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EVDRIVER
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Re: How Exactly Will The Tax Credit Work

Wed May 05, 2010 3:54 pm

Please note that those in CA that get the state $5K will most likely be required to claim it as taxable income, so it's not really $5K after you pay taxes on it.
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Randy
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Re: How Exactly Will The Tax Credit Work

Wed May 05, 2010 3:58 pm

I could see residents of CA paying sales tax on the whole amount of the car, but I thought the state rebate was exactly that, a rebate on money I've already paid for the car. If they taxed the rebate, wouldn't that be double-taxing? Of course, nothing would surprise me :)

Randy

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EVDRIVER
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Re: How Exactly Will The Tax Credit Work

Wed May 05, 2010 4:13 pm

Randy wrote:I could see residents of CA paying sales tax on the whole amount of the car, but I thought the state rebate was exactly that, a rebate on money I've already paid for the car. If they taxed the rebate, wouldn't that be double-taxing? Of course, nothing would surprise me :)

Randy



Just like the solar rebates, they need to be claimed as income. There is a difference between sales tax and income tax of course.
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mwalsh
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Re: How Exactly Will The Tax Credit Work

Wed May 05, 2010 4:17 pm

Does anyone know if the tax credit for the charger carries over? That's where I could loose out, if it doesn't.
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earther
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Re: How Exactly Will The Tax Credit Work

Wed May 05, 2010 4:39 pm

EVDRIVER wrote:I have read the credit does not forward- the terms are listed on the IRS site I believe. This credit then only favors individuals in certain income brackets. Seems a bit discriminatory.


As a teacher, my salary is low enough that there's NO WAY I'll ever come close to paying $7500 in federal taxes in a single year... not even half that.
However, a tax credit is a tax credit -- I can't really complain about the government incentivizing me to purchase an EV just because rich people are incentivized more.

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evnow
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Re: How Exactly Will The Tax Credit Work

Wed May 05, 2010 5:53 pm

earther wrote:As a teacher, my salary is low enough that there's NO WAY I'll ever come close to paying $7500 in federal taxes in a single year... not even half that.
However, a tax credit is a tax credit -- I can't really complain about the government incentivizing me to purchase an EV just because rich people are incentivized more.

-Steve


I'm not sure whether it is just income tax or income tax + payroll taxes.
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EVDRIVER
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Re: How Exactly Will The Tax Credit Work

Thu May 06, 2010 7:32 am

evnow wrote:
earther wrote:As a teacher, my salary is low enough that there's NO WAY I'll ever come close to paying $7500 in federal taxes in a single year... not even half that.
However, a tax credit is a tax credit -- I can't really complain about the government incentivizing me to purchase an EV just because rich people are incentivized more.

-Steve


I'm not sure whether it is just income tax or income tax + payroll taxes.



I was curious about that- if it applies to any federal taxes I may do some creative IRA flipping or capital gains stuff if needed. Could be interesting. I'm going to research this.
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chijayhawker
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Re: How Exactly Will The Tax Credit Work

Thu May 06, 2010 8:14 am

EVDRIVER wrote:Please note that those in CA that get the state $5K will most likely be required to claim it as taxable income, so it's not really $5K after you pay taxes on it.


I would double check that. Just like people thought the "Cash for Clunkers" cash was to be treated as taxable income. It wasn't. It was a lie spread by extreme right-wing whack jobs hoping for the failure of the program so that Obama would look bad.

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EVDRIVER
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Re: How Exactly Will The Tax Credit Work

Thu May 06, 2010 8:23 am

chijayhawker wrote:
EVDRIVER wrote:Please note that those in CA that get the state $5K will most likely be required to claim it as taxable income, so it's not really $5K after you pay taxes on it.


I would double check that. Just like people thought the "Cash for Clunkers" cash was to be treated as taxable income. It wasn't. It was a lie spread by extreme right-wing whack jobs hoping for the failure of the program so that Obama would look bad.



I will research this but this comes from the state, all the solar rebates are taxable, the utility rebate, city rebate all had to be claimed as income:( The funniest part of the rebate is that they require your to return a pro-rated amount divided by 36 months if you sell the car before that time period has elapsed. Good luck with the CA DMV tracking that, and then if they could they are going to come after you? Funny rule.
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planet4ever
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Re: How Exactly Will The Tax Credit Work

Thu May 06, 2010 2:13 pm

I agree with EVDRIVER, I'm quite certain the rebate is legally income. As such, it is taxable unless Congress (for the IRS) or the State Legislature (for CA FTB) passes a law to exclude it.

It is also true that you must return a pro-rated amount if you sell the car, terminate the lease, or leave the state, within 36 months. I don't see that it would be hard to track (except possibly the "leave the state" part), since the vehicle must be registered with the CA DMV before you can even apply for the rebate, and must remain registered in CA during the three years.

... Of course actually collecting the excess rebate after you have disappeared could be more difficult. But you might be a very unhappy camper if they do catch up with you, since you would have signed a legal agreement that you would notify them of any change of address.
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