Federal Tax Credit regarding leased vehicles

[rockytt]

So - I think this is really obvious, but just want to clarify as I believe we're kind of on the bubble-

When purchasing an EV, one has to have paid more than $7500 to take full advantage of the credit - this is the simple part...

When leasing an EV, since the credit goes to the leasing company it doesn't matter what my tax bill was for 2013 - yes? (And no, I don't really trust the dealership to answer this one...)

 

[fengshui]

So - I think this is really obvious, but just want to clarify as I believe we're kind of on the bubble-

When purchasing an EV, one has to have paid more than $7500 to take full advantage of the credit - this is the simple part...

When leasing an EV, since the credit goes to the leasing company it doesn't matter what my tax bill was for 2013 - yes? (And no, I don't really trust the dealership to answer this one...)

Correct. Generally, any of advertised leases described in the following thread will factor in the credit when the lease rate (~$199/mo, $1k down) is determined: http://www.mychevysparkev.com/forum/viewtopic.php?f=3&t=3537

Note that the current leases don't seem to apply the credit to the residual value, so you may get screwed if you try to buy the car at the end of the lease. Also, if you live in California, you'll qualify for the $2500 rebate regardless of your income as long as you keep the car the full 36 months.

 

[rockytt]

Thanks for the quick response -
I guess what I was really getting at had to do with the fed tax credit itself. Does it matter what MY federal tax bill looked in 2013? What if I only paid $5k in taxes last year-would I only get that instead?
I realize that if I were purchasing the car myself that would be the case, but I've seen threads that seemed to indicate that since the leasing company is the actual purchaser my tax situation is not a factor.

And yes - no way I'd be purchasing my car at the end of the lease - going to be very hard to sell a used EV for the near future, that's for sure...

 

[fengshui]

Thanks for the quick response -
I guess what I was really getting at had to do with the fed tax credit itself. Does it matter what MY federal tax bill looked in 2013? What if I only paid $5k in taxes last year-would I only get that instead?
I realize that if I were purchasing the car myself that would be the case, but I've seen threads that seemed to indicate that since the leasing company is the actual purchaser my tax situation is not a factor.

And yes - no way I'd be purchasing my car at the end of the lease - going to be very hard to sell a used EV for the near future, that's for sure...

Your federal tax bill doesn't come into play for the federal credit for the car at all if you lease.

There is an additional credit for home charging stations you could explore.

 

[rockytt]

Perfect! That's the answer I was hoping for
Much appreciated and can't wait to get the new car (very soon!)

 

[TonyWilliams]

Please be advised that BMW will not pass through the $7500 federal tax credit on the new i3. Toyota pulled this same crap with the Rav4 EV, but since July 2013, they have also been passing through the credit on a leased Rav4 EV. Almost every other auto manufacturer does, but I have no first hand experience with GM.

There were previously lots of GM dealers that were scamming buyers by selling a used Volt with just a few miles on it. They would take all the tax incentives and rebates, and the unsuspecting buyer (thinking he/she was getting a truly "new" car) would get none. Caveat Emptor!

The federal tax form is IRS form 8936. Read the instructions. There is no carryover of the $7500 credit to other tax years. You would NOT use this form if you leased the qualifying EV. If you do not owe $7500 in federal taxes during the year, you can only credit the full amount you owe. Example, you owe $3423 in federal taxes for 2013, then your Dec 31, 2013 purchase (not lease) of a qualifying EV will only get you a $3423 credit, for a net zero federal tax paid. It always better to lease in this scenario and get the full $7500 passed through to you as a capitalization reduction.

Whether you lease or purchase, the $2500 California state rebate is available.

 

[cwerdna]

Please be advised that BMW will not pass through the $7500 federal tax credit on the new i3. Toyota pulled this same crap with the Rav4 EV, but since July 2013, they have also been passing through the credit on a leased Rav4 EV. Almost every other auto manufacturer does, but I have no first hand experience with GM..

Toyota was pulling the same "crap" w/the Plug-in Prius as well. They became aware from Priuschatters of the feedback about that...

I don't know if the situation has changed, as I haven't been following.

 

[kccrush]

Hi, does anyone know how to apply for the California tax credit? I'm starting to do my taxes and realized I don't know how to claim the lease of the EV Spark that I got last year. (and got screwed by the way on the lease amount - don't go to Putnam Chevrolet in Burlingame, CA

I found this link online saying that you apply for the CA rebate here: http://energycenter.org/clean-vehicle-rebate-project/faq
But I don't see what this has to do with CA 2013 tax year rebate.

Thank you to anyone who can help educate me.

Nikki

 

[TonyWilliams]

Hi, does anyone know how to apply for the California tax credit? I'm starting to do my taxes and realized I don't know how to claim the lease of the EV Spark that I got last year. (and got screwed by the way on the lease amount - don't go to Putnam Chevrolet in Burlingame, CA

I found this link online saying that you apply for the CA rebate here: http://energycenter.org/clean-vehicle-rebate-project/faq
But I don't see what this has to do with CA 2013 tax year rebate.

Thank you to anyone who can help educate me.

Nikki

You likely are "screwed" on the federal IRS tax credit, too, since you don't qualify as a leasee. Only the owner (that's not you) can claim the $7500.

