Quote:
Originally Posted by Isaac Zachary
Despite rumors, according to the IRS the tax credit will still be "non-refundable" even after it becomes point-of-sale. So you can't owe less than the tax credit at the end of the year to benefit from all of it. If you get the full credit applied at the point of sale but then owe less at the end of the year you'll have to pay that back. That throws pretty much all median wage or less earners out from being able to get the full credit or $7,500. A married couple filing jointly that makes $70,000 will owe around $4,900 if they don't have any other deductions. If they have kids that owed tax will be even less, so less of a credit can be applied without having to pay part of it back at the end of the year.
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I'm not going by rumors - I actually read the bill.
In 2024, there will be the option to transfer the tax credit to the dealer. The dealer takes the credit not the buyer so it is no longer dependent on the financial situation of the buyer. This is the same way that leasing works today and under the old tax credit.
The difference between the old and new tax credit is that the law specifically states that if the buyer transfers the credit to the dealer the dealer MUST by law role the full value of the credit into the purchase agreement as a point of sale discount. Under the old law the company leasing the vehicle was under no obligation to roll in the tax credit - it was purely up to them. Most rolled in the full credit so they could advertise a low lease price but some did not and kept a portion or the entire tax credit for themselves as extra profit.