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How will tax credit work?

Whataboykie!

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Does anybody have more definitive information on how the tax credit works?

Does it only apply when you file your taxes for the year?, or can you deduct it from the sales price?

I believe most or some states also offer incentives for EV's. I believe Florida has $1000 EV incentive? if the battery is over 15Kwr, which eliminates golf carts.
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SANZC02

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Does anybody have more definitive information on how the tax credit works?

Does it only apply when you file your taxes for the year?, or can you deduct it from the sales price?

I believe most or some states also offer incentives for EV's. I believe Florida has $1000 EV incentive? if the battery is over 15Kwr, which eliminates golf carts.
The Federal Tax credit is just that. When you file it will come off the top of what you owe.

The state incentives are all different so you would need to follow up with your state agency.
 
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Whataboykie!

Whataboykie!

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The Federal Tax credit is just that. When you file it will come off the top of what you owe.

The state incentives are all different so you would need to follow up with your state agency.
Thanks, yeah that's what I thought. Would have been nice to take it off the price right from the start though!
 

DucRider

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Thanks, yeah that's what I thought. Would have been nice to take it off the price right from the start though!
Some people reduce their withholdings so they don't have to wait to get a refund from the IRS.
Some reduce it for the entire year, others take it to zero until the figure their tax bill will balance and then have withholding resume.
If you are self employed/retired/etc, you can adjust the quarterly estimated tax payments.
That being said, the tax (or legal) advice you get on the internet is worth every penny you pay for it ?
 

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The Federal Tax credit is just that. When you file it will come off the top of what you owe.
Technically it's deducted from your tax liability.

Depending on your withholding or quarterly estimated tax payments, you may owe, but are also more likely to receive a refund.

If your tax liability is less than the value of the credit, then you're capped at claiming the lesser amount for the credit.
 

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DB-EV

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Some people reduce their withholdings so they don't have to wait to get a refund from the IRS.
Some reduce it for the entire year, others take it to zero until the figure their tax bill will balance and then have withholding resume.
If you are self employed/retired/etc, you can adjust the quarterly estimated tax payments.
That being said, the tax (or legal) advice you get on the internet is worth every penny you pay for it ?
Agree with the last point. My understanding of function at the federal level, it is highly likely any of us would have a real world benefit from this (i.e. you will get that dollar for dollar benefit), but depending on extensions, etc., you are fronting that money for the 4-10 months until you file your tax return.

Plain english: you will see the benefit, but basically if you buy in 2021, the rebate is delayed until April 2022. The fed government is saying, we will pay you 7500 if you buy the vehicle. You are bearing the interest cost between when you buy and when you file taxes.
 

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Technically it's deducted from your tax liability.

Depending on your withholding or quarterly estimated tax payments, you may owe, but are also more likely to receive a refund.

If your tax liability is less than the value of the credit, then you're capped at claiming the lesser amount for the credit.
We are splitting hairs here on terminology. First I figure anyone purchasing an $80k truck most likely will have a tax liability > 7500 (might not be a valid assumption but felt like a safe one to make).

As I stated, it comes off the top of what you owe (total tax liability) not saying that you are cutting a check for that when you file since most likely either through quarterly filings or payroll deductions you have already covered most of the total liability.

I was more answering the question that was asked, which was can it be done at time of purchase or is it settled during filing.

To be clearer, you pay the money upfront and deal with the Tax Credit at filing.
 

CommodoreAmiga

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We are splitting hairs here on terminology. First I figure anyone purchasing an $80k truck most likely will have a tax liability > 7500 (might not be a valid assumption but felt like a safe one to make).
I used to agree with that, but I've had several people tell me that small business owners may find themselves in a situation where they don't have enough MAGI to claim the full credit.
 

EarlyAdptr

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Mjhirsch78

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The devil is in the details. In Washington state, “In addition, the vehicle must be sold or valued at $45,000 or less if new and $30,000 or less if used.”

So no state bonus for us.
 

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Does anybody have more definitive information on how the tax credit works?

Does it only apply when you file your taxes for the year?, or can you deduct it from the sales price?

I believe most or some states also offer incentives for EV's. I believe Florida has $1000 EV incentive? if the battery is over 15Kwr, which eliminates golf carts.
Everything mentioned thus far applies to a purchase. If you lease (will leasing even be available??), then it does not apply.
 

jjwolf120

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No leasing, at least direct from Rivian, at launch.
 
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Whataboykie!

Whataboykie!

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Some people reduce their withholdings so they don't have to wait to get a refund from the IRS.
Some reduce it for the entire year, others take it to zero until the figure their tax bill will balance and then have withholding resume.
If you are self employed/retired/etc, you can adjust the quarterly estimated tax payments.
That being said, the tax (or legal) advice you get on the internet is worth every penny you pay for it ?
Thanks, it's making sense now, you can actually maneuver it to suit your situation.
 

DucRider

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The devil is in the details. In Washington state, “In addition, the vehicle must be sold or valued at $45,000 or less if new and $30,000 or less if used.”

So no state bonus for us.
A bit more consistent than Oregon.
A fully decked out Model Y @ $74,990 will qualify for the Oregon $2,500 rebate.
A base R1T @ $67,500 will not ?

Tesla offers a version of the Model Y at less than $50K, so therefore all Model Y purchases qualify.
 

jjwolf120

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A bit more consistent than Oregon.
A fully decked out Model Y @ $74,990 will qualify for the Oregon $2,500 rebate.
A base R1T @ $67,500 will not ?

Tesla offers a version of the Model Y at less than $50K, so therefore all Model Y purchases qualify.
So, you just need Rivian to announce the pricing of the small pack version at less than 50k. It seems like some of these incentives are ripe for gaming.
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