2011 TAX TIME Questions

[Venk]

Hello all,

3 questions for the group about the 2011 taxes

1) do I have to Claim the $2,500 rebate from CA state as income somewhere?
I hope not


2) In using form 8911 to get the rebate for the EVSE, can you claim the installation costs as well as the cost of the charging unit? I am confused when it says depreciating assets.

3) Has anyone confirmed that TurboTax 2011 will support form 8911. Their website says it will, but I was hoping someone bought it and confirmed.


Thanks Again
Venk

 

[linkim]

Hello all,

3 questions for the group about the 2011 taxes

1) do I have to Claim the $2,500 rebate from CA state as income somewhere?
I hope not


2) In using form 8911 to get the rebate for the EVSE, can you claim the installation costs as well as the cost of the charging unit? I am confused when it says depreciating assets.

3) Has anyone confirmed that TurboTax 2011 will support form 8911. Their website says it will, but I was hoping someone bought it and confirmed.


Thanks Again
Venk

I have TurboTax 2011 Deluxe, and form 8911 is in there, as well a Form 8936 Qualified Plug-In Electric Drive Motor Vehicle Credit.

 

[coqui]

Also don't forget Form 8936 Qualified Plug-In Electric Drive Motor Vehicle Credit.

 

[asinclair]

#1, I hope not...I got the $5000 last year...
#2, I claimed it for 2010 (had charging station installed by Aerovironment in Dec 2010) and included the installation cost and it was approved.
#3, TurboTax works with both credits (charger and Car)

 

[garygid]

Does H&R Block include Form 8936 for the $7500 tax credit?

 

[redLEAF]

Hello all,

1) do I have to Claim the $2,500 rebate from CA state as income somewhere?
I hope not

Thanks Again
Venk

You should know right way if they ask for a W-9 tax form; if they do then it will be considered as income on your federal tax return as the state will send you a 1099 form detailing the amount as not being taxed the following year. In IL's case they required a completed W-9 as part of the doc's submitted to get the IL EPA 10% off MSRP rebate so I'm expecting to have to pay taxes on it on my 2012 tax return. The federal $7,500 one is a tax credit so no 'funds' are exchanged; IL EPA rebate is expected to be an actual check (even though of course when you think 'rebate', you believe it's just a refund), if CA's in the form of a check I would think it will be taxable but as always check with 'tax professional' --- in my case I've used the same one for years starting when my wife had her own business and he always keeps me out of trouble (and audits!) as well as maxed out my deductions.

 

[TLeaf]

Does H&R Block include Form 8936 for the $7500 tax credit?

Haven't checked yet, but I recall having to fill out some IRS form separately and modifying my tax return in-program (TaxCut) in order to get the credit for my Vectrix scooter last year. I'm hoping that the $7,500 credit is "mainstream" enough that H&R Block will decide to account for it this time around..

 

[oakwcj]

I'd be very surprised if the CVRP rebate were considered to be income for Federal Income Tax purposes. The application form didn't even request a SSN, so they couldn't very well be planning to send out 1099 forms.

 

[ebill3]

Does H&R Block include Form 8936 for the $7500 tax credit?

No. A call to their customer support verified that none of their packages include either the car tax credit or the EVSE credit.

Bill

 

[planet4ever]

I'd be very surprised if the CVRP rebate were considered to be income for Federal Income Tax purposes. The application form didn't even request a SSN, so they couldn't very well be planning to send out 1099 forms.

That is not enough to go on. There are many things the IRS considers to be income that you don't get W2 or 1099 forms for. Just take a look at IRS Pub 525. As one rather trivial example, did you know that jury pay is taxable income?

The only rebates I see covered in the 2010 version of Pub 525 are manufacturer or dealer rebates, which are treated as a reduction of the cost of the item, so are not taxable. However a rebate from a governmental agency is completely different from this. It is a check that you receive at a later date, and is not deducted from what you pay for the vehicle.

The 2011 version of Pub 525 is not yet available on the IRS website. I intend to wait for that to appear, then contact the IRS if it doesn't answer the question. Frankly, I expect that the California rebate is quite likely to be treated as taxable for federal income tax purposes.

Ray

 

[oakwcj]

I'd be very surprised if the CVRP rebate were considered to be income for Federal Income Tax purposes. The application form didn't even request a SSN, so they couldn't very well be planning to send out 1099 forms.

That is not enough to go on. There are many things the IRS considers to be income that you don't get W2 or 1099 forms for. Just take a look at IRS Pub 525. As one rather trivial example, did you know that jury pay is taxable income?

