Tax season soon. Part of the reason for purchasing this vehicle was because of the state and federal rebate incentives. What steps did you take to receive the money? I know not all will receive the full 7500. It depends on something... I do know back when we researched it that we will received the full amount. 7500 bones. thanks
steps needed to take to get 7500 federal tax credit?
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IRS Form 8936 is filled out and submitted with the tax return. The IRS publishes a new one each year, usually not until the end of January so you can't file until it is released. Tax softwares like TurboTax typically don't get the new form into their software for a couple of weeks after that, so figure sometime in February. The software will still calculate the credit as the dollar amounts won't change when the new form is published, but you just can't file until they have updated with the 2019 form.
As for qualifying you have to have at least $7,500 in tax liability for the year to benefit from the full credit. This is what confuses a lot of people as they think this is talking about whether they owe tax or get a refund when they do their taxes at the end of the year. But it's referring to the tax amount prior to subtracting withholding (slightly oversimplified but that's the gist of it). So for example if someone who did not purchase a Clarity had X dollars income and after accounting for deductions etc. had a tax liability of $9,000, and had $10,000 withheld during the year, they would get a $1,000 refund. However if they purchased a Clarity they can apply the $7,500 credit to their tax liability, reducing the tax liability to $1,500, and after subtracting the $10,000 withholding their refund would be $8,500, which is $7,500 more than the $1,000 that they would have gotten back if they didn't purchase a Clarity.
For an example of someone who would otherwise have owed tax at the end of the year, if the same person who did not purchase a Clarity and had a tax liability of $9,000 only had $8,000 withheld during the year, they would owe $1,000 when they file their taxes. However if they purchased a Clarity they can apply the $7,500 credit and their tax liability is reduced to $1,500. Subtracting the $8,000 withholding they now get a refund of $6,500. The difference between paying $1,000 at the end of the year and getting a refund of $6,500 is a $7,500 difference.
The only problem is when someone doesn't have at least $7,500 in tax liability, then they won't get the full benefit of the credit. For example if someone who did not purchase Clarity had Y dollars income and after accounting for deductions etc. had a tax liability of $5,000 and had $6,000 withheld during the year, they would get a $1,000 refund. If they purchased a Clarity they can only use $5,000 of the credit as you cannot reduce your tax liability to less than 0. They would get all of their $6,000 withholding back, which is nice but in that case they are only getting $5,000 more back than if they had not bought a Clarity.
As for qualifying you have to have at least $7,500 in tax liability for the year to benefit from the full credit. This is what confuses a lot of people as they think this is talking about whether they owe tax or get a refund when they do their taxes at the end of the year. But it's referring to the tax amount prior to subtracting withholding (slightly oversimplified but that's the gist of it). So for example if someone who did not purchase a Clarity had X dollars income and after accounting for deductions etc. had a tax liability of $9,000, and had $10,000 withheld during the year, they would get a $1,000 refund. However if they purchased a Clarity they can apply the $7,500 credit to their tax liability, reducing the tax liability to $1,500, and after subtracting the $10,000 withholding their refund would be $8,500, which is $7,500 more than the $1,000 that they would have gotten back if they didn't purchase a Clarity.
For an example of someone who would otherwise have owed tax at the end of the year, if the same person who did not purchase a Clarity and had a tax liability of $9,000 only had $8,000 withheld during the year, they would owe $1,000 when they file their taxes. However if they purchased a Clarity they can apply the $7,500 credit and their tax liability is reduced to $1,500. Subtracting the $8,000 withholding they now get a refund of $6,500. The difference between paying $1,000 at the end of the year and getting a refund of $6,500 is a $7,500 difference.
The only problem is when someone doesn't have at least $7,500 in tax liability, then they won't get the full benefit of the credit. For example if someone who did not purchase Clarity had Y dollars income and after accounting for deductions etc. had a tax liability of $5,000 and had $6,000 withheld during the year, they would get a $1,000 refund. If they purchased a Clarity they can only use $5,000 of the credit as you cannot reduce your tax liability to less than 0. They would get all of their $6,000 withholding back, which is nice but in that case they are only getting $5,000 more back than if they had not bought a Clarity.
Although, in some states, doesn't Honda Financing take the $7500 off the top of the lease agreement?
Also note that there is a 30% rebate for installing an EVSE, retroactive to 2017. I'm not sure when the forms will be available for that but it was part of the recently-approved Federal budget package.
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I'll have to look into this one to see if I can get some money back for my Duosida and circuit upgrade that I did for it.
Portable EVSEs do not qualify, but the cost of the outlet install (less permit/inspection fees) will.
The Alternative Fuel Tax credit form is 8911. It is not yet available for 2019, nor has the 2018 version been revised to allow for amended returns claiming the credit.
