Thread: 2021 EV Tax Credit Question

Hello All,

I've just sold my GLI and I'm probably going to buy the ID.4. I drove a 1st edition and while it's not a rocket ship it's quiet and comfortable.

A question about the EV tax credit (I searched but the question wasn't really addressed this way).

My question is about the "nonrefundable" explanation of this credit.

For example, if at the end of the year you have a tax liability of about $25k and you withhold at the higher single rate, you end up paying about $30k in taxes. This usually results in a tax refund of about $5k give or take. Does this mean if you bought this car and filed the 8936, you would actually receive a refund of about $12,500?

Or since it's a "nonrefundable" credit, you would have to already owe at least $7500 at the end of the tax year to fully realize the credit. The EV credit would be deducted from the "tax you owe" line? Problem is since I'm always overpaying, I always have a refund. I prefer the refund because I usually use it for projects and/or cars. If any tax people are out there, please chime in.

Also, if you think the ID.4 is corny I totally get it, but I invite you to check them out, they're pretty comfy, at least the 1st edition is.

That's hard.

ID4 doesn't seem trivial to me at all. It's even better than GLI. EV Tax Credits are non-refundable tax credits that come from buying a vehicle with a battery propulsion system that can draw power from an external power source. For instance, if you bought an EV eligible for a $ 7500 tax credit and your total federal taxes for the year came to $ 8500, you would owe only $ 1000 to the government. That's how these taxes work. It seems like a pretty interesting thing. Too bad there are no such tax credits for houses but only those basic mortgages. I'd like to take such a tax credit now on the mortgage I got from Mortgage Advice Hull, haha.