The only rebates I see covered in the 2010 version of Pub 525 are manufacturer or dealer rebates, which are treated as a reduction of the cost of the item, so are not taxable. However a rebate from a governmental agency is completely different from this. It is a check that you receive at a later date, and is not deducted from what you pay for the vehicle.

The 2011 version of Pub 525 is not yet available on the IRS website. I intend to wait for that to appear, then contact the IRS if it doesn't answer the question. Frankly, I expect that the California rebate is quite likely to be treated as taxable for federal income tax purposes.

Ray

Of course, it's not enough to go on, but the application form from CSE is a State government form. It's reasonable, but not dispositive, to conclude that the state agency believed that it was not required to notify the IRS of the payment. Jury pay is technically reportable income, but I doubt that very many people report it, because there isn't any 1099. In the absence of a 1099, how is the IRS going to track these payments?

 

[EVDRIVER]

I'd be very surprised if the CVRP rebate were considered to be income for Federal Income Tax purposes. The application form didn't even request a SSN, so they couldn't very well be planning to send out 1099 forms.

That is not enough to go on. There are many things the IRS considers to be income that you don't get W2 or 1099 forms for. Just take a look at IRS Pub 525. As one rather trivial example, did you know that jury pay is taxable income?

The only rebates I see covered in the 2010 version of Pub 525 are manufacturer or dealer rebates, which are treated as a reduction of the cost of the item, so are not taxable. However a rebate from a governmental agency is completely different from this. It is a check that you receive at a later date, and is not deducted from what you pay for the vehicle.

The 2011 version of Pub 525 is not yet available on the IRS website. I intend to wait for that to appear, then contact the IRS if it doesn't answer the question. Frankly, I expect that the California rebate is quite likely to be treated as taxable for federal income tax purposes.

Ray

Of course, it's not enough to go on, but the application form from CSE is a State government form. It's reasonable, but not dispositive, to conclude that the state agency believed that it was not required to notify the IRS of the payment. Jury pay is technically reportable income, but I doubt that very many people report it, because there isn't any 1099. In the absence of a 1099, how is the IRS going to track these payments?

When you are audited and they say "what is this $5K" then you get nailed for interest and penalties. Certainly they don't track any of your income I suppose if it is under $10K and not on a 1099 why report it right. In my business I get many checks without a 1099 but if I did not report them my income would be almost $0. If the state wants to tax it I suppose they can rebate the sales tax paid on that money as well..

 

[SanDust]

1) do I have to Claim the $2,500 rebate from CA state as income somewhere?
I hope not

Not to worry. It's like cash back. In order to get 5K you have to pay 25K. No income here. It would however decrease your basis. http://www.irs.gov/publications/p17/ch12.html#publink100033109" onclick="window.open(this.href);return false; (Lots of stuff there but you can search for "cash rebates").

The more interesting question would relate to the Blink chargers people got under the Ecotality program.

 

[planet4ever]

1) do I have to Claim the $2,500 rebate from CA state as income somewhere?
I hope not

Not to worry. It's like cash back. In order to get 5K you have to pay 25K. No income here. It would however decrease your basis. http://www.irs.gov/publications/p17/ch12.html#publink100033109" onclick="window.open(this.href);return false; (Lots of stuff there but you can search for "cash rebates").

BUZZ! Wrong. Here is what that document says:

Cash rebates. A cash rebate you receive from a dealer or manufacturer of an item you buy is not income, but you must reduce your basis by the amount of the rebate.

As I said before, we are not talking about a rebate from a dealer or manufacturer. This is a rebate from the government. Maybe if you bought your car from the State of California you could treat it that way. ...

Ray

 

[oakwcj]

1) do I have to Claim the $2,500 rebate from CA state as income somewhere?
I hope not

Not to worry. It's like cash back. In order to get 5K you have to pay 25K. No income here. It would however decrease your basis. http://www.irs.gov/publications/p17/ch12.html#publink100033109" onclick="window.open(this.href);return false; (Lots of stuff there but you can search for "cash rebates").

The more interesting question would relate to the Blink chargers people got under the Ecotality program.

Two additional data points:

1. I emailed the Center for Sustainable Energy [CSE], which administers the rebate program. The response I got was "We are not tax experts over here but we do not issue a 1099. That would mean it is not taxable." I know that isn't strictly true, because the absence of a 1099 doesn't mean there is no tax liability, but it is something to rely upon. Tax law was not my favorite course when I took it a million years ago, and I'm aware that the basic rule is anything you receive is taxable income unless there is an explicit exclusion, but if the administrator of a state government rebate program doesn't think it's taxable, I'm going with that.

