US Tax Form 8936 - Question on how to apply the $7500 tax credit

stlgrym3

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#1
I took delivery of my Model 3 last week, so I’m eligible for the $7500 tax credit. Have a few questions before I go ask my accountant:

1. I will file my 2018 income tax early 2019, this tax credit is for FY 2018 correct?

2. Do I need to fill out any forms or just show accountant my MVPA and they will handle the rest?

3. I’ve read the $7500 tax credit can only go toward your tax liability. I don’t owe IRS any money, in fact every year I’m pretty much break even, in my case do I still get the $7500 credit?
 

judomc

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#2
As I understand it:

1. Yes this would be for your FY2018 Taxes reported next year.
2. I'm not sure as I will be doing this next year as well! ^5
3. Yes it goes towards your tax liability. As I understand it, the credit is applied to your actual taxes due for the year and then you account for the taxes actually paid. If the tax tables say you would owe more than 7500 for the year then the full credit should apply for you. If that is the case and you typically come out even at tax time, you will likely get all/most of that 7500 as a refund because you would have basically overpaid by that amount. (again provided you actually had a tax liability of >7500)

I'm not an accountant so this is just my understanding of how it should go.
 

Lovesword

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#3
I took delivery of my Model 3 last week, so I’m eligible for the $7500 tax credit. Have a few questions before I go ask my accountant:

1. I will file my 2018 income tax early 2019, this tax credit is for FY 2018 correct?

2. Do I need to fill out any forms or just show accountant my MVPA and they will handle the rest?

3. I’ve read the $7500 tax credit can only go toward your tax liability. I don’t owe IRS any money, in fact every year I’m pretty much break even, in my case do I still get the $7500 credit?
1. Correct
2. My wife's car arrived in September 2017 and our accountant new which form to fill out (in 2018) and...
3. My wife got a check for the $7500 (minus some small amount we owed as we do our best to break even as well).

Looking forward to my check this upcoming tax season! :)
 

MSM3

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#4
1. The credit will apply towards 2018 tax year.
2. Provide your tax professional a copy of your MVPA and they should handle the rest.
3. The $7500 tax credit reduces your tax liability, it doesn't depend on whether you get a refund or not. Talk to your tax professional and he/she can advise you on how to better take advantage of the tax credit.
 

stlgrym3

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#5
so I don’t have to go to the link provided by Tesla to download the form and fill it out? Just give my MVPA to my accountant will do? That’s awesome. I’m looking forward to that $7500 check as well as I can almost guarantee I will break even again for FY income tax.
 

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#6
I took delivery of my Model 3 last week, so I’m eligible for the $7500 tax credit. Have a few questions before I go ask my accountant:

1. I will file my 2018 income tax early 2019, this tax credit is for FY 2018 correct?

2. Do I need to fill out any forms or just show accountant my MVPA and they will handle the rest?

3. I’ve read the $7500 tax credit can only go toward your tax liability. I don’t owe IRS any money, in fact every year I’m pretty much break even, in my case do I still get the $7500 credit?
1. Yes

2. Your accountant needs to know year, make, model, VIN and date the vehicle was placed in service (delivery date). So MVPA is probably sufficient, though I haven't looked at it in some time.

3. Tax liability is not your refund, nor is it the amount of the check you write at tax time. It's your total tax liability after considering income and deductions. On the 2017 Form 1040, this would be line 47.

Note: Tax rates and deductions/exemptions have changed for 2018, so your tax situation is likely to be somewhat different than in previous years. If you have any credits after line 47, the EV credit could affect your ability to fully take those credits. This is not tax advice; consult a tax professional.
 
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Dr. J

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#7
so I don’t have to go to the link provided by Tesla to download the form and fill it out? Just give my MVPA to my accountant will do? That’s awesome. I’m looking forward to that $7500 check as well as I can almost guarantee I will break even again for FY income tax.
Form 8936 will be automatically produced in any tax software package. You just need to supply the amounts, dates, and other data to fill it in. I don't think the manufacturer's certification will be needed, at least not in 2018.
 

Ed Woodrick

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#8
so I don’t have to go to the link provided by Tesla to download the form and fill it out? Just give my MVPA to my accountant will do? That’s awesome. I’m looking forward to that $7500 check as well as I can almost guarantee I will break even again for FY income tax.
You really don't need anything, unless you get called to an audit. Most everyone files electronic these days
 

Dr. J

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#9
You really don't need anything, unless you get called to an audit. Most everyone files electronic these days
Not supplying the information needed for Form 8936, and then claiming the credit, would be the quick way to get an audit by mail.
 

