How many of the federal tax rebates can you get in a year?

[dirtdiver]

The $7500 federal rebate. Can you collect 2 on two different vehicles?

steve

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[MickeyAO]

Yes. Do you have the tax liability for both?

 

[rdr854]

Assuming that OP has sufficient tax liability for the tax year in question, and assuming that both vehicles qualify fir the federal tax credit, I would assume that he could qualify for the tax credit for each vehicle.

 

[Bandit216]

There

The $7500 federal rebate. Can you collect 2 on two different vehicles?

steve

As the others said, under the current law there is no limit. BUT it is not a tax rebate. As also stated above, it is a tax credit. So, the amount of credit you can claim is limited to the amount of tax liability you have.

The proposed law currently being discussed in Congress may change it to a tax rebate but may also add a maximum income restriction.

 

[RickLightning]

There

As the others said, under the current law there is no limit. BUT it is not a tax rebate. As also stated above, it is a tax credit. So, the amount of credit you can claim is limited to the amount of tax you owe.

The proposed law currently being discussed in Congress may change it to a tax rebate but may also add a maximum income restriction.

Nothing to do with tax owed. Tax liability.

Fred has $10,000 withheld from his paycheck. On his tax return, he has tax liability of $7,500. He gets a $2,500 refund because he withheld $2,500 too much. He owed nothing.

Fred buys an EV that qualifies for the tax credit. Given that he has tax liability of $7,500, he gets the full credit and a refund of all $10,000 he had withheld from his paycheck.

Mary has tax liability of $4,000. She withheld $10,000 from her paychecks. She gets a $6,000 refund. She owed nothing.

Mary buys an EV that qualifies for the tax credit. She gets $4,000 of it, losing $3,500 because her tax liability is below $7,500. She gets a full refund of the $10,000 withheld.

A Roth conversion generates taxable income (the conversion is fully taxable), so one can use that to fully utilize the tax credit, and then earn tax free gains in the investment. This may or may not be a good strategy for a retiree depending on their tax bracket. Many have very low income between retirement and taking their social security, and may not pay taxes on conversions anyway. But it is a way to use the tax credit.

 

[dirtdiver]

Yes. Do you have the tax liability for both?

Im imagining I do have the tax liability. Given Im 60 I could make sure I have the liability by pulling some retirement money out of my 401K.

 

[dirtdiver]

Nothing to do with tax owed. Tax liability.

Fred has $10,000 withheld from his paycheck. On his tax return, he has tax liability of $7,500. He gets a $2,500 refund because he withheld $2,500 too much. He owed nothing.

Fred buys an EV that qualifies for the tax credit. Given that he has tax liability of $7,500, he gets the full credit and a refund of all $10,000 he had withheld from his paycheck.

Mary has tax liability of $4,000. She withheld $10,000 from her paychecks. She gets a $6,000 refund. She owed nothing.

Mary buys an EV that qualifies for the tax credit. She gets $4,000 of it, losing $3,500 because her tax liability is below $7,500. She gets a full refund of the $10,000 withheld.

A Roth conversion generates taxable income (the conversion is fully taxable), so one can use that to fully utilize the tax credit, and then earn tax free gains in the investment. This may or may not be a good strategy for a retiree depending on their tax bracket. Many have very low income between retirement and taking their social security, and may not pay taxes on conversions anyway. But it is a way to use the tax credit.

I like the way you explained that.

 

[TaxmanHog]

The examples above receive my stamp of approval

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