2. I asked a tax lawyer/accountant friend about this today. He flatly said that it isn't taxable and would only affect the basis if it were business property.

It's possible that the IRS might have a different opinion, but the worst that would happen in the highly unlikely event of an audit and an adverse determination would be liability for the unpaid taxes and interest. I think most people wouldn't even think about the possibility that a rebate would be taxable income if they didn't receive a 1099.

I think the Blink EVSEs are an even easier case, because there is consideration -- participation in the data collection process -- for the installation and the hardware.

 

[redLEAF]

1) do I have to Claim the $2,500 rebate from CA state as income somewhere?
I hope not

Not to worry. It's like cash back. In order to get 5K you have to pay 25K. No income here. It would however decrease your basis. http://www.irs.gov/publications/p17/ch12.html#publink100033109" onclick="window.open(this.href);return false; (Lots of stuff there but you can search for "cash rebates").

The more interesting question would relate to the Blink chargers people got under the Ecotality program.

The IRS passage reads below ... except that this one comes from another government entity not the dealer or mfg. I won't be surprised to get a 1099 from my state but plan to check before I file my taxes anyway and perhaps mention what CA does possibly differently

Cash rebates. A cash rebate you receive from a dealer or manufacturer of an item you buy is not income, but you must reduce your basis by the amount of the rebate.
Example.

You buy a new car for $24,000 cash and receive a $2,000 rebate check from the manufacturer. The $2,000 is not income to you. Your basis in the car is $22,000. This is the basis on which you figure gain or loss if you sell the car and depreciation if you use it for business.

 

[Yodrak]

deleted - misunderstood the post

 

[mwalsh]

Does H&R Block include Form 8936 for the $7500 tax credit?

No. A call to their customer support verified that none of their packages include either the car tax credit or the EVSE credit.

Bill

I concur, that's what they told me too.

But then they go send out a press release featuring the EV tax credit as the fifth of eight money and time saving tax tips. Loosers! :?

http://www.marketwatch.com/story/hr-block-shows-taxpayers-how-to-save-money-and-time-with-eight-tips-2012-01-10" onclick="window.open(this.href);return false;

 

[dgpcolorado]

Does H&R Block include Form 8936 for the $7500 tax credit?

No. A call to their customer support verified that none of their packages include either the car tax credit or the EVSE credit.

Bill

I concur, that's what they told me too.

But then they go send out a press release featuring the EV tax credit as the fifth of eight money and time saving tax tips. Loosers! :?

http://www.marketwatch.com/story/hr-block-shows-taxpayers-how-to-save-money-and-time-with-eight-tips-2012-01-10" onclick="window.open(this.href);return false;

I did a practice return using H&R Block and it has Form 8910 but not Form 8936. I think it is 8936 that we need for the current EV tax credit. (Right?)

Unless that changes, it appears that I will have to switch to Turbotax for the 2011 tax year.

 

[SanDust]

As I said before, we are not talking about a rebate from a dealer or manufacturer. This is a rebate from the government. Maybe if you bought your car from the State of California you could treat it that way. ...

Do we have reading comprehension issues? I didn't say it "was" cash back. I said it was "like" cash back. The fact the check comes from CARB as a rebate rather than from the dealer as cash back doesn't change the principle that buying a product doesn't generate any income unless you end up with more money after buying it than you had before. Otherwise you're just double counting the rebate -- once as gross income to the dealer and once as net income to you as the consumer. If the transaction price is $35K then that's all the gross income that can be assigned to the transaction and the only net income attributable to the transaction is the $35K minus the dealers's cost. The rebate can't magically create $5K more net income out of thin air. It simply reduces the basis.

No different than utility rebates for PV systems. In fact in CA most installers just have you assign them the rebate. You never count the rebate as income.

But hey, if you got a rebate you can treat it any way you like. The government is not going to complain.

I think the Blink EVSEs are an even easier case, because there is consideration -- participation in the data collection process -- for the installation and the hardware.

That's actually the problem in a way. You're providing a service in exchange for a charger. That's sort of the typical situation where you recognize income. (Payments for participating in medical studies can be income). I don't have a conclusion BTW. Tentatively I'd say there isn't any income because the charger is only being provided to you so that you can participate in the study. IOW it's for their convenience not yours.