Lasareath said:
Thanks All about that Tax stipulation. I did not know about that rule.
I will update my statement on the site.
So if someone pays exactly $7500 they will get all of it back? Or do they need to pay in $10000 ?
It would seem to me that somebody at the IRS would be "Hey, he's getting a free ride, we need a minimum of X and then he can get the Tax incentive"
TIA,
Sal
It's all about the "taxes owed" line on your 1040, 1040c, 1040ez. So long as your taxes owed is =7500 or more you get 7500 off your taxes owed.
The refund amount remains Taxes Withheld - Taxes Owed = Refund
note that the Refund amount in the form of a check or direct deposit won't always equal the amount you saved due to the EV credit.
so if you have 7500 withheld and owed 7500 before the EV credit you get a refund of $7500
if you have 5000 withheld and owed 7500 before the EV credit you get a refund of $5000 (you got $7500 savings from the EV but didn't have enough withheld to see it on the refund check, without the EV you would have had to pay an extra 2500 at tax time)
if you have 5000 withheld and owed 5000 before the EV credit you get a refund of $5000
if you have 7500 withheld and owed 5000 before the EV credit you get a refund of $7500 (but only $5000 was because of the EV, you should have changed your withholding earlier in the year to avoid this or at least reduce it)
Notice how the math hides or exaggerates the EV credit if you have an imbalance between tax withheld and tax owed.
They don't care if you get it exactly on the line, you don't have to owe more than $7500 to get the full amount. But you do have to pay attention to how much withholding you have vs tax owed to have an idea what your true math is.
disclaimer: I'm not a tax professional. This is not intended nor should it be used as a substitute for tax, audit, accounting, investment, consulting or other professional advice.