a tax credit is not a rebate

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MelindaV

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#1
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MelindaV

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#5
I get that, just saying that it doesn't matter to the consumer as all that matters is the money going to their pocket.
Unless they do not qualify for the credit. that is the difference between a credit and rebate. a rebate is the tax authority refunding you what they have held that you do not own (IE a refund). A credit is only good against what your tax liability is and is not guaranteed as available to everyone.
 

NR4P

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#6
I get that, just saying that it doesn't matter to the consumer as all that matters is the money going to their pocket.
A rebate goes into your pocket.
A tax credit may save money leaving your pocket. In some cases, you may have earned the credit with the purchase of the vehicle, but you may not qualify to use it based upon income and tax considerations on your tax filing situation.

So it matters to some consumers.
 

shareef777

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#7
Unless they do not qualify for the credit. that is the difference between a credit and rebate. a rebate is the tax authority refunding you what they have held that you do not own (IE a refund). A credit is only good against what your tax liability is and is not guaranteed as available to everyone.
A rebate goes into your pocket.
A tax credit may save money leaving your pocket. In some cases, you may have earned the credit with the purchase of the vehicle, but you may not qualify to use it based upon income and tax considerations on your tax filing situation.

So it matters to some consumers.

Yes, the presumption is that the OP qualifies.
 

shareef777

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#9
As long as his tax preparer hasn't calculate no taxes due like some.
Like all things, it depends. If his tax liability is over $7500 after all deductions than he should still qualify (ie, his federal taxes owed is over $7500, and he deducts enough taxes each pay check to ensure a zero balance when filing next year, he'd just get a refund of $7500). Otherwise, it'd be akin to penalizing tax payers for paying their taxes ahead of time.
 
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iPlug

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#10
It can cut both ways. Here in CA, if you earn too much, you still get the federal tax credit as you have the tax liability, but don't get the CA "rebate".
 

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#11
As long as his tax preparer hasn't calculate no taxes due like some.
What you have paid in the form of withholding or quarterly estimates has absolutely no bearing on a tax credit. As others have mentioned, what does matter is your TOTAL TAX before you apply any credits or prepayments. If you bought during the $7500 credit period(now $1875), you can realize the entire benefit if your TOTAL TAX is $7500 or more, even if your TAX DUE has been reduced to less than $7500 by withholdings and estimated payments. If your TOTAL TAX is less than $7500 then you'll only get the benefit of your TOTAL TAX. BTW...CPA here. And there are other more arcane situations that can affect your credit. Bottom line...those who aren't well-versed in the ins and out of the tax law have no business giving tax advice(nor do I...for free):):)
 
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#12
If you’re proactive/smart about adjusting your federal tax withholdings, you can get “paid” for the federal tax credit right away. I’m paying no federal income tax out of my paycheck right now and I’m still waiting on the Oregon REBATE. :)