Is the electric vehicle tax credit refundable?
I’m currently shopping for an electric car that I can cash in a federal tax credit on, but what if you don’t have a tax due? Is the tax credit refundable?
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Answer provided by
Allison Stone
Answered on Jun 23, 2022
While the federal tax credit for buying an electric car could save you thousands, there are several stipulations to keep in mind to see if you qualify.
The tax credit itself is not refundable, meaning you must have federal tax due to take advantage of it. If your tax due is less than the credit amount, you can only claim the credit up to the amount of your tax due.
This doesn’t mean to have to owe taxes when you file your return to qualify, it just means you must have a tax due as calculated from your taxable income reported on your tax return. In order to receive the full $7,500 credit, you would need to earn about $65,000 to owe enough tax.
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