Quote:
Originally Posted by JSH
I'm not a lawyer either but I can read the text. It says "the credit which would be allowed to such taxpayer" and then clarifies "with respect to the vehicle for
which the credit is allowed under subsection (a)" Section A has specific rules for what credit is allowed per vehicle. None of that section deals with income or taxed owed.
If you just took the credit yourself it would be nonrefundable and limited to the taxes you owe in the year you buy the car. If you transfer the credit to the dealer - it is no longer based on your income. Just as if you lease an EV the credit is not based on the buyer's income or taxes. For years people that don't make enough money to pay $7500 in taxes have been leasing EVs so that they can get the full $7500. Nothing changed for that lease "loophole" in the IRA and congress specifically added the option to buy the car and still get the full credit at point of sale. Personally I don't think this was an error or a loophole. Congress laid out rules that would make the credit more palatable to the general public that have been talked about for months - and then wrote in an exception that would allow FAR more people to take the credit.
However - if I'm wrong about this there is still the lease "loophole" for those that don't pay $7500 in federal income taxes. Nothing changed there. At the end of the day someone that doesn't pay a dime in income taxes can still get the full credit.
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But then if it's based on the dealership income or company income either lease or this point of sale, don't those places make over the income cap and therefore make them ineligible?
It was a terrible bill slapped together last minute and done with big chunks in backrooms away from public scrutiny.
It will be a wait and see how the IRS interprets it because that's what will matter. Right now, don't have $7500 in tax liability, you don't get $7500. Make over $150,000 which would give you thar much in liability and you don't qualify for $7500. There is this narrow range of incomes that actually maximize the credit. Probably a single person making from $80,000 to $150,000 or a married couple making from $120,000 to 300,000.
I saw an article talking about getting both the maximum Oregon $7500 rebate and the max federal $7500 credit but I pointed out I didn't think this would be possible as the max income for the Oregon $5000 low to medium income rebate is $50,000. If you had kids that could go up, but then you have so many federal deductions you won't hit a $7500 liability there.