of what you may have already had withheld from your paychecks).

On line 14 you enter wither 7500, or you enter the total tax you owe after removing other credits (from line 13), whichever is smaller. So you only get to take the full $7,500 tax credit if you owe at least $7,500 in taxes after other credits are taken out (regardless of what you may have already had withheld from your paychecks).

Then you enter the $7,500 (or lower amount) from line 14, onto the credits section of form 1040, where it will be subtracted from the amount of tax you owe (regardless of what you may have already had withheld from your paychecks).

Here is the 2009 form 1040 (2010 is not out yet):

http://www.irs.gov/pub/irs-pdf/f1040.pdf

What about AMT? Does that affect whether you can get the $7,500 rebate?

Jim K

Honoreitiscom, thanks for taking the time to post all the tax information above......it helps a lot !

Honoreitiscom, thanks for taking the time to post all the tax information above......it helps a lot !

Ditto, thanks honoreitiscom

Can the unused portion of the $7500 credit be carried over from the current year to following years?

Pat S.

Any unused portion of the $7500 credit cannot be carried over to future years. Use it or loose it.

Also want to thank honoreitiscom for posting that info... and I know you're not a tax advisor and all those disclaimers, but do you know then... say if I get my Volt early next year, can I reduce my withholding in order to increase my liability and hence be able to take the full credit? Or would that even matter? This sucks that I really want a Volt but I don't have enough tax liability to make it worth it (ok, granted, that's a good problem, but it's due to deployments, too, so..).

Also want to thank honoreitiscom for posting that info... and I know you're not a tax advisor and all those disclaimers, but do you know then... say if I get my Volt early next year, can I reduce my withholding in order to increase my liability and hence be able to take the full credit? Or would that even matter?

No, it won't matter. "Tax liability" is not what you owe after subtracting what you paid or had withheld, it is your tax on your gross income after you subtract deductions and exemptions, before considering what you paid in. It is the tax on "taxable income." Line 46 on form 1040. (You do have to subtract other tax credits you might get from the $7500 figure.) This all assumes the vehicle is 100% for personal use. Form 8936 takes into account business/investment use.

Ok, so there's a chance I may have 'enough' liability to take the full credit. Good chance, though, I'll be deployed again next year which will reduce my taxable income... I admit, too, that I can ignorant when it comes to taxes and only become somewhat educated around the beginning of April, lol. The different deductions, rebates, credits, refunds, etc and when you can and can't take them is clear as mud. So glad Florida doesn't have state income taxes!

Info on AMT

Treatment of Alternative Motor Vehicle Credit as a Personal Credit Allowed Against AMT: Starting in 2009, the new law allows the Alternative Motor Vehicle Credit, including the tax credit for purchasing hybrid vehicles, to be applied against the Alternative Minimum Tax. Prior to the new law, the Alternative Motor Vehicle Credit could not be used to offset the AMT. This means the credit could not be taken if a taxpayer owed AMT or was reduced for some taxpayers who did not owe AMT

Good blog post adding here for documentation and quick locating.

http://gm-volt.com/2010/12/08/volt-drivetrain-named-to-wards-best-engine-list-dealers-get-volt-financing-details/
#30 bookdabook Says


Dec 8th, 2010 (9:32 am)


The grump: Why should I need a tax attorney, just to buy a Volt?

You don’t have to be an accountant. If your job situation has not changed from 2009 to 2010 go to your 2009 tax return.

On Form 1040, 2nd page, line 46, they put a little wedge on this line, this is your total tax. Line 54 is your total credits. The Volt $7500 credit will go here. Subtracting line 54 from line 46 (including the 7500) gives your total tax. If that subtraction is greater than or equal to 0, you theoretically would be able to use the full value of the Volt tax credit if your income situation has not changed dramatically.

To simplify, if Form 1040 line 55, your total tax from 2009, is >7500, you can use the entire credit. Look back to 2008 and other years if you want to get a feel for this.

The quoted sentence below is part of an extensive email from my CPA - this is not official tax advice (his response in BOLD)

"2. The $7500 tax credit for purchasing an electric vehicle (going to get a Chevy Volt by EOY) is a direct federal tax credit – not impacted by AMT or anything else….so, this full amount should be considered when estimating taxes for year end. Correct."

