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EV Tax Credits 2024
https://www.youtube.com/watch?v=fH2ACPXRnpE
Note the parts I've underlined in this transcript down towards the bottom: Quote:
I other words, there is paperwork to fill out to get the tax credit. It may ask what you made the previous years in order to see if you "should" qualify, whether you end up qualifying or not. At the end of the year if you didn't make enough you don't owe, but I don't know if you can get the credit walking in and saying "I'm not going to owe any taxes this year." Still, with Bolts as low as $20,000 in some parts of the country and a $7,500 State incentive, I'm seriously thinking about this. A brand new EV for $5,000... Is this true or am I dreaming? |
It looks like the $20,000 Bolts I'm seeing are priced with the $7,500 federal tax credit. So actually they're $27,500 or so. But with the Colorado $7,500 incentive they'd be $12,500.
Tempting, I must say. |
There is a used 2014 i3 with range extender and 50,000 miles on it for $13,000 here. It would get $3900 point of sale rebate. That would be $9100, no sales tax, for a 10 year old car thar was over $50k new. It's really nice too. I just don't know much about the I3, but there aren't many other used cars 2010 or newer with under 70k miles under $10k. Stuff like Focus, Dart, Kia, Hyundai, not BMW.
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Best price I've seen on the forum after factoring in all the subsidies is $21k, which is still a fantastic price. I'd buy one now if I could pick it up at that price, considering that's what the used ones are going for. Quote:
There's a mod to double the fuel capacity too. |
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The cheapest used Bolt on Cars.com is $10,500. I'm not sure if that's including the federal tax credit or any other incentive. It seems that a lot of dealers are not being transparent about how they advertise their EV's. |
I also can't tell where you can find if a specific used car's used credit has already been used. It seems it only can be once and we are now a year into it so who knows. It does look like point of sale should work, and the dealer is a participating Ford EV dealer with many Lightning and MachE sales. I guess I have to call which I wish I could just look it up somewhere myself.
It's one of those Electronaut editions too with the top interior spec and the Rev. I don't know, I bet my wife will think it's ugly. |
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The car in question is being sold in Minnesota, which has a used EV rebate of only $600 (compared to the $4,000 incentive in Colorado). As far as I know I can get the Colorado incentive even if I buy the vehicle outside of Colorado. But I'd have to get that EV with a potentially less than 250 mile range and no heat pump from Minnesota to SW Colorado in the middle of January if I went to get it right now. I'm not sure many Coloradans are willing to do such a thing, so I doubt the Colorado incentive is influencing the price of that Bolt. When I got the 2013 Leaf I bought it for about $12,000 in Utah but got the Colorado credit at that time of about $3,000 on it bringing the price down to $9,000 (which I sold a year later for $7,000). |
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Oregon stupidly offers $2,500 for used EV purchases to "modest" income people, and it requires the vehicle to be purchased from a dealership in Oregon. It's funded by charging a 1% fee on all vehicles purchased from a dealership. If funding is insufficient, people simply don't get the $2,500 they thought they would. I'm telling you that you will never purchase a new $12,500 Bolt EV, so there's no point entertaining the idea. If that was possible, I'd be funding every CO Bolt EV purchase in the state and taking a cut of the profit. |
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All I know is that here they are advertising a new Bolt with an MSRP of $27,790 in Kentucky. The same Bolt is advertised on the main Cheverolet.com website for $21,000 after the federal tax credit. That doesn't include any state incentive, and Colorado offers a $7,500 incentive for new EV's. $21,000 - $7,500 = $13,500. $27,790 - $7,500 - $7,500 = $12,790. Not that they wouldn't try to upsell me if I went to try to purchase it. Maybe they'd be like, "Oh! You're from Colorado! This Bolt will cost you $7,500 more because you're from a state that adds another $7,500 incentive on top of the federal $7,500 tax credit. So $35,290 for you!" |
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Oregon has an idiotic $2,500 subsidy for used EVs. It doesn't send any signal to manufacturers to produce more EVs, because manufacturers aren't in the business of selling used vehicles. The used car salesmen raise the price about $2,500 compared to CA, where all the cars come from. More CO2 is produced, because instead of selling the used EV in the town it was traded in, they truck them up to Oregon. As my friend Nick jokes, perfect reason cannot compete with "yeah, but still". If people's feelings don't align with reason, they abandon reason. Quote:
I used to arbitrage back when the internet was relatively new, and a fantastic margin would be 25% ROI. At 100% margin, I'd arbitrage like crazy. |
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Also, if the only thing this does is enrich dealerships then that would mean it hasn't affected the sale of EV's. Are you sure that without the federal tax credit and all the different state incentives that the same number of EV's would have sold in the USA to date? Quote:
Why don't you demonstrate your point instead? And would you plan that we transport those few Bolts from the East Coast to Colorado and still make a profit? The Avalon I bought out of state because I could get it for $10,000 cheaper in Florida or Texas. There wasn't a single one for under $25,000 in Colorado at the time, just like there aren't any Bolt's for under $35,000 here in Colorado either. I'd say it's cars in general are cheaper outside of Colorado. We could just import any car into Colorado and make money if you could legally do that without a dealership license. I also didn't mind driving an Avalon from Texas near where my brother lives during my vacation time. I don't think it would be worth it for making a few extra bucks. |
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Are you sure that introducing the uncertainty of subsidies that rely on the whims of politics strengthened the confidence of automakers to produce more EVs, in a global marketplace where most countries don't have such a subsidy? Is it wise for the US to foist the tax burden on its citizens despite most manufacturers being foreign owned, and therefore a wealth transfer to other countries? With my understanding of human behavior and related economics, I think EVs would be doing imperceptivity better without market manipulation (subsidies). The only achilles heel of EVs is the crummy battery, and there's already enormous incentive to make better batteries for a ton of product categories. Quote:
