EV CREDIT

[InnovativeTax]

Hello all,

Is anyone else having a problem with the Federal Electric Tax credit that its being reduced by other credits and the Tentative Minimum Tax calculation. Taxpayers thought its the full $7,500 and cant find any guidance about it.

Furthermore, I have a client that has an 2023 EV vehicle purchase AND Solar Purchase and its reducing the EV credit down to ZERO! Ouch

Anything guys?

Thank you!

[Just-Lisa-Now-]

The order in which the credits are deducted may be an issue for some people....both only reduce income tax (not refundable) so if one creates zero tax liability, then the other one wont count for anything, because you cant reduce income tax below zero.

The solar would carryover the EV credit would not, so it sounds like its taking the solar first an wiping out any tax liability and leaving nothing for the EV car to reduce, I'm sure this was done "by design" by Congress.

[InnovativeTax]

Lisa...I know so crazy! Can't find ANYWHERE of mention that (EV Credit) it's is offset by TMT tax.They have the tax liability and the solar is being all used up but no credit for the EV because of solar, and child tax credit it seems.

Hmmm...people who buy lets say high end Tesla's looking for credit should be aware!

[TaxGuyBill]

Is it the personal part of the EV credit?  If so, it seems like the program is doing it incorrectly.  If you look at the Worksheet for line 14 (Form 5695) in the Instructions, you'll see the that 8936 is applied before the credits on page one of 5695.

As for AMT and the EV credit, that seems wrong, but I'm not fluent in AMT so I would need to research it.

[InnovativeTax]

TaxGuyBill...yes its a personal EV vehicle credit. Not sure anymore as I read it once its this way, read it again its another way. UGH!

I know the business EV credit does get carried over but not the personal EV credit. Wouldnt the program be fixed and/or updated by now?

I cant be the only one encountering this problem?

[InnovativeTax]

Although its on 8936 under business/investment, how do I get it to go to personal use part III of 5965?

[Just-Lisa-Now-]

So I just went in goofing around with a dummy return, I gave it a solar credit that wiped the tax to zero, then I added the EV credit, and it gave me the EV credit and took away the solar and carried it forward.

Delete your 8936 and start over from scratch, see if it flows differently.