Agreed, there are a few other possible credits mentioned in previous posts that may take your tax liability down to the point where not all of your Volt tax credit can be used (or if you did not have at least $7500 in liability in the first place). I got burned by this in 2008 when I purchased an Escape Hybrid (never would I buy a Prius). Due to some other pass through deductions from my S corp (and some 'recession based' changes in the tax code), my final tax liability was zero - a great problem to have, but not for the $3K tax credit....and this credit could not be taken in subsequent years.

So, botttom line is (again not tax advise), it appears as long as you expect to have a total Fed tax liability (as Scott and others have written) of at least $7500 (nothing to do with what you've paid against it to date), then you can take the complete tax credit and not have to worry about AMT impacting the amount of your credit. So, if you had a $10,000 tax liability and had paid $12,000 in withholding during the year, instead of getting $2,000 tax refund, you'd receive a $9,500 tax refund....

But you must have a VIN number to 'transfer title' by the end of the year (if you are trying to take the credit in 2010). The dealer indicated they may also need to have a 'GM Invoice' for such - and I'm going to work on this with them next week to ensure there aren't any holdups for doing so.....will post once title has transfered. It's not clear whether or not a 3800 status is enough - but will know for sure later in the week....hopefully my VOLT will be 'in transit' by then anyway. GO VOLT, GO GM #282

Nice post ClovisVolt.

I'm looking at other tax credits (energy efficiency tax credits) and this FAQ states what others are saying but in fairly simple language. Similar to above but sometime hear/seeing it in a couple different ways helps it sink in for people (self included).

http://energystar.supportportal.com/ics/support/default.asp?deptID=23018&task=knowledge&questionID=16201


How can I determine if I can collect the tax credit? Does it matter if I am getting a tax refund?

Whether or not you are getting a refund does not matter. What matters is your "tax liability" - which is the total amount of federal income tax you are responsible for paying.

These energy efficiency tax credits are technically "non-refundable" which means you can't get more money back in tax credits than you pay in federal income taxes (your tax liability). Check your last year's tax return to get a sense of your tax liability (line 61 on the 2008 1040 form, called "total tax"). You can claim all of your tax credits as long as your tax liability, is greater than zero after all tax credits have been applied.

For example, say your Adjusted Gross Income (AGI) is $50,000, your tax liability is $10,000 (before you apply tax credits), and you've had $12,000 withheld from your paychecks. In this scenario you could claim up to $10,000 in tax credits. If you are eligible for the entire $1,500 tax credit, then your tax liability ($10,000) would be reduced to $8,500. Since you already had $12,000 withheld, you will get a tax refund of $3,500 ($12,000 - 8,5000 = $3,500).

If your AGI was $50,000, your tax liability $10,000 (before tax credits were applied), and you had $8,000 withheld from your pay checks, you would still have the ability to claim up to $10,000 in tax credits. If you are eligible for the entire $1,500 tax credit, your tax liability ($10,000)would be reduced to $8,500 and you would owe the government $500 at the end of the year ($8,000 already paid in taxes - $8,500 tax liability = $500 final payment).

12/13/2010 - (4000) Vehicle available to ship
12/13/2010 - (4104) Bailment Invoice Created (vehicle is about to leave plant property).
12/13/2010 - (4B00) Your car is bayed and is waiting for transportation by Truck, Rail or transfer to vendor
12/15/2010 - (4106) Bailment Released (vehicle has left plant property).
12/15/2010 - (4150) Invoiced (Order is invoiced to the dealer)

I think the 4150 status will be enough to complete the transaction. Based upon John, mine should arrive by Mon-Tues next week, but I'll try to pay for it this weekend to make sure the status is enough to complete the title transfer in 2010. Wish me luck....GO GM, GO VOLT, GO CHITOWN! Stay warm....

Basics of your tax deduction vs tax credit -- clarification around 1:30 minutes.

http://www.khanacademy.org/video/tax-deductions-introduction?playlist=Finance

(Awesome series of videos on this site)

The quoted sentence below is part of an extensive email from my CPA - this is not official tax advice (his response in BOLD)

"2. The $7500 tax credit for purchasing an electric vehicle (going to get a Chevy Volt by EOY) is a direct federal tax credit – not impacted by AMT or anything else….so, this full amount should be considered when estimating taxes for year end. Correct."

Agreed, there are a few other possible credits mentioned in previous posts that may take your tax liability down to the point where not all of your Volt tax credit can be used (or if you did not have at least $7500 in liability in the first place). I got burned by this in 2008 when I purchased an Escape Hybrid (never would I buy a Prius). Due to some other pass through deductions from my S corp (and some 'recession based' changes in the tax code), my final tax liability was zero - a great problem to have, but not for the $3K tax credit....and this credit could not be taken in subsequent years.