Fantastic information. I assume my tax guy will know what to do and I inquired with him prior to buying to see if we would benefit from the full credit, which we will. My tax guy is a friend of mine and does mine the very last minute anyway, so I am all set with forms (or will be). I wanted to get info before to be sure.
We also purchased the car and financed at .9% via honda.
P.S. Do you know what line item it would be on from existing tax returns so people can see what their tax liability is?
We also purchased the car and financed at .9% via honda.
P.S. Do you know what line item it would be on from existing tax returns so people can see what their tax liability is?
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For the 2019 filing season, Form 8936 rolls to Schedule 3 Line 6, which rolls to Form 1040 Line 13b.
On the 2019 1040 form tax liability is on line 12b. Line 13b is where the $7,500 credit goes. 13b is subtracted from line 12b, however if the result is zero or less you have to enter zero.
However I think you were asking where you can see what your tax liability was on previous years forms, correct? On the 2018 1040 the tax liability was on line 11 and the credit would have been entered on line 12.
hi Friends,
Good morning..!!
I have some questions about my taxes w.r.t the Honda Clarity i own. I am not sure if i have to start a new thread or just post it here. Please correct me if i have to do it differently.
Here are my questions:
1. Are the PG&E and California Clean Vehicle Rebates taxable
2. If yes, then My PG&E rebate was claimed by my owner as i rent a room and the cheque was issued in his name. and he used the money towards my rent. So, do i have to still declare it while i file my taxes.
3. I received the Clean Vehicle rebate as well on my name, so do let me know about this as well.
Thank you so much in advance.
Good morning..!!
I have some questions about my taxes w.r.t the Honda Clarity i own. I am not sure if i have to start a new thread or just post it here. Please correct me if i have to do it differently.
Here are my questions:
1. Are the PG&E and California Clean Vehicle Rebates taxable
2. If yes, then My PG&E rebate was claimed by my owner as i rent a room and the cheque was issued in his name. and he used the money towards my rent. So, do i have to still declare it while i file my taxes.
3. I received the Clean Vehicle rebate as well on my name, so do let me know about this as well.
Thank you so much in advance.
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In general, rebates aren't taxable. Since you didn't receive the PG&E rebate, but your landlord did, you wouldn't be on the hook for any taxes on it even though your landlord was nice enough to credit your monthly rent. The California Clean Vehicle Rebate isn't taxable unless it reduced your purchase price to a negative number. For instance, if paid $4,000 for the Clarity after the Federal Tax Credit and California gave you $5,000 then you would be on the hook for the $1,000 as unearned income.
That said, check with your tax accountant for a more specific answer.
i will ask my tax consultant like you suggested.
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Just making sure, on my 2019 1040 form, line 11a: $28,128 , line 12a $3,485
Meaning I might get $3,485 federal credit ?
Thank you in advance.
12b actually.
But in 2019 you would have been eligible for $3,485 assuming nothing else was added subtracted before line 16 (other taxes and credits an affect your liability)
My experience with the tax credit; filed taxes electronically on 3/25/20, but did not get refund, which included the $7500 credit, until 7/29/20. Still PO'd at the IRS for this inexplicable delay. Everyone I knew (most filed electronically) received their refunds within 2-3 weeks. I continually accessed the IRS web site regarding the status of my return, and was given the same answer every time: Your tax return is still being processed. A refund date will be provided when available. I was told by others that the IRS was short staffed due to COVID but I strongly suspect the addition of the tax credit in my return put it into a separate pile for "further evaluation". I finally had to contact one of my U.S. Senators and had my refund a week later. I hope you have a better experience.
I had a similar experience and suspect that there were a couple of causes. I read somewhere that the IRS has started verifying the EV $7,500 credits because of rampant fraud that had been going on. Might seem simple to verify, but not if they have to contact the individual state where the car was registered to verify that you did indeed purchase a car with that VIN number in that calendar year. In theory that verification could be automated, but if it's between the IRS and individual states probably not, or at least not all states (I am in Georgia, not exactly an EV hotbed). If it required manual action by an IRS clerk to initiate the request to the state, the IRS was really bogged down starting in March as they were trying to transition to IRS workers doing their job from home. And presumably state governments had similar issues, thus I could see where the IRS in some cases had to wait weeks or longer to get verification back from the state.
That's just my guess, whatever the cause was, even though mine took about three months I was just glad that in the end it got approved and that I got my refund.
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I suspect you hit the COVID shutdown of the IRS. Colorado was even worse - I filed on January 28th (the day after the IRS accepted my filing) and I didn't get my refund until June. Colorado had no COVID excuse.
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