To put it in its most simple form...
Since 2011 and 2012 Nissan LEAFs qualify as New Qualified Plug-in Electric Drive Motor Vehicles, the application of the Personal Credit is subject to Section 30D(c)(2)(b) of the tax code, which states:
(B) Limitation based on amount of tax
In the case of a taxable year to which section 26 (a)(2) does not apply, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall not exceed the excess of—
(i) the sum of the regular tax liability (as defined in section 26 (b)) plus the tax imposed by section 55, over
(ii) the sum of the credits allowable under subpart A (other than this section and section 25D) and section 27 for the taxable year.
For 2011, unless your regular tax liability is reduced by the foreign tax credit, section 26(a)(2) does not apply. Therefore, your personal tax credit is limited by the difference between your regular tax liability plus any additional taxes imposed by the AMT (Section 55), and the sum of credits allowable under subpart A (other than Section 30D and 25D) and Section 27 for the taxable year.
This means that, if you took no additional credits under subpart A, your credit under Section 30D can not exceed your regular tax liability, or your AMT (whichever is larger).
Therefore, not only is the AMT not a limitation to your credit, it may, under certain circumstances increase your available credit under Section 30D.
For example, if your regular tax liability is $5,000, but the tax imposed by Section 55 increases your total tax by $2,500, you can take a $7,500 tax credit under Section 30D of the tax code, even though that's more than your regular tax liability for the year.
The CP12 notice from the IRS is true, for "some credits", however it is not true for the credits specified in Section 30D of the tax code.
The simplest defense against the CP12 notice is to refer to Section 30D(c)(2)(b) of the tax code.
Last edited by Weatherman
on Wed May 02, 2012 12:54 pm, edited 1 time in total.
2013 Crystal Red Volt
2012 SV Glacier Pearl LEAF; turned in 5/12/2015:18.6K Miles:50.13 AHr:10 bars, 24% gone