So, botttom line is (again not tax advise), it appears as long as you expect to have a total Fed tax liability (as Scott and others have written) of at least $7500 (nothing to do with what you've paid against it to date), then you can take the complete tax credit and not have to worry about AMT impacting the amount of your credit. So, if you had a $10,000 tax liability and had paid $12,000 in withholding during the year, instead of getting $2,000 tax refund, you'd receive a $9,500 tax refund....

But you must have a VIN number to 'transfer title' by the end of the year (if you are trying to take the credit in 2010). The dealer indicated they may also need to have a 'GM Invoice' for such - and I'm going to work on this with them next week to ensure there aren't any holdups for doing so.....will post once title has transfered. It's not clear whether or not a 3800 status is enough - but will know for sure later in the week....hopefully my VOLT will be 'in transit' by then anyway. GO VOLT, GO GM #282
Hey folks, I know this is an old thread, but it's what was linked in the FAQ so I figured I'd try to keep things in the right place.

So, is the info above still true? For our 2012 taxes if our taxes due were 10k and we paid 10k we'd get the 7,500 as a refund?

Or, we could lower our withholdings amount by $833/month to get the money now, right?

Thanks folks

Oh, also is the tax credit going to 10K? If it does after we purchase would we still get it as long as it was the same tax year (2012)?

Hey folks, I know this is an old thread, but it's what was linked in the FAQ so I figured I'd try to keep things in the right place.

So, is the info above still true? For our 2012 taxes if our taxes due were 10k and we paid 10k we'd get the 7,500 as a refund?

Or, we could lower our withholdings amount by $833/month to get the money now, right?

Thanks folks

Right. If you're reasonably confident you know what your taxes will be, you can lower your witholding and get the "refund" early. (the risk being of course that if your guess is wrong, you'll have to pay the difference back into the system - hardly the end of the world.)

Thanks for the fast reply Walter. I actually edited my post to add that I was told the tax refund will increase to 10k. As long as it's the same year, I'll get that 2,500 too, right?

Thanks

Thanks for the fast reply Walter. I actually edited my post to add that I was told the tax refund will increase to 10k. As long as it's the same year, I'll get that 2,500 too, right?

Thanks

I have no idea how that's going to work out. If congress elects to pass the increased rebate, the exact language of the act will determine whether you'll be eligible. Since I bought last year and already got my rebate, I doubt I'll get anything. :-/

Ok, thanks.

Sorry for you but at least you're gas free.

Quoted from post 11:


Here's the IRS web page where the IRS states that the Volt qualifies for a $7,500 tax credit:

http://www.irs.gov/businesses/article/0,,id=231441,00.html

Since the quoted post is linked to from the FAQ (http://gm-volt.com/forum/showthread.php?5801-Frequently-Asked-Questions&p=47963#post47963), I thought I'd mention that the quoted URL isn't active anymore, but here's a current IRS URL that confirms that the 2011-2013 model years are still eligible:

http://www.irs.gov/Businesses/30D.-New-Qualified-Plug-in-Electric-Drive-Motor-Vehicles-–-General-Motors-Corporation

I was approached over the weekend by someone a couple of streets over from me who is very interested in the Volt. While at a dealer in Springfield, MA he was told that the $ 7500.00 tax credit no longer applies. I was surprised when he told me this as I had no facts to back it up. but I suppose it all depends on what he was trying to buy, used vs. new, leased.. he did not say.

I was approached over the weekend by someone a couple of streets over from me who is very interested in the Volt. While at a dealer in Springfield, MA he was told that the $ 7500.00 tax credit no longer applies. I was surprised when he told me this as I had no facts to back it up. but I suppose it all depends on what he was trying to buy, used vs. new, leased.. he did not say.

There really haven't been any changes to the tax credit since the Volt was first available. It only applies if you are the original owner (demo vehicles OK), and not to leases. But the dealer was likely misinformed (which is very odd, as they will sell far fewer cars being misinformed that way!).

Buyer Beware. There are a few dealerships out there that are taking the tax credit they are few and far between and then selling the car without the eligibility for the tax credit. The tax credit is due to expire next year if it is not renewed by Congress. But as of now the buyer of a new volt will receive the tax credit. Of course those who lease will not receive the credit, that goes to the dealership.

