A noob question on the $7500 rebate...

[honoreitiscom]

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

http://www.irs.gov/businesses/articl...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/articl...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

[jimcking]

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

Jim K

[Mybatcar]

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

[ClarksonCote]

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

Ditto, thanks honoreitiscom

[PatS]

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

Pat S.

[ChuckR]

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

[shawnw2]

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..).

[MichaelH]

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.

[shawnw2]

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!

[sperk99]

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