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If there's money to be made on price differentials, people will do it. Back when my friend was in college, he had a fraternity brother who was buying welding masks from Harbor Freight and reselling them online for a profit. Then he found the wholesaler for Harbor Freight and put in a big order and sold them for even more profit. Then he found the manufacturer and put in a gigantic order and filled several rooms of the fraternity with welding masks and made a huge profit. My point is, even if you're GM and make the product at cost, that cost is above $12,500. You cannot buy an expensive retail product at way below cost. |
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There's a $7,500 federal tax credit on some new EV's and a $4,000 one on used ones, some of which are not all that expensive when compared to ICEV's. I don't care if Satan mandated the tax credit or if it was Winnie the Pooh, or if the final price of the EV would have been exactly the same without it, or if dealerships are going to be filthy rich because of my tax dollars. The thing is the tax credit is there, and if someone wants to potentially save a few bucks with an EV in the USA right now then he or she should probably be paying attention to the ins and outs of the federal tax credit and any other incentives to go along with it instead of complaining how rich dealerships are going to be off of it or how cars in all of the USA should be the same price regardless of where they're being sold. |
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I do hope you've uniquely discovered this, which is why I offer to partner with you. ... I bought 2 EVSEs that should have been free after utility incentives which met every one of their stated criteria, but they didn't give me any money because they decided there's extra criteria. I could probably sue them and win, but it's not worth my time. If you got a $12,500 Bolt EV, everyone would do it after proving it's possible. I'd do it x1000. |
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Everything is expensive here. Our health insurance just went up $400 per month. Maybe if I moved to another state as many have said then I'd have the time and money to get a $12,500 brand new EV. But if I did that I wouldn't have the Colorado incentive. I'll wait until I need a car before trying to go buy one again. |
The underline text is not true. Income requirements still apply to the federal EV tax credit when you buy through a dealer. That is written into the text of the law.
Clarification and rules from the Treasury specifically say people that make too much have to pay back the extra tax credit they received when they file 2024 taxes. It says NOTHING about people that make too little to get the credit. The author ASSUMES they will not have to pay back the tax credit but there is nothing in writing that says that AND it would be contrary to the text of the law. You also have to fill out a form stating that your income qualifies to get the full $7,500. I would avoid lying on IRS forms. What we do know for a fact is that every EV with a GVW under14,000 that is LEASED gets the full $7500 federal EV tax credit. That is given to the leasing company, who should roll that into the lease contract. If they don't - walk away and find a dealer that will deal fair. EDIT: I stand corrected- guidelines sent to dealers say this: Q4: What if a buyer has insufficient tax liability to fully use a transferred credit? (added Oct. 6, 2023) A4. The amount of the credit that the electing taxpayer elects to transfer to the eligible entity may exceed the electing taxpayer's regular tax liability for the taxable year in which the sale occurs, and the excess, if any, is not subject to recapture from the dealer or the buyer. Whether or not that is legal and will hold up in court is another matter. It is contrary to the text of the law. https://www.irs.gov/newsroom/topic-h...ehicles-credit |
So as it stands now, if I understand this correctly:
Oh boy! This is why I need to stop looking at car purchasing news until I truely need a car. |
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But you don't have to have the tax liability anymore if you do point of sale. I don't understand how they got that from the language of the law, but that's the guidelines directly from the IRS. As the only enforcement for tax laws, I'd say it's a safe bet you don't have to worry about them wanting it back. I am curious how it's going to look on the tax forms. A bad job filling out those could lead to messing up your other taxes because it doesn't wash out right.
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From shopping individual insurance policies when we lived in Alabama - the BCBS plan offered on the exchange is the same as the plan offered direct. The only difference is if you buy direct instead of on the exchange you don't get any federal subsidies to help pay for the policy. Which reminds me - I need to shop for plans again so I can adjust my retirement budget and know how much income I can realize per year before the subsidy starts phasing out. |
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The Biden administration is telling the IRS to ignore the text of the IRA and ignore income requirements on the low side. That is how they got to the current guidelines. I can't imagine that will go uncontested by groups that don't like the current administration, don't like EVs, and especially don't like EV credits. "I'd say it's a safe bet you don't have to worry about them wanting it back" Tell that to people that thought they were getting their student loans forgiven until that executive guideline was challenged in court and ruled illegal. There also is no guarantee that Biden will still be president in 2025 when we are doing our 2024 taxes. The next president may direct the IRS to require the repayment of tax credit for people with too little income to quality - just as Biden is directing the IRS to require repayment from those that make too much. |
"There also is no guarantee that Biden will still be president in 2025 when we are doing our 2024 taxes." :thumbup:
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But one reason a person might do that is that it seems impossible to find a good lease deal on a cheaper EV, like a Chevy Bolt. So, with perhaps the exception of much more expensive EV's, it doesn't seem like the lease loophole is working for those of use who'd want to save every last penny by getting a cheap EV with the $7,500 credited to the lease deal. This may change in the future as more EV's come available. |
I think I've missed something huge this whole time...
The federal tax credit is now taken at the point of sale as a reduction in the vehicle sales price? |
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The fear is that if you get the tax credit as a reduction in the vehicle sale's price but then end up not qualifying for a part or all of it, then you may have to pay it back to the IRS. |
How is that supposed to work? If it reduces the purchase price, the dealership is then floating the $7,500 until the IRS pays them back. Dealerships don't like partial payments at point of sale.
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As far as EVs that still qualify I was talking about the $4000 used credit which only has a 2 year old, under $25k from a participating dealer, max income, but none of the country or origin or materials qualifications. I do have a $4000 tax liability anyway. I didn't though have a $7500 one when I bought the Pacifica and only got $7100.
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