Buyer Beware. There are a few dealerships out there that are taking the tax credit they are few and far between and then selling the car without the eligibility for the tax credit.

This definitely falls under "buyer beware." If you buy a new car, and it says "used" on the paperwork, well, you've accepted a used car at a new car price (e.g. overpaid perhaps 20% or so). The same applies whether it is a car eligible for a tax credit or not (although a bigger hit if you buy the car that could have had a tax credit, if it wasn't reflected in the price).

Of course, if the dealer sells the car as new and takes the credit anyways, they are likely going to be in serious trouble. Either you or the dealer will likely get caught by the IRS, in which case either you get the credit, or you can easily take the dealer to court to get paid back something more than what you owe the IRS.

Buyer Beware. The tax credit is due to expire next year if it is not renewed by Congress. But as of now the buyer of a new volt will receive the tax credit.

No, Mcgsp, The Fed Tax Credit in in full force until qualifying vehicle production/sold vehicle's have reached the 200,000 unit. Only then by congressional formula the Fed Tax Credit Lessens, step by step, by volume/production, over additional time, to zero.

.....And the qualification of up to $7,500 Federal Tax Credit, as posted in the above threads is based on the buyers absolute tax liability in the purchasing year- Not a tax Consultant though- lol

-Of course this could change if adverse action against alternative fueled vehicles makes it way into the fiscal discussions at the end of the year- Not likely-



Of course those who lease will not receive the credit, that goes to the dealership.

No, Mcgsp, The Fed Tax Credit is captured by the lessor, Us Bank/Ally Bank and is used as an enhancement to the Residual Value at the end of the lease. This in turn, dollar per dollar pass through, drops the lease payment as a benefit to the lessee (The Customer Leasing The Volt).

This is the way is is. This is the way it has been since the first Volt lease in early 2011.

.......Stated this way by US Bank-

"As long as Credit is available." This in reference to the Republican push to eliminate MOST green Tax Credit's. This is on the record.


Best-

Thomas J. Thias

Sundance Chevrolet

Article on Autoblog on unscrupulous dealers: http://www.autoblog.com/2011/05/31/are-chevy-dealers-gaming-the-system-to-keep-volts-7-500-consum/ Having troubles just paste url.

As for the Tax Credit, your right and your wrong. First, there is a quota of vehicles that must be sold before the credit ceases to exist on the those vehicles. However, there is a provision in the legislation that requires Congress to renew the credit whether or not the alloted number of vehicles are sold, meaning that credits will expire by the end of next year. It is unfortunately buried in the legislation and was used as a triggering mechanism to keep these credits to go on indefinitely and to protect the treasury from giving tax credits for every new vehicle that meets the US energy requirements in coming years. These Credits were also put in place at a time when it was thought that greater number of PHEV and EV cars would have been sold by this year. It will be up to Congress and the President in the coming months to negotiate this point. Keep your eye on the news this will be a contentious issue with Republican control house and the President.

Article on Autoblog on unscrupulous dealers: http://www.autoblog.com/2011/05/31/are-chevy-dealers-gaming-the-system-to-keep-volts-7-500-consum/ Having troubles just paste url.

That's the article that got people to believe that dealers may be doing this. But that one article, from a year and a half ago (when Volts were not available in most states, and you had to fight to buy one *at* MSRP), even states "if this is true". The one case that was presented was a dealer that was being honest with the buyer about it, and referring to "applying for a subsidy" (you don't apply for your taxes!).

The original report -- the one that article was based on -- came from a Fox News interview with a Saturn dealer who had seen (through web searches) that a Kia dealer was selling used Volts. Again, they were clear that the vehicles were used (who goes to a Kia dealer to buy a new Chevy Volt?), and it was not clear that the dealership applied for the tax credits (which very well could be disallowed, if there was no difference to the car except a temporary title just to get the tax credit). The same original report also discussed how the cars were sitting in lots not being bought (at a time when we forum members had to pay MSRP or even higher, if we were lucky enough to find one). The only cars staying on lots were the demos (in most cases), because GM required them to be at the lots for 6 months before being sold.

So the whole dealer-taking-the-tax-credit thing is a complete hoax: One unsubstantiated report of a car salesman claiming the dealer "applied for the subsidy", and a Kia dealer selling 4 used Volts apparently incorrectly claiming they were rentals.