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I saw this in the news this morning:Manchin and Schumer announce deal for energy and health care bill
The article mentions that the income requirements may be changing if this bill passes but didn't give any details.

From the article:
Tax credits for electric vehicles made it into the new deal, according to two Senate Democratic aides. Electric Vehicle tax credits will continue at their current levels, up to $4,000 for a used electric vehicle and $7,500 for a new EV. However, there will be a lower income threshold for people who can use the tax credits – a key demand of Manchin’s. Manchin had been staunchly opposed to electric vehicle tax credits throughout negotiations.
 

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It will be really interesting to see where the income limits land, but I would bet they'll be set at a point that essentially makes the credit worthless. With the price of most new EV's north of $50K before the tax credit, I would guess that most (though not all) people who will actually buy cars like the i4 will not qualify for the credit. Another example of a policy that sounds good on paper but ends up disincentivizing the intended result. Thanks Manchin!
 

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My only issue with the whole tax credit thing is its not a given. It is pedaled like everyone can just get this credit and that's not how it works. The standard deduction for most normal working people covers taxes owed. And most people get a refund. Unless you owe over 7500 in taxes the credit is useless to you. It really shouldnt be marketed as lowering the price of the car as lots of people cant even use the credit in the end. Thats how it was explained to me anyway am I wrong? I was told you just dont get a check for 7500 if you dont owe any taxes.
 

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My only issue with the whole tax credit thing is its not a given. It is pedaled like everyone can just get this credit and that's not how it works. The standard deduction for most normal working people covers taxes owed. And most people get a refund. Unless you owe over 7500 in taxes the credit is useless to you. It really shouldnt be marketed as lowering the price of the car as lots of people cant even use the credit in the end. Thats how it was explained to me anyway am I wrong? I was told you just dont get a check for 7500 if you dont owe any taxes.
It's based on your tax liability. If you made around $50k+, you paid $7500 in taxes and can get the full credit. Nothing to do with the amount you owe or are refunded.
 

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They'll probably find a way to change the rules the day before I pick my car up that I've been waiting for since July 20th last year.
 
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It's based on your tax liability. If you made around $50k+, you paid $7500 in taxes and can get the full credit. Nothing to do with the amount you owe or are refunded.
Interesting. that was not how it was explained to me or what Im reading on web sites but we will see. Perhaps IM ignorant of how taxes work. But if you make 50k and paid 7500 in taxes you file your taxes. You take your deductions and write offs and owe nothing and get a refund. Is not the 7500 for the car a deduction on your itemized form? if there is nothing left to deducted after standard deductions then how do you claim the credit?

Here is a quote from one of many tax question web sites that all say the same thing. " A tax credit means an EV buyer will receive up to a $7,500 reduction in their tax liability for the year. But this is a flat credit, which means it is only worth the full $7,500 if the individual’s tax bill is at least $7,500. If an EV buyer has a tax bill of, say, $3,000 at the end of the year, the EV tax credit can only be a maximum of $3,000. The IRS will not go over and above this total tax liability figure, and in this example, the remaining $4,500 of the EV’s total tax credit will not be useable. Furthermore, that unused portion will not apply to future years’ taxes. "

So as it is laid out if you owe no taxes ( which is why you would be getting a refund) then you have nothing to use the credit on and there for the credit is useless to those who don't have a tax owed of at least 7500.00. So if you always get a refund as I do then I have no way to use the tax credit as will most people.
 

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A lot of explanation of this credit is confusing because of the term "tax liability". That is completely separate from your refund/tax bill come tax filing time. Basically how it works is you owe a certain amount in taxes for the year...your income, minus deductions, etc. apply the tax rates to that number, get what you owed. Say that number is $10,000. During the year, you've paid some/all of this $10,000 via payroll deductions. When you file your taxes, you are "trueing up" between what you owed for that year vs what you already paid. If you overpaid, you get a refund. If you underpaid, you owe. Your refund/bill is not your liability. Your liability in this example is $10,000. This is a credit based on your liability (not a deduction), so you'd get the full $7500 in this case. Modified by whatever your refund/bill was of course.

EDIT: When someone talks about making a credit like this "refundable", that means that they remove the tax liability from the equation, so even someone who paid $0 in taxes all year would still be able to get it. Source: dude, trust me.
 

