[Mick]

Did you have taxed taken from your paycheck? That was a prepayment against what you owed. If your W-4 form is filled out properly and with a reasonable number of exemptions for your circumstance, then the reason you never owed is that enough Federal Tax Withholding (it's on every stub/remittance advice) to cover the tax you owed for the year. If you paid in more than needed, you get a refund check. If you had a shortfall, you write a check for the difference to the US Treasury. What the EV credit does is offset the amount of tax you owe in the straignt calculation independent of what was withheld from your pay checks. So if you made a certain amount, you use the amount to calulate based on the tax tables the IRS form.

Simple: look at your W-2 and find your federal in come tax amount. subtract that from any return you received. That difference is could be what is refunded (offset) up to $7500 . Hope that helps.

 

[Tacoenthusiast]

Edit - Or did you just mean your tax liability is not hard to be $7500 because if you're buying this car, you are likely making enough money that your tax liability will be greater than that anyway?

This one! The liability
There's so much confusion on tax liability vs the amount of refund or rebate at years end

People forget that they're paying tax every paycheck

 

[ThunderEyes]

Lots of complicated answers to this question. Here's the simple one.

If your total taxable income in the year you bought the car is greater than $53,500, you will get the full $7500 tax credit. Otherwise, you'll get a partial tax credit which completely negates your tax liability for the year.

 

[gray52452]

This one! The liability
There's so much confusion on tax liability vs the amount of refund or rebate at years end

People forget that they're paying tax every paycheck

Technically, they are not paying tax every pay - they are having estimated future tax withheld every pay.

The only time you “pay” tax is on April 15th. And even then you are only calculating your tax. Let’s say you are married and you both earn 25K total with nothing else taken out of your paychecks. In that scenario, your standard deduction is 25.1K and thus your taxable income is $0. In this case you owe nothing.

Change the example to earning 26K - in which case after the standard deduction you owe tax on $900, which means your tax liability is $90. Your company is supposed to withhold enough money every pay such that when you look at what you owe vs what your company sent to the government on your behalf equals $90. But the company relies on you telling them how much to withhold and many people overestimate their tax liability, which causes them to have too much money sent to the government on their behalf. This is the source of the “refund” most people get.

Again using the 26K example, your liability is only $90 for the YEAR but you tell your company to withhold $90 per PAY. If you’re paid biweekly, you’ve sent the government 2340 as your estimate of your tax liability. So the government sends you a refund of 2250.

Your goal every year in the great tax game is to have your liability = your yearly withholding. Otherwise you are loaning the government money at 0% interest.

(and yea of course no one is buying at EV if they make $26K but I’m simplifying to demonstrate liability vs withholding. And technically your taxes are due on the first of the year, but the government gives you until the 15th to calculate it otherwise no one would be able to calculate correctly).

 

[Grantsi]

Switching gears a little to taxes on a state level - Illinois has a rebate/credit as of 7/1/22. Looking at the fine print it says the car ( new or used ) mist come from a “dealer licensed by the illinois Secretary of State”. Our rivian will apparantely be in good shape but I can’t figure out if the polestar will qualify…any one had any experience buying a polestar in Chicago and getting the tax credit?

 

[golfins]

You get UP TO $7500 off your tax bill in the tax year you bought the car. If you owed less than $7500 in that year, it’s only good for that amount.

Do not confuse what you net owe or get back with your total tax bill. What you paid in all year is irrelevant.

in other words, say you owed exactly $7500 in 2022 taxes. And you guessed right and withheld $7500 in taxes for the year. Then you’d owe no additional funds, or get any back, at year end.
And say you bought a Polestar in 2022. In this example, since you owed $7500, and you withheld $7500, and your net owing is $0, then because the tax credit wiped out the $7500 you owed, you would get a $7500 check back from Uncle Sam.

Doing my taxes I discovered that since I bought in October of '22 (MY23) I would have had to have a "binding contract" in August '22 to get the credit. So I missed out on free charging (for October purchases there was a $1000 discount) and will now miss the tax credit!!! (I Still love the car and would not trade it!


