More information on the future of EV Tax Credits in the US…

Aptera Community Aptera Discussions More information on the future of EV Tax Credits in the US…

Aptera Community Aptera Discussions More information on the future of EV Tax Credits in the US…

  • More information on the future of EV Tax Credits in the US…

  • kerbe2705

    Member
    August 11, 2021 at 8:52 pm
  • Raj Giandeep

    Member
    August 11, 2021 at 9:11 pm

    In regards to the Aptera, I wonder if only applies to the base price. The 600 range Aptera could go over $40K with add-ons just barely.

    • John Malcom

      Member
      August 11, 2021 at 10:38 pm

      It is based on the sales price (MSRP) of the base vehicle plus the price of accessories and options. The whole price of the vehicle. But since the Aptera is not a car (Auto cycle or motorcycle depending on the state) it is not applicable to us anyway, at least at present

  • BRUCE MENGLER

    Member
    August 12, 2021 at 6:30 pm

    It not law yet but below is what I just found & may not apply to Aptera.

    As investors had expected, the budget reconciliation bill removed the 200,000-vehicle cap in what looked like a win for the industry. But it was too soon to celebrate. On Wednesday, the Senate passed an amendment that grants the $7,500 credit only for EVs that cost less than $40,000, and only if the buyer earns less than $100,000 a year.

    • Fanfare 100

      Member
      August 12, 2021 at 7:02 pm

      Thanks. So, if the earner earns 100,001 they won’t be eligible for the $7,500?

    • Oz (It’s Oz, just Oz)

      Member
      August 12, 2021 at 8:29 pm

      Went and found the text of the amendment. Need a good lawyer to get the true meaning, but several things in the wording. “The Chairman of the Committee on the Budget of the Senate may revise the allocations” (Key word “May”) and “which may include limiting eligibility of individuals with an adjusted gross income of greater than $100,000 or setting maximum car values allowed for eligible purchases at $40,000″(Key words “May and Or”) So not fully set in stone. Additionally the AGI is named for individuals, so I would assume that likely married/joint filers would get a $200,000 limit.

  • Pistonboy Delux

    Member
    August 12, 2021 at 9:33 pm

    Some are purchasing Apteras over the $40,000 limit. It would be nice if they can purchase a more stripped down version keeping the cost below $40,000 , then extra batteries and features are added later. But I don’t think any of this is relevant. The Aptera is a motorcycle, and I strongly suspect this only applies to automobiles, not motorcycles.

  • Steven G. Bueche

    Member
    August 13, 2021 at 2:46 pm

    Just like the last rounds of ‘Credit’ will they be Liability Credits or Point of Sale? What good is it if you don’t owe money to the government when you file your taxes? If you’re due a refund or break even it’s almost as if you’re being punished for being a good planner.

    Point Of Sale is the only way they should give these credits.

    • Oz (It’s Oz, just Oz)

      Member
      August 13, 2021 at 5:13 pm

      I think you may misunderstand, This type of credit is against your total tax bill for the year, not for what you owe or get at filing time, so it would increase your refund to offset for taxes paid. This type is classified as “Non-refundable” as opposed to “Refundable” the difference being that with a “Non-refundable” the credit cannot exceed your taxes owed for the year. (IE a $7500 credit can reduce your $10,000 tax liability for the year down to $2500, but if your total Fed Tax liability was only $7000 the excess $500 goes away and ceases to exist, if it were a “Refundable” credit you would get back the $7000 you paid in taxes plus $500 bonus dollars at filing time.

      • Patrick Liebknecht

        Member
        December 23, 2021 at 4:17 pm

        No he doesn’t misunderstand tax credits

        Refundable tax credits are different than non refundable tax credits and rebates are a completely different animal

        This is from smart assets website

        With a non-refundable tax credit, on the other hand, you won’t end up with a refund if your tax liability falls below zero. So if you have a $2,500 non-refundable credit, you only owe $1,000, the extra $1,500 won’t be accessible to you

        Maybe Oz you are confusing refundable and non refundable tax credits.

        The last round of EV tax credits were non refundable

        • Oz (It’s Oz, just Oz)

          Member
          December 23, 2021 at 7:41 pm

          Patrick, nope, my explanation is spot on and in agreement with what you just posted. However, it looks like a lot of people are mistaking what they owe when filing, with their total yearly tax obligation, which is the amount you need to use when determining the amounts. You’ve normally had taxes withheld out of each paycheck, (Or paid quarterly if self employed.) You file your taxes in April and you find you owe $1,000 because you’ve underpaid in the course of a year. That’s not the amount you use before the credit though, you take the years total tax amount (If at tax time you still owe $1,000 you likely paid quite a few thousand already.), and subtract the credit from that. I ran the numbers somewhere else but if you had adjusted taxable income for the year of, I think it was about $55,000, you would get the full $7,500 dollar credit.

  • Eric Rucker

    Member
    August 13, 2021 at 7:41 pm

    There’s a key here:

    Thankfully, Sen. Fischer’s amendment is non-binding and is unlikely to be greeted warmly by the House of Representatives.