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....So as it is laid out if you owe no taxes ( which is why you would be getting a refund) then you have nothing to use the credit on and there for the credit is useless to those who don't have a tax owed of at least 7500.00. So if you always get a refund as I do then I have no way to use the tax credit as will most people.
If you get a refund it just means you paid more in taxes during the year (via withholding or quarterly estimates) than you were required. The Tax Credit is not applied to your 1040 amount owed it is applied to your total tax liability for the entire year. If you have a refund coming (and assuming you paid more than 7500 in taxes during the year) the Tax Credit will just increase the size of your refund.
 

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It looks like the caps are in the $150k for individual and double that for married.

Once again it's a stab at states that have high income and high adoption rates EV.

So in California a couple in silicon valley will no longer be eligible for the credit. If you get two engineers in a household, it's not hard to hit $300k. With houses at $1 million these days, $300k doesn't make them rich. The SALT cap has taken increased their tax liability and now a cap on income for EV.

Anyway.... Don't get me started.

Waiting for my M50......
 

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It looks like the caps are in the $150k for individual and double that for married.

Once again it's a stab at states that have high income and high adoption rates EV.

So in California a couple in silicon valley will no longer be eligible for the credit. If you get two engineers in a household, it's not hard to hit $300k. With houses at $1 million these days, $300k doesn't make them rich. The SALT cap has taken increased their tax liability and now a cap on income for EV.

Anyway.... Don't get me started.

Waiting for my M50......
Sounds like you're already started. 100% agree. I live in MA and it can be similar, though not as bad as Silicon Valley. I'm hoping to eek in under the old rules.
 
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[sarcasm]
Surely this is an appropriate steering policy measure to increase the share of EVs in the flyover states.
[/sarcasm]
As long as they are SUVs. I can't possibly get myself to understand why the price limit is less for cars than trucks and SUVs. Fine, my car is an SUV then.
 
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Because US car builders tend to build trucks and SUVs and Asian/European car builders not so much?

Edit: I forgot about Tesla for a moment...
 

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Because US car builders tend to build trucks and SUVs and Asian/European car builders not so much?

Edit: I forgot about Tesla for a moment...
So the limit is $55k for a Model 3 and $80k for a slightly lifted model 3 (AKA model Y).
 
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This is the first article I read on detail (emphasis mine):


It would also remove the current 200,000 vehicle cap before triggering a phase-out of the tax credit, a huge win for companies like Tesla, Toyota, and General Motors, which have all sold more than 200,000 EVs.

In an entirely new provision, the bill includes a $4,000 tax credit for the purchase of a used clean vehicle, a potential boon for middle and low-income car buyers who are less likely to be able to afford a brand new EV but are still hoping to switch to something less polluting.

And the bill amends the definition of eligible vehicles to include all vehicles manufactured in North America. A previous version of the proposed tax credits would have favored American-based manufacturers, sparking furious Canadian lobbying in Washington to get it changed.

There are some limitations on who can claim a tax credit for a new or used vehicle purchase. The deal includes a cap on the suggested retail price of eligible vehicles of $55,000 for new cars and $80,000 for pickup trucks, SUVs, and vans. Credits would be capped to an income level of $150,000 for a single filing taxpayer and $300,000 for joint filers for new vehicles and at $75,000 and $150,000 for used cars.
 

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I will be beyond pissed if this takes away from this year. This car saved me a quarterly payment. I usually owe about 40K in taxes and this is a huge benefit to me. I will really be pissed if this takes that away.
 
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I will be beyond pissed if this takes away from this year. This car saved me a quarterly payment. I usually owe about 40K in taxes and this is a huge benefit to me. I will really be pissed if this takes that away.
Breathe a bit.................this will not go into effect this tax year. So you are safe. Next tax year could be a different story.
 

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Breathe a bit.................this will not go into effect this tax year. So you are safe. Next tax year could be a different story.
🤯
 

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I will be beyond pissed if this takes away from this year. This car saved me a quarterly payment. I usually owe about 40K in taxes and this is a huge benefit to me. I will really be pissed if this takes that away.
The current tax credit program is already baked in and promised to the manufacturers. Until BMW sells beyond the max quantity of cars eligible for the credit, the $7,500 will apply. The new program won't go into effect immediately and will impact those cars sold beyond the initial manufacturer's allotment in the first tax program. That should almost certainly make any BMW i4 purchase in 2022 (and hopefully early 2023) fully eligible for the $7,500 credit.
 
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