PS2 magnesium lrsm

 

[golfins]

I did mine through turbo tax

Did turbo tax allow the credit ? - I must have put in something wrong -- it denied mine!

MY23 LRSM Magnesiom

 

[Tacoenthusiast]

Did turbo tax allow the credit ? - I must have put in something wrong -- it denied mine!

MY23 LRSM Magnesiom

It did for me, but I got my car in January 2022

 

[HernameisElektra]

Did turbo tax allow the credit ? - I must have put in something wrong -- it denied mine!

MY23 LRSM Magnesiom

Last year I did it.

 

[golfins]

Went back and redid Turbo tax from the beginning - this time it worked!

 

[ejinaz]

Went back and redid Turbo tax from the beginning - this time it worked!

I'd be careful submitting that....anything after August 14th 2022 doesn't qualify.

 

[MyNinthNewCar]

We ordered a 2023 Polestar 2 in June, 2022; USA Delivery was in November, 2022. Did TurboTax entering Aug 14, 2022 as per IRS instructions. IRS accepted my return, and I received my tax refund (including the $7,500 tax credit) on March 15, 2023. We also got the $3,500 Massachusetts tax refund!

 

[Knucklehead]

We ordered a 2023 Polestar 2 in June, 2022; USA Delivery was in November, 2022. Did TurboTax entering Aug 14, 2022 as per IRS instructions. IRS accepted my return, and I received my tax refund (including the $7,500 tax credit) on March 15, 2023. We also got the $3,500 Massachusetts tax refund!

So you are bragging about lying on your taxes? The IRS did not tell you to use an incorrect date. Also your order date is irrelevant.

I got my on Aug 25 but did not cheat as much as I disliked the change. I could always save a lot on taxes every year by not being honest.

 

[Knucklehead]

Went back and redid Turbo tax from the beginning - this time it worked!

See my above comment. You really should not be claiming this—I’m not giving tax advice just my opinion.

 

[ejinaz]

See my above comment. You really should not be claiming this—I’m not giving tax advice just my opinion.

I agree with Knucklehead....no way the IRS instructed you to enter in a date that was not the delivery date (date vehicle was placed into service).....unless your deposit was over 5% of the vehicle cost you are opening yourself up for an audit...and I'm pretty sure the IRS will verify the date...simple as running a carfax.

 

[Tacoenthusiast]

Odds of getting audited are close to zero

Realistically you could claim it without even buying a car at all. Not that it's the right thing to do, but I'd bet lots do just that

 

[ejinaz]

Odds of getting audited are close to zero

Realistically you could claim it without even buying a car at all. Not that it's the right thing to do, but I'd bet lots do just that

Then why does the IRS form for the credit ask for dates and VIN

 

[Tacoenthusiast]

Then why does the IRS form for the credit ask for dates and VIN

But how smart is the form? Is it actually deciding the vin or does Wfghyxc87654 work?

Cheating on your taxes is poor form, but lots of people do it

 

[MyNinthNewCar]

So you are bragging about lying on your taxes? The IRS did not tell you to use an incorrect date. Also your order date is irrelevant.

I got my on Aug 25 but did not cheat as much as I disliked the change. I could always save a lot on taxes every year by not being honest.

I followed the IRS August preliminary guidance. I waited until March 1 to see if the tax forms and IRS instructions would be revised in a way to disqualify my particular situation. I followed the IRS instructions 100% in filling out the forms. I used the actual dates as per IRS instructions. I did not lie, I did not cheat.

 

[Knucklehead]

I followed the IRS August preliminary guidance. I waited until March 1 to see if the tax forms and IRS instructions would be revised in a way to disqualify my particular situation. I followed the IRS instructions 100% in filling out the forms. I used the actual dates as per IRS instructions. I did not lie, I did not cheat.

Perhaps you should talk to a professional.