EV Tax Credits 2024

[Isaac Zachary]

https://www.youtube.com/watch?v=fH2ACPXRnpE

Note the parts I've underlined in this transcript down towards the bottom:

Now, as I mentioned, in previous years, you paid the full price for the vehicle and then you claimed it on your taxes and if you qualified you got the money taken off your taxes. It's different now. It's a... they call it cash on the hood because it happens at the time of purchase at the dealership, the dealers' automatically going to deduct the tax credit from the purchase price. What happens is then they file papers with the IRS and within 72 hours the IRS pays the dealer For the tax credit; whatever was claimed: $7,500 or $3,750, the dealer is made whole.

Now, the problem can happen where you originally thought you were going to qualify for the tax credit but then at the end of the year you don't. So what happens in that case? You have to pay the IRS back.

So, the only way that's going to happen is if you don't think that you're going to make the limit, like, uh, I mentioned earlier the $300,000 limit for uh, married filing, jointly. Let's say, you're projecting your income this year to be at $270,000 and then you or your significant other makes a lot more money than you expected. Now, you exceed, the $300,000 limit, you'll owe The tax credit that you got on your car to the IRS.

Now, luckily it doesn't happen the other way. Let's say you don't earn enough money to fully take advantage of the tax credit. This is how it was in previous years: if you didn't or pay enough tax or oh enough tax on the income you earned, you didn't get the full tax credit. Luckily that's changed this year. And now there's no minimum income.

So you don't have to worry about, let's say you lose your job, halfway through the year, and you've gotten the $7,500 federal tax credit and now you're not earning enough income to pay enough tax. To have a $7,500 tax liability, you would have to pay the IRS back. I mean, talk about a double whammy; you lose your job and now you got to pay them for a tax credit. That's not the case anymore. They dropped that this year. So now you don't have to worry about the lower end, but you do have to worry about the upper end. Which, I guess it's not a bad thing if you earn more money than you expected.

What I don't know is if on the paperwork you have to have proof that you should have a $7,500 tax credit for the year purchased or if it's just no longer considered at all.

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?

[Isaac Zachary]

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.

[Hersbird]

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.

[Isaac Zachary]

Originally Posted by Hersbird

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.

Very tempting. I my case, I do believe that Colorado would also add up to another $4,000 on top of that incentive, although I'm not 100% sure.

[redpoint5]

Originally Posted by Isaac Zachary

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.

You'll never get a new EV for $12,500; used ones are way more than that now.

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.

Originally Posted by Hersbird

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.

Talk to bwilson4web. As far as I know, they're good cars but the tires are a custom size which creates a headache and extra cost. It has active thermal management, so I assume the batteries generally hold up decently.

There's a mod to double the fuel capacity too.

[Isaac Zachary]

Originally Posted by redpoint5

You'll never get a new EV for $12,500; used ones are way more than that now.

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.

The $12,500 is a $20,000 Bolt, factoring federal tax credit (so originally $27,500), but also factoring the additional Colorado $7,500 incentive.

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.

[Hersbird]

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.

[redpoint5]

Originally Posted by Isaac Zachary

The $12,500 is a $20,000 Bolt, factoring federal tax credit (so originally $27,500), but also factoring the additional Colorado $7,500 incentive.

I'm saying if there was a bazillion dollar subsidy, you will not find a new Bolt for $12,500. The car would then be priced at a bazillion twenty-four thousand, because that's the way supply and demand work to set price.

[Isaac Zachary]

Originally Posted by redpoint5

I'm saying if there was a bazillion dollar subsidy, you will not find a new Bolt for $12,500. The car would then be priced at a bazillion twenty-four thousand, because that's the way supply and demand work to set price.

The thing is that I'm looking outside of my state. In other states there might not be an incentive. So it's not as easy as dealers just adding the incentive to their vehicle's price in order for them to benefit from it because there's still a supply and demand that varies with each location.

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).

[redpoint5]

Originally Posted by Isaac Zachary

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).

Sounds like CO is very bad at writing law that actually accomplishes the purposes they seek. That said, arbitrage works on the price edges; there's hardly a scenario where there's thousands to be had with little effort.

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.