EV tax credit delaying IRS refund?

[wgreenhouse]

We filed our 2019 federal tax return in March. With credit for the purchase of a new Bolt EV in March 2019 (just before the quota was filled and the credit disappeared), we expect a nice refund but nothing so far and no information available online about status. Anyone sharing this experience?

 

[TheLondonBroiler]

I received my state refund, but still no federal. Apparently in years past, there weren't any checks in place and people who weren't eligible for the credit, were able to exploit this. Now the IRS probably does a dealership visit and interrogates your salesperson's mother.

Don't worry, I'm sure we'll receive interest on the refund as well as a note to say they're sorry it was delayed.... :lol:

 

[BoltEV]

I presume both of you paid withholding taxes and/or quarterly estimated tax payments in order to increase your refund with your EV tax credit.

I purchased my latest 19 Bolt EV one year ago and was told by my accountant that the $3,750 tax credit for me was wasted as I owe no federal income tax, it is not applicable to my Uber driving generated self employment tax and is not available to me for next years federal income tax.

Had I known that in advance, I would have put my daughter on title with me, so that she could use the tax credit!

 

[DucRider]

I presume both of you paid withholding taxes and/or quarterly estimated tax payments in order to increase your refund with your EV tax credit.

I purchased my latest 19 Bolt EV one year ago and was told by my accountant that the $3,750 tax credit for me was wasted as I owe no federal income tax, it is not applicable to my Uber driving generated self employment tax and is not available to me for next years federal income tax.

Had I known that in advance, I would have put my daughter on title with me, so that she could use the tax credit!

Time to find a different accountant.
Self employment tax is income tax (just no employer to do the withholding). There are Social Security and Medicare portions you pay in addition to the Income Tax. It doesn't matter if you "owe" at the time of filing, if there was any tax liability shown on your return, the credit can be applied..

 

[BoltEV]

I presume both of you paid withholding taxes and/or quarterly estimated tax payments in order to increase your refund with your EV tax credit.

I purchased my latest 19 Bolt EV one year ago and was told by my accountant that the $3,750 tax credit for me was wasted as I owe no federal income tax, it is not applicable to my Uber driving generated self employment tax and is not available to me for next years federal income tax.

Had I known that in advance, I would have put my daughter on title with me, so that she could use the tax credit!

Time to find a different accountant.
Self employment tax is income tax (just no employer to do the withholding). There are Social Security and Medicare portions you pay in addition to the Income Tax. It doesn't matter if you "owe" at the time of filing, if there was any tax liability shown on your return, the credit can be applied..

Hey Gary: what's your address?

I fired my accountant and he has boxed up all my files and will sent them to your accountancy office!

Hahahahaha: I notice you came out of "retirement" of not having posted a message on this Forum for one year, to make this incorrect statement to me.

Must have been a slow year for you!

See you in 2021! LOL

https://teslamotorsclub.com/tmc/threads/7-500-federal-tax-credit-bummer.65930/

 

[SparkE]

I presume both of you paid withholding taxes and/or quarterly estimated tax payments in order to increase your refund with your EV tax credit.

I purchased my latest 19 Bolt EV one year ago and was told by my accountant that the $3,750 tax credit for me was wasted as I owe no federal income tax, it is not applicable to my Uber driving generated self employment tax and is not available to me for next years federal income tax.

Had I known that in advance, I would have put my daughter on title with me, so that she could use the tax credit!

Time to find a different accountant.
Self employment tax is income tax (just no employer to do the withholding). There are Social Security and Medicare portions you pay in addition to the Income Tax. It doesn't matter if you "owe" at the time of filing, if there was any tax liability shown on your return, the credit can be applied..

Self employment tax is taxable income. It is listed on your tax form as a tax (on your 1040). It is added into your total tax liability. Now, unless the law on the EV tax credit specifically says "only if you are an employee" (which I doubt), it is a tax. It doesn't matter if you have to write a check when you file because you have already pre-paid enough. What you pay when you file is the "amount due", not the tax liability. Hey if you made 120K, and didn't have to write a check, you could still apply the tax credit, and the govt would be sending YOU a check. It doesn't matter where the money came from, stocks, bonds, stock options, ESPP, whatever ; if it adds to your taxable income enough to generate a tax liability then you can file for a tax credit. You can file a 1040X (amended return) at some later point to get the tax credit if you had ANY tax liability, within 3 years (well or until a law is passed eliminating the credit, or the law says "can only be taken the year the car was bought"). All this is moot if you simply didn't make enough money to have a tax liability.

Also (too late now) you could have moved money from a traditional IRA to a Roth IRA "for free" . You move just enough money to make sure your tax liability would be $3500 (or whatever credit you would get).

 

[BoltEV]

All this is moot if you simply didn't make enough money to have a tax liability.

You are unnecessarily confusing the issue; Gary is wrong!

If you change my facts, then you could make a situation where perhaps Gary is correct.

Here are the facts:

I had NO income tax; Lines 12b and 14 on my 1040 are ZERO!

I had a self employment tax of $X; as stated in Line 15.

Being self employed, I had NO taxes withheld.

The total tax I owed, Line 23, is the sum of ZERO plus $X and hence is $X.

I received no use from the $3,750 federal tax credit for purchasing the Bolt EV in 2019, because, again, my income tax was ZERO!

Gary is flat out wrong.

Also (too late now) you could have moved money from a traditional IRA to a Roth IRA "for free" . You move just enough money to make sure your tax liability would be $3500 (or whatever credit you would get).

Thank you for offering me a way to generate taxes, but your fact situation, (IRA to Roth IRA) is inapplicable to me. Maybe I could have purchased some oil wells, too, but I didn't!