Frequently Asked Questions

A W2 is provided to you by the employer that shows your accumulated salaries and tax withholding held for you during the year. The W2 should be delivered to you by January 31 of the following year from the year worked.

1099 must be filed and delivered to you by your contractor/employer by February. 1099 does not usually have any taxes withheld and can be filed via a Schedule C for contractors. If you worked in the capacity of an employee you will be required to pay the calculated tax from the gross receipts on 1099. 

You can claim head of household if you are unmarried (or considered unmarried) on the last day of the year Dec. 31. Also, you must have paid more than ½ the cost of keeping up your home and have a qualifying person who lives with you for half of the year.

Are you considering buying an electric vehicle (EV) this year? If so, it’s important to know that there is a federal tax credit of up to $7,500 available to reduce the cost of your purchase. However, this tax credit is scheduled to expire at the end of the year. In this blog post, we’ll explain how you can claim the $7,500 EV tax credit and make the most of it before it expires.

What is the EV Tax Credit?

The EV (electric vehicle) Tax Credit is a federal incentive program that provides drivers with a tax credit of up to $7,500 for purchasing or leasing a new electric vehicle. This credit was established in 2008 under the Energy Improvement and Extension Act and was designed to encourage drivers to switch to more environmentally friendly electric vehicles. This incentive is only available for certain qualifying new electric vehicles and is applied when you file your taxes. The amount of the credit varies by manufacturer, with some eligible vehicles receiving the full $7,500 while others may receive less. To be eligible, the vehicle must be a plug-in electric drive motor vehicle with four or more wheels that has a gross vehicle weight rating of 10,000 pounds or less.

Who is Eligible for the Credit?

The $7,500 EV tax credit is available to taxpayers who purchase a qualifying electric vehicle in the United States. In order to qualify for the tax credit, the vehicle must have a gross vehicle weight rating (GVWR) of up to 14,000 pounds. The credit is applied on a per-vehicle basis, so if you purchase multiple eligible vehicles, you may be able to claim the credit for each one.

In addition, you must be the original owner of the vehicle and have purchased it for use in your own personal transportation in order to be eligible for the credit. Businesses, government entities, and other organizations are not eligible for the credit.

The vehicle must be purchased or leased after December 31, 2009, and the original use of the vehicle must begin with the taxpayer claiming the credit. Vehicles that have been used previously do not qualify for the credit.

Finally, the credit is only available to taxpayers who have a taxable income. You must also ensure that you do not exceed the maximum amount of allowable credits in any given tax year.

If you think you may be eligible for the credit, make sure to double check with a qualified tax professional to ensure that all eligibility requirements are met before submitting your return.

How Do I Claim the Credit?

Claiming the EV tax credit is relatively straightforward. The first step is to determine if you are eligible for the credit. You must have bought an eligible electric vehicle in 2020 and the vehicle must be used primarily for personal use. Once you’ve determined that you’re eligible, the next step is to fill out IRS Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit.

The form requires that you provide basic information about yourself, such as your name, address, Social Security Number, and date of birth. You will also need to provide information about the vehicle, such as the make, model, year, and Vehicle Identification Number. Finally, you will need to include the amount of your total allowable credit based on your specific circumstances.

When filling out the form, it’s important to keep in mind that the credit is only available for the original purchase of an eligible vehicle. If you lease or finance the purchase of an electric vehicle, you won’t be able to take advantage of this tax credit.

Once you’ve filled out the form, you’ll need to submit it along with your tax return for the year in which you purchased the vehicle. Your total allowable credit will then be applied against any taxes due. It’s important to note that you can’t receive a refund for any unused portion of the credit, so make sure to apply it in the year you purchase the car in order to take full advantage of it.

When Does the Credit Expire?

The $7,500 electric vehicle (EV) tax credit is set to expire at the end of 2020. The current phase-out program means that each manufacturer is limited to a total of 200,000 EVs sold before the credit begins to phase out for them. If a manufacturer surpasses the limit, then the credit begins to phase out for that manufacturer.

Tesla and General Motors have already surpassed their 200,000-unit limits, so the credit has already begun to phase out for those manufacturers. For Tesla vehicles delivered on or after January 1st, 2020, the full amount of the credit will not be available. For GM vehicles delivered on or after April 1st, 2020, the full amount of the credit will not be available either.

If you are considering purchasing an EV, it’s important to understand when the credit expires and what that means for you. It’s likely that other manufacturers will hit the 200,000-unit threshold in the coming months, so it is important to take advantage of the full credit while it is still available.

You can check with your local dealership or the manufacturer to determine if your EV model qualifies for the full tax credit amount and when it will expire. Taking advantage of the full credit could save you hundreds or even thousands of dollars on your purchase.

It’s also important to note that Congress could potentially extend the credit beyond 2020. There has been legislation proposed in both the House and Senate which would extend the credit until 2025, but it has yet to be approved.

Time is running out to claim the full amount of the EV tax credit, so make sure to act soon if you are interested in taking advantage of it. Make sure to speak with your local dealership or the manufacturer to determine if you are eligible for the full amount of the credit and when it will expire.

Other Things to Know About the Credit

The EV tax credit is a great incentive to help make electric vehicles more affordable, but there are some important details to know before you claim it.

First, the EV tax credit is only available for the original purchaser of a new qualifying vehicle. If you lease an EV, the credit goes to the leasing company and not to you.

Second, you must use the tax credit in the year you purchased or leased the qualifying vehicle. You cannot carry over the unused credit from one year to the next.

Third, the EV tax credit is a non-refundable credit, meaning that it can only be applied to your federal income taxes owed and will not result in a refund. However, if the full amount of the credit exceeds your taxes owed for that year, the remaining amount can be carried forward for up to five years.

Finally, it’s important to note that the EV tax credit will eventually phase out when a certain number of electric vehicles have been sold by the manufacturer. This means that you should take advantage of this incentive while it’s still available!

Conclusion

The $7,500 EV tax credit is a valuable benefit for those who want to purchase an electric vehicle. It can help offset the cost of the vehicle and make it more affordable. Before the credit expires at the end of 2020, it’s important to be aware of who is eligible for the credit and how to claim it. It’s also important to know other details about the credit, such as how it is applied and any limitations on use. With the right information and a bit of effort, it’s possible to take advantage of this great opportunity to save on the cost of an electric vehicle.