Question

Electric VehicleTax rebate

Forum|Forum|4 years ago
October 27, 2021
2 replies
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For the last 2 years I have had no earned income. I run a safari tour company, but Covid has closed down all tourism of this and kind. I sold some investment stock to live on; paid tax on that income. If I purchased an Electric Vehicle with some of the after tax proceeds, will I still be eligible for EV tax rebate, bearing in mind no earned income only investment income?

Critter-3

The EV credit can only negate federal income taxes so the benefit of the credit will be wholly based on that figure. If you sold long term cap gain stocks and your income was low enough then you may not have any federal taxes to negate ... do some what if calculations before you have a credit you cannot use. Figure out how to increase your tax liability if needed like by selling more stock and/or converting IRAs to Roths.

D

dennismonk238RexiAuthor

Is the tax rebate of $7,500/( $12,500 for union shop production) offset against only earned income or can it be offset against the sale of sufficient investment stock from the sale of IRA or Roth IRA investments?

A

Anonymous

The Electric Vehicle Tax Credit is non refundable, so while it could drop your federal tax liability to zero, it won’t contribute to a potential tax refund. For example, if the tax credit for a Kia 2019 Niro EV is $7,500, but your federal tax obligation for the tax year in which you bought the car is only $4,500, you’d only be able to claim a tax credit of $4,500.

The tax credit can be used to offset any tax liability on your tax return due to investment income but it does not contribute to a potential refund.