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#10
As a CPA, let me say 1) See post 4 above, it's spot-on 2) If there is any possibility that your total tax liability(before subtracting any pre-payments or credits) will be less than $7,500(either you can't afford the model3 you're driving or you're doing some extremely creative tax accounting) consult a CPA before 12/31. There may be ways to increase this year's total tax, and decrease next year's, so that you can utilize the entire credit. Never let the Feds keep money that could be yours. Tax avoidance is 100% legal. Tax evasion?? Not so much!!
 

stlgrym3

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#11
just saw Autoblog article on Tesla and GM are joint force in fight to lift the EV tax credit cap. it says Tesla had already reached the 200,000 vehicle sold cap. i took delivery beginning of November, will i still get that $7500?
 

MelindaV

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#12
just saw Autoblog article on Tesla and GM are joint force in fight to lift the EV tax credit cap. it says Tesla had already reached the 200,000 vehicle sold cap. i took delivery beginning of November, will i still get that $7500?
the full credit is available for those (with the needed tax liability) who have cars delivered thru December 2018. Then for 6 months is is $3750. Then the following 6 months $1875
 

stlgrym3

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#13
the full credit is available for those (with the needed tax liability) who have cars delivered thru December 2018. Then for 6 months is is $3750. Then the following 6 months $1875
so that holds true even after Tesla had passed the 200,000 threshold?
 

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#16
Going to start a thread about the US Federal Tax Form 8936. I think we'll have just a little interest in this form this year. I'll go on record that I am no tax or accounting professional and you should take any and all advice here as friendly conversation from fellow forum members. If you have doubt or questions please make sure you've consulted a tax professional. Personally I use TurboTax for my taxes, so I'll be working through their procedures and waiting for their updated and final form for filing.

Please post only factual information and try to keep the conversation on topic, provide links when appropriate. I don't think this is complicated, but there are literally hundreds of conversations and much confusion over how the form and tax credit works.

I'll keep this first post updated with links to the IRS web site for the form, but as of this time, their current link takes you to the 2017 form. This is a draft form for 2018.

2018 form 8936 - DRAFT only at this point - https://www.irs.gov/pub/irs-dft/i8936--dft.pdf
 

FF35

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#17
Last year Turbo tax was really late with 8936. I went to H&R Block on-line and they only had a draft version. I used that and didn’t have a problem. The tax credit is what it is so even if I was to get audited, nothing would change and will be doing the same thing this year if needed.
 

Dr. J

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#18
Going to start a thread about the US Federal Tax Form 8936. I think we'll have just a little interest in this form this year. I'll go on record that I am no tax or accounting professional and you should take any and all advice here as friendly conversation from fellow forum members. If you have doubt or questions please make sure you've consulted a tax professional. Personally I use TurboTax for my taxes, so I'll be working through their procedures and waiting for their updated and final form for filing.

Please post only factual information and try to keep the conversation on topic, provide links when appropriate. I don't think this is complicated, but there are literally hundreds of conversations and much confusion over how the form and tax credit works.

I'll keep this first post updated with links to the IRS web site for the form, but as of this time, their current link takes you to the 2017 form. This is a draft form for 2018.

2018 form 8936 - DRAFT only at this point - https://www.irs.gov/pub/irs-dft/i8936--dft.pdf
Very informative: Instructions, Line 4b (page 3 of 4).
 

Bigriver

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#19
Last year Turbo tax was really late with 8936. I went to H&R Block on-line and they only had a draft version. I used that and didn’t have a problem. The tax credit is what it is so even if I was to get audited, nothing would change and will be doing the same thing this year if needed.
It wasn't just Turbo Tax who was late with the form last year. The IRS dragged their feet in getting it finalized. I presumed that was because of the turmoil surrounding all the last minute tax law changes last year that actually extended into early 2018. IRS didn't finalize it (for 2017) until late February 2018, and it took awhile for it to get implemented into any electronic versions. I see no reason for a repeat of last year's hangup, at least I'm certainly hoping not.
 

SoFlaModel3

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#20
I Tweeted this...


The estimated date of 1/25/19 for form availability came from TurboTax. Apparently the form has been late the last few years though.