    So, I’m not too worried about that.

    Besides, being a 3-wheel vehicle, Aptera would be under a proposed renewal of the 2 and 3 wheel EV tax credits instead, which is 10% of the purchase price, up to a maximum credit of $2500. As all models of Aptera are advertised over $25,000, they’d get the maximum $2500 credit.

  • Richard Tidd

    Member
    October 28, 2021 at 12:06 pm

    As if today, here is a general idea as to where the 1.75 Trillion Infrastructure bill may include for EV tax credits. If passed we will need more info as to details:

    The Biden administration aims to secure $555 billion in spending to address climate change, an amount the White House says makes the bill the biggest clean energy investment in the nation’s history.
• The bulk of the clean energy measures come in the form of tax breaks for companies and consumers that install solar panels, improve the energy efficiency of buildings, and purchase electric vehicles. The EV tax credit in particular could lower the cost of such a vehicle by $12,500 for a middle-class family, according to the administration.

  • Ray Rivera

    Member
    November 7, 2021 at 12:22 am

    Easy fix : 1, buy a lower model Aptera and get the maximum tax credit ; 2, add rear motor for AWD; 3, add leather seats; 4, add all other gadgets aftermarket, etc.

    Ask CEO of Aptera to set up an aftermarket shop for buyers who want to maximize their tax credit for the purchases of Aptera EVs.

    • Lou Verner

      Member
      November 7, 2021 at 6:45 am

      Regardless of where Aptera ends up with regard to tax credits, definitely think setting up aftermarket shop would be wise move for management. Lots of great custom ideas already explored on various forum discussions and my guess is these would provide considerable net profit to Aptera coffers.

  • Patrick Liebknecht

    Member
    November 25, 2021 at 8:59 pm

    If I understand the tax credits correctly and I’m sure someone will correct me, they only apply to people who owe taxes. So if you get a refund , you’re basically screwed

    This is how they are defined

    The credits earned depend on a variety of factors and are used to decrease taxes you owed in a given year. For instance, if you bought an EV eligible for a $7500 tax credit and your total federal taxes for the year came to $8500, you would owe only $1000 to the government

    What if I don’t owe taxes and get a refund each year ????

    • Joel Smith

      Member
      November 25, 2021 at 9:39 pm

      Getting a refund and not owing taxes are completely different things. You get a refund when you have had more in income tax deducted from your paychecks over the year than you wind up owing at tax time. Interest free loans to Uncle Sam, thank you very much.

      So if at tax time, you find that you owed up to $7,500 (or whatever value it ends up being) you will get all of that plus whatever you would have already got refunded back.

      Yes that does mean that you may get nothing from the tax credit if you make little enough to end up owing zero dollars in taxes. Perhaps someone will lease the vehicle to you, get the tax break themselves and pass at least some of that on as a discount to you. That’s what regular dealers do with other EVs.

    • kerbe2705

      Member
      November 25, 2021 at 9:56 pm

      Tax credits are applied against your tax liability. In simplistic terms, if your adjusted annual income is $54K you’ll have a tax liability of $7500. If you buy an eligible EV a $7500 tax credit will be applied against that liability and you will owe no taxes.

      The year I purchased a PHEV that was eligible for the full $7500 tax credit I also had ACA insurance – which works via tax credit. As a result, my tax liability was only $710 – so that’s the amount of EV tax credit I received.

      The only way you’d get a refund would be if you paid more in quarterly estimated taxes or had more withheld from your salary than the amount of your tax liability. So, if you owed $7500 and received a credit of $7500 but you’d paid the IRS $8500, you would get a $1K refund.

      • Oz (It’s Oz, just Oz)

        Member
        November 26, 2021 at 5:48 am

        Kerbe, Unless I’m reading it wrong, it looks like your third paragraph lost its way.

        If you actual tax liability (Pre EV credit) for the year is $7500. You receive a $7500 EV credit . Your actual Tax liability is now $0 Your withholding/payments to the IRS for the year is $8500

        Prior to the EV credit you would have received a $1K refund.

        After the credit you would receive an $8500 refund.

        (As you now would have had no tax liability for the year and all tax payments would be returned to you.)

  • Patrick Liebknecht

    Member
    November 26, 2021 at 6:50 am

    This is whey my they call them “non refundable “ tax credits.

    If you don’t owe taxes at the end of the year , that tax credit for buying an EV will not end in a refund, because they are “non refundable”

    So basically , Joe public who wants to save the planet ( like myself ) won’t owe taxes at the end of the year and only the filthy rich who can afford to pay what they owe at end of the year anyway will get the tax break, that sound about right ?

    Now you could play games with your exemptions and make it so you do owe and get more back through the year ( but that’s a dangerous game in the sense if you do the math wrong ) you could end up paying uncle same back with interest for the next 48 months.

