Anyone know whether the IRS considers any of the EV rebates to be taxable?

Discussion in 'Clarity' started by Texas22Step, Aug 17, 2018.

  1. Eddgie

    Eddgie Active Member

    Yes Craze1cars us correct...The federal tax credit is exactly that. If you own $9000 in taxes, when the credit is applied, your taxes would be reduced to $1500.

    If though, you only owe $5000 in taxes, you would only get $5000 of credit. You would not pay any taxes, but you would leave $2500 on the table.

    The state of Texas "rebate" though generates a 1099-MISC, and to the best of my knowledge, a 1099-MISC means that it is treated as income.

    The tax credit though is applied directly to the filer's federal income taxes owed. If they owe over $7500, they get to subtract $7500 from the bill, and if they own less than $7500, they don't pay any taxes at all (and if they had withholding, they would get all of that money as a refund).

    Absolutely a tax credit though. I just did my Turbo Tax and I filled out the 8936 tax form an it reduced my taxes by $7500.

    https://www.irs.gov/pub/irs-pdf/f8936.pdf

    I think though OKO may have been talking about the Texas rebate, which is fully taxable. You receive a 1099-MISC and that goes to the IRS as well, so the computer is going to match that to the filer's form and if the filer does not claim it, the IRS will send out a letter saying that it is taxes owed.
     
    Last edited: Jan 26, 2019
  2. oko

    oko Member

    That is right, I was not talking about $7500 tax credit. It was related to state rebates.

    At first I thought "look: this is a rebate for car purchase, it should not be taxable". But then it started to make sense. If rebates from third parties were not taxable, then every employer would pay employees "rebates" for their purchases instead of paychecks, which would not be federally taxable. Say I spent $1000 for groceries and $1500 for rent this month. And my employer gave me $2500 as a rebate (not paycheck) for these purchases. I should not pay taxes for this 2500, right? It is just a rebate!! :).
     
    Alex0913 likes this.
  3. Alex0913

    Alex0913 Member

    Any estimation of how much one would pay in state taxes for a $2,500 rebate?
     
  4. petteyg359

    petteyg359 Active Member

    That depends entirely on what state you're in. If you're talking about the Texas one, Texas has no income tax, so $0.
     
  5. 4sallypat

    4sallypat Active Member

    Anyone have info on CA CVRP tax rebate ($1500) and CA utility rebate ($1000) on IRS taxation ???
     
  6. petteyg359

    petteyg359 Active Member

    Again, it's income. It will be taxed at whatever bracket you're in after deductions. Nobody but you accountant (or TurboTax, TaxAct, etc.) can tell you how much that will be.
     

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