new NPR report says tax liability not required if taken through dealer.

[jimfigler]

The $7,500 EV tax credit will see big changes in 2024. What to know : NPR

Does not seem right to me. They reference a IRS FAQ page but I couldn't find it in the FAQ

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[Tundra]

The $7,500 EV tax credit will see big changes in 2024. What to know : NPR

Does not seem right to me. They reference a IRS FAQ page but I couldn't find it

According to this government document, which my accountant confirmed when I reached out, the point of sale moves the tax liability from the buyer onto the dealership. So your personal tax liability when purchasing is now immaterial, however you must still be under the income cap and the vehicle must qualify; it should be noted that much fewer vehicles qualify this year - the Lightning is one of this which does though.

 

[jimfigler]

According to this government document, which my accountant confirmed when I reached out, the point of sale moves the tax liability from the buyer onto the dealership. So your personal tax liability when purchasing is now immaterial, however you must still be under the income cap and the vehicle must qualify; it should be noted that much fewer vehicles qualify this year - the Lightning is one of this which does though.

That is good news.

 

[Zprime29]

Also note, that if you use the point of sale and then find yourself over the income cap, you will be required to pay it back at tax time.

 

[Tundra]

I am also curious if the tax liability is moving over the dealership, how much tax liability do they have? Or does that not matter? I don't have any clarity on that one.

If it is solely based on their liability it seems a possibility that a dealership could sell a vehicle, offering $7,500 off the price, contingent on them receiving money from the IRS, and if that did not work out on their end due to limited liability, then that $7,500 could unexpectedly end up on the customer.

This could be totally wrong though!

 

[TaxmanHog]

I am also curious if the tax liability is moving over the dealership, how much tax liability do they have? Or does that not matter? I don't have any clarity on that one.

If it is solely based on their liability it seems a possibility that a dealership could sell a vehicle, offering $7,500 off the price, contingent on them receiving money from the IRS, and if that did not work out on their end due to limited liability, then that $7,500 could unexpectedly end up on the customer.

This could be totally wrong though!

Using the working concept, dealerships often have large payroll tax liabilities, if the IRS is using this as a conveyance path then it makes economic logic, but I'm not certain they are doing this.

Note this methodology has been used in the past (for other reasons) to pass through credits to a business with modest / minimal corporate income tax liability

 

[bmwhitetx]

Using the working concept, dealerships often have large payroll tax liabilities, if the IRS is using this as a conveyance path then it makes economic logic, but I'm not certain they are doing this.

Note this methodology has been used in the past (for other reasons) to pass through credits to business modest / minimum corporate income tax liability

This Treasury guidance has a lot of info on how this transfer credit will work. I'm not a tax guy but a cursory read seems to indicate the dealer will be okay in this with no increased tax liability, income, etc.

 

[TaxmanHog]

This Treasury guidance has a lot of info on how this transfer credit will work. I'm not a tax guy but a cursory read seems to indicate the dealer will be okay in this with no increased tax liability, income, etc.

Yes, I agree.

Though it concerns me that a dealer advanced a credit to a customer "in anticipation" that they could make a claim after 1/1/24 for sale made prior to 1/1/24 as discussed in another thread.

If I'm understanding that situation correctly, the dealer is not going to get a credit payment to them and likely won't have recourse against the customer.

The customer could technically file a 1040 2023 and related schedules to claim a credit, if they did .... IMHO ..... they should hand that money back to the dealer.

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