    I did see in the new so called “infrastructure bill” they are trying to decide to make them “refundable” tax credits. But like everything else the government passes. They have to pass it before we get to really see what’s in it 🙂

    • Oz (It’s Oz, just Oz)

      Member
      November 26, 2021 at 9:15 am

      Patrick, just to clarify, (And a whole lot of people don’t get this straight.) a non-refundable tax credit (For fed tax purposes.) will reduce your total federal tax liability for the year up to the full amount. It doesn’t matter if you’ve had taxes deducted/withheld, it’s the final figure. Example, you had taxable income of $50K during the year and at years end your adjusted fed tax was $8000, during the year you paid/withheld $8500. You are at this point due a $500 refund.

      But you bought an EV that gave you a non-refundable EV credit of $7500, when you complete your taxes you now get that first $500 plus you get $7500 more for an $8000 refund.

      Where the non-refundable part would apply is if say your adjusted tax liability had been $6000, and you had withheld say $6000 dollars, when you file you would only get a $6000 refund for the same EV credit and the other $1500 goes away and nobody gets it. There a few nuances if you withheld more or less than your adjusted taxes, but they don’t affect the basic math on it. Basically you get whatever the non-refundable credit is subtracted from your adjusted tax liability as long as the credit isn’t larger than what you you owed.

      Now a refundable tax credit would mean that you get the money even if you didn’t pay/owe any taxes, that would be a nice thing to see, but I doubt that will happen.

      • Patrick Liebknecht

        Member
        November 26, 2021 at 11:05 am

        That’s not how the article I read on car and driver explained the “tax credits”. But okay, if you’re correct my standard $1500 refund each year would be around $9000. But again. The article I read doesn’t explain it that way. They said. If you don’t owe taxes at the end of the year , you don’t get the credit

        Now from JDpowers. This is what they say

        Claiming the Federal Tax Credit

        A tax credit means an EV buyer will receive up to a $7,500 reduction in their tax liability for the year. But this is a flat credit, which means it is only worth the full $7,500 if the individual’s tax bill is at least $7,500. If an EV buyer has a tax bill of, say, $3,000 at the end of the year, the EV tax credit can only be a maximum of $3,000. The IRS will not go over and above this total tax liability figure, and in this example, the remaining $4,500 of the EV’s total tax credit will not be useable. Furthermore, that unused portion will not apply to future years’ taxes

        • Oz (It’s Oz, just Oz)

          Member
          November 26, 2021 at 1:04 pm

          Patrick, yes it’s all dependent on your adjusted taxable income and actual overall taxes owed. On the 2020 IRS form 1040 line 24 was your federal total tax for that year, if the EV credit had been $7500 and you had used it then, as long as your total tax was $7500 or greater you would receive the full credit, otherwise as a non-refundable credit you would only receive credit for up to whatever your total tax was. (Let’s say, per your example, you normally get a $1500 refund, meaning your total payments were $1500 more than your total tax, if your total tax had been $5000 and you paid in $6500 in that case you would get a total refund of the $6500, if your total tax had been $9500 and you paid in $11000 which would still normally get you the $1500 refund, you would then get a refund of $9000. (I’ve done tax aide work for AARP)

          • Paul Schultz

            Member
            November 26, 2021 at 3:35 pm

            I was under the impression that the credit covers any outstanding tax owed at the time you use the credit (ie, on your tax return). If so, and you had payroll withholding during the year that led to an amount owed at the time of your tax return (and time of using the tax credit) less than the $7500 you would only receive a credit for the amount owed. In essence to zero out your tax return. I’d like some clarification on this as it would necessitate some planning and adjustment of payroll withholding to make sure the maximum credit is covered by the amount owed at the time of using the credit (on your tax return). I hope I am wrong because the above scenario seems simpler.

            • Oz (It’s Oz, just Oz)

              Member
              November 26, 2021 at 4:07 pm

              When you apply the credit, at tax time, it is a credit as part of your entire tax year, not for just the outstanding portion owed at that time. If some article refers to the situation as you describe, they just don’t understand how the tax system works. If you really have any doubts and have access to an accountant, you might give them a call for reassurance. The feds would likely frown upon you trying to adjust your withholding or prepayments down to zero or near it anyway, they do love their money. (I’m not an accountant but have been trained as a tax aide for AARP, explaining how tax credits work was part of that.) The really bad thing was someone originally using the terms non-refundable and refundable as descriptions of tax credits in the first place, it is truly confusing and makes it unclear as to what it means.

              Non-refundable: credit value up to your total tax for the year.

              Refundable: total credit value regardless of your total tax.

            • Paul Schultz

              Member
              November 26, 2021 at 4:17 pm

              Thanks. That does make more sense and was what I had been thinking. It just goes to show to be careful with what we read on the internet.

  • Patrick Liebknecht

    Member
    November 30, 2021 at 11:13 am

    Transportation secretary Pete says American should go buy electric cars so they don’t have to worry about rising gas prices anymore……

    Then he touted the new tax credit for EVs as a discount on the price which is simply a flat out lie aptera , Tesla , Lucid are not dropping the price of the car by $7500 and you’re not getting $7500 back off the price of the car unless you owe more than $7500 to the federal government at the end of the year just like the song says “ you ain’t getting nothing for Christmas“

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