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The electric car credit question

atissoonsia

I'm 2023 I got the used car that fits all requirements and plan to claim the 4k credit under the clean energy act. And I saw their that same household can claim this only once every 3 year at I remember. If in 2024 I get a new car, can I claim that credit? Or it's considered the same credit so every 3 years? Thanks!

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Accepted answers

kiarab

From what I can see and after going over the requirements, I believe you theoretically could as they are two separate credits and there is nothing about buying one type of vehicle that causes the other one to be excluded from a credit that I could find.

However, as they both are non-refundable and you can't carryover any excess credit to future years, you'd want to make sure your tax liability is large enough to make it worthwhile.

All comments

kiarab

Hello,

Great question. According to the IRS, that 3 year qualification says "Not have claimed another USED clean vehicle credit in the 3 years before the purchase date". Based on that language, it appears that the 3 year limit applies only to the Used Clean vehicle credit. https://www.irs.gov/credits-deductions/used-clean-vehicle-credit

I also review the qualifications for the normal Clean Vehicle credit, and it mentions nothing about getting a used clean vehicle. You can read the requirements here; https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

atissoonsia

https://community.freetaxusa.com/discussion/comment/380#Comment_380

Thanks, wanted to make sure that my eyes don't deceive me here :)

So, theoretically one can claim both used and new car credit in the same return? (Not my case though, wish had that kind of money to afford that lol)

if anyone else has a comment, please add

kiarab

However, as they both are non-refundable and you can't carryover any excess credit to future years, you'd want to make sure your tax liability is large enough to make it worthwhile.

atissoonsia

https://community.freetaxusa.com/discussion/comment/380#Comment_380

A quick follow up, I saw somewhere that the used car credit is per person? So, for a joint return, one year it could be one person claiming credit, next year another? Does it apply credit to just taxes from one person in the family even if the return is joint? Thank you!

KristineS

Hi assosiation,

The credit is per individual. If you file a tax return as a married couple, it is possible to have two credits. Each person may not have used the clean vehicle credit in the 3 years before the purchase date. Here's another quick IRS reference for you on this.

atissoonsia

https://community.freetaxusa.com/discussion/comment/394#Comment_394

Dear Kristine

When entering the form 8936 on freetaxuse.com, it pre-fills the names and ID , and for ID uses the SSN of the first name shown (this is a joint return). But the tax credit form has the SSN of another spose that is named second - will that be an issue? how can I fix that?

also - when I would want to claim this credit next year, will I need to make sure that name on this form is different?

may be its best to file separately?

atissoonsia

https://community.freetaxusa.com/discussion/comment/1163#Comment_1163

I might have figured it out - the SSN that appears in that field is the SSN of the person doing the return, not the one in the 'spouse' field. I just need to start the return from my spouse name as primary and enter myself as a spouse instead :). not 100% sure though

KristineS

Hi assosiation.

Yes, the name prefills at the top of the form, all forms in the return for that matter, with the primary tax person. This is the person first entered in our software.

I do not recommend file separately just for this credit. That is almost certainly not to your advantage.

You can enter two used, clean vehicles, one for each spouse in the software program in one year. The VIN number is very important as the identifying information, less so the name of the person. You don't need to change the order of the spouses at the beginning of the program for the credit.

As a matter of fact, I recommend not changing the order of spouses if you have continuously filed first and your spouse second, for many years. It actually makes a bit of difference at the end with the IRS and can lead to some unintended consequences that cause confusion.

atissoonsia

https://community.freetaxusa.com/discussion/comment/1172#Comment_1172

oh wow that's interesting to know (about reversing the order).. Thank you for the details!

the thing is that the second car was bought this year so i can't claim it in 2023. that's why i'm so uneasy on this whole thing as it was made unnecessarily complicated and vague by the IRS. this year's form or the car has my SSN and next year's has SNN of my spouse, this is why I'm asking this question.

KristineS

That's correct assosiation. Sounds like you'll to wait until 2024 to claim a credit for the second vehicle. The vehicle is sold to a specific person with an SSN and VIN associated with that person's vehicle. This information is matched at the IRS when the return is filed.