This is a common practice amongst car dealers (except Tesla and Nissan) to screw the leasee out of the $7500 credit. Tesla doesn't lease, so it doesn't apply, and Nissan has always automatically rolled the $7500 into the lease as a capitalization reduction.

You still can apply for and get the $2500 credit from California.

 

[kccrush]

Hi, yes, I know I don't qualify for the federal tax rebate. But is there a form or something that I need for the CA one? If you have any background or could educate me on how to apply for the rebate, that would be good. thanks!

 

[rockytt]

It's not a tax credit, it's a check from the state-
You start the process here

 

[kccrush]

Thank you for your help

 

[dcast1079]

New to this forum (Spark EV) but I do own a 2013 Ford Focus Electric and just purchased a 2014 Spark EV today for my daughter. I have a few comments about this 7,500 tax credit now that I have experienced the good, bad and now the ugly part of this.

First Ford takes the 7,500 right off the price of the vehicle. Leased or purchased. reducing the residual by that amount. Good.
Chevy gave me about half as a down payment of 3575.00 as a down payment. BUT they do add the 7,500 into the residual. BAD
One dealer offered the 3,575 as a down but not only added the 7,500 into the residual but tried to double it! Ugly.
Why should the dealer or leaser get the full tax credit or even half of it. Anyway, I leased it with no intention of keeping after 36 months.

 

[fengshui]

Hi, does anyone know how to apply for the California tax credit? I'm starting to do my taxes and realized I don't know how to claim the lease of the EV Spark that I got last year. (and got screwed by the way on the lease amount - don't go to Putnam Chevrolet in Burlingame, CA

While you aren't entitled to the Federal Tax Credit for purchasing the vehicle, you may be able to get a tax credit for any money you spent on a EVSE at your home. See IRS Form 8911: http://www.irs.gov/pub/irs-pdf/f8911.pdf

 

[sparkyps]

Hi, does anyone know how to apply for the California tax credit? I'm starting to do my taxes and realized I don't know how to claim the lease of the EV Spark that I got last year. (and got screwed by the way on the lease amount - don't go to Putnam Chevrolet in Burlingame, CA

I found this link online saying that you apply for the CA rebate here: http://energycenter.org/clean-vehicle-rebate-project/faq
But I don't see what this has to do with CA 2013 tax year rebate.

Thank you to anyone who can help educate me.

Nikki

You likely are "screwed" on the federal IRS tax credit, too, since you don't qualify as a leasee. Only the owner (that's not you) can claim the $7500.

This is a common practice amongst car dealers (except Tesla and Nissan) to screw the leasee out of the $7500 credit. Tesla doesn't lease, so it doesn't apply, and Nissan has always automatically rolled the $7500 into the lease as a capitalization reduction.

You still can apply for and get the $2500 credit from California.

People aren't "screwed" out of the Federal tax credit when they lease, they simply don't qualify. You have to purchase to qualify for the federal tax credit.

You also don't have to have paid $7500 in federal taxes in the year you purchased the car, any unused amount of the tax credit will roll forward to future tax years. Example, if you paid $3000 in federal taxes in 2013 you could apply $3000 of the tax credit that year and the remaining $4500 would be available in future tax years.

 

[sparkyps]

BTW, Tesla does leases.

If you have someone who is trying to lease you a car and not reducing the cost of the vehicle of the residual by $7500 (or close to it), you should find someone else to lease you the vehicle.

 

[tigger19687]

Hi, does anyone know how to apply for the California tax credit? I'm starting to do my taxes and realized I don't know how to claim the lease of the EV Spark that I got last year. (and got screwed by the way on the lease amount - don't go to Putnam Chevrolet in Burlingame, CA

I found this link online saying that you apply for the CA rebate here: http://energycenter.org/clean-vehicle-rebate-project/faq
But I don't see what this has to do with CA 2013 tax year rebate.

Thank you to anyone who can help educate me.

Nikki

You likely are "screwed" on the federal IRS tax credit, too, since you don't qualify as a leasee. Only the owner (that's not you) can claim the $7500.

This is a common practice amongst car dealers (except Tesla and Nissan) to screw the leasee out of the $7500 credit. Tesla doesn't lease, so it doesn't apply, and Nissan has always automatically rolled the $7500 into the lease as a capitalization reduction.

You still can apply for and get the $2500 credit from California.

People aren't "screwed" out of the Federal tax credit when they lease, they simply don't qualify. You have to purchase to qualify for the federal tax credit.

You also don't have to have paid $7500 in federal taxes in the year you purchased the car, any unused amount of the tax credit will roll forward to future tax years. Example, if you paid $3000 in federal taxes in 2013 you could apply $3000 of the tax credit that year and the remaining $4500 would be available in future tax years.

I do not believe this is correct.
If you can't use it in the year your bought the vehicle then you lose it.

 

[VonSpark]

You also don't have to have paid $7500 in federal taxes in the year you purchased the car, any unused amount of the tax credit will roll forward to future tax years. Example, if you paid $3000 in federal taxes in 2013 you could apply $3000 of the tax credit that year and the remaining $4500 would be available in future tax years.

[/quote]I do not believe this is correct.
If you can't use it in the year your bought the vehicle then you lose it.[/quote]


This is correct if you purchase solar (You have 5 year to take the tax credit) but for EV I have to check.