2014 Tax Breaks for EVs

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Kocho
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2014 Tax Breaks for EVs

I wonder, for those of us in the US who bought "new" bikes off the Vectrix liquidation auction, if we can claim the tax credit(s)?

See discussion here: http://electricmotorcycleforum.com/boards/index.php?topic=4348.0

I haven't yet had a chance to research this myself, but I'm doing my taxes these days so would be good to know.

Thoughts?

Kocho
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Re: 2014 Tax Breaks for EVs

No one? A potential issue is that the bike is new, but an '09 model, plus there obviously aren't any dealers or a manufacturer to fill-up the necessary forms (for the excise tax credit for the state of Maryland)...

PJD
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Re: 2014 Tax Breaks for EVs

The US federal tax credit that once was available for 2-wheel EV's is no more. 2013 was the last year. With the new congress, the tax credit for electric cars will probably go too.

Kocho
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Re: 2014 Tax Breaks for EVs

Unfortunately, I think you are right. The folks on the Electricmotorcycleforum who had their taxes done by "professionals" might get into some trouble with the IRS if audited. I'd be happy to be proven wrong though.

PJD
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Re: 2014 Tax Breaks for EVs

Are some claiming the credit in their 2014 returns? One way to do it would be to simply get the seller to back-date the bill of sale and title transfer to 2013 or earlier and then file an amended return. There would be no way for the IRS to prove this went on. Yes, it is cheating, and I'm not fan of tax cheats, but this is cheating for a good cause.

Kocho
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Re: 2014 Tax Breaks for EVs

Looks like some have received the claimed federal credit in CA. Not a small amount on their near $20K bikes. For me, it would have only been $90 (since I paid $900) at the auction and since my tax software would not let me do it (due to the bike being an '09 model, despite being bought new in '14), I gave-up as it seems the credit shouldn't be available anyway...

PJD
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Re: 2014 Tax Breaks for EVs

I'm a turbo-tax-luddite, becasue I don't trust software to judge the tax deductability of something. It's like replacing judges in courts with computers. I still do my federal tax returns on paper forms because I prefer to rely on myself to read and interpret tax rules, not "turbotax".

It is not the model year that matters, it is the date you acquired the vehicle. If it was on or before December 31, 2013, you can claim the 10% or up to $2500 credit. Download IRS form 8936, read the instructions and fill it out.

Kocho
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Re: 2014 Tax Breaks for EVs

Exactly - mine was acquired after that date. So it fails the rules for that form.

Kocho
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Re: 2014 Tax Breaks for EVs

Exactly - mine was acquired after that date. So it fails the rules for that form.

And, here is the long answer:

There are two credits available relating to eligible vehicle purchases. These are available to individuals and businesses.

The credit applied for on Federal Form 8834 Qualified Electric and Plug-in Electric Vehicle Credit applies to the following:

Two types of plug-in vehicles — certain low-speed electric vehicles and two- or three-wheeled vehicles. The amount of the credit is 10 percent of the cost of the vehicle, up to a maximum credit of $2,500 for purchases made after Feb. 17, 2009, and before Jan. 1, 2014 (Note: prior to the signing of the Taxpayer Relief Act of 2012, the cutoff date was Jan. 1, 2012).

To qualify, a vehicle must be either a low speed vehicle propelled by an electric motor that draws electricity from a battery with a capacity of 4 kilowatt hours or more or be a two- or three-wheeled vehicle propelled by an electric motor that draws electricity from a battery with the capacity of 2.5 kilowatt hours. A taxpayer may not claim this credit if the plug-in electric drive vehicle credit is allowable.

Some examples of vehicles that meet this criteria per the IRS website Qualified Plug-In Electric Vehicles - IRC 30, include qualified golf carts, buggies, scooters, 2- and 3- wheel electric vehicles and electric motorcycles.

======

The credit applied for on Federal Form 8936 Qualified Plug-in Electric Drive Motor Vehicle Credit applies to the following:

Vehicles must be newly purchased, have four or more wheels, have a gross vehicle weight rating of less than 14,000 pounds, and draw propulsion using a battery with at least four kilowatt hours that can be recharged from an external source of electricity. The minimum amount of the credit for qualified plug-in electric drive vehicles is $2,500 and the credit tops out at $7,500, depending on the battery capacity. The full amount of the credit will be reduced with respect to a manufacturer's vehicles after the manufacturer has sold at least 200,000 vehicles.

Some examples of vehicles that meet this criteria per the IRS website Qualified Vehicles Acquired after 12-31-2009 - Qualified Plug-In Electric Drive Motor Vehicles (IRC 30D), include the Fisker Karma Sedan, Ford Focus, Chevy Volt, Mitsubishi i-MiEV, Nissan Leaf, smart fortwo, Tesla, Think City EV, Toyota Prius and RAV4 EV, and Wheego LiFe.

Note: The credit claimed on Form 8936 tends to be more common since it applies to vehicles, and not golf carts, motorcycles, etc.

Both the Qualified Electric and Plug-in Electric Vehicle Credit and the Qualified Plug-in Electric Drive Motor Vehicle Credit are non refundable credits. A non refundable credit can reduce your tax liability to 0 (zero), however it cannot result in a refund. What this means is if you qualify for a $350 credit and your tax liability is $200, you will only receive a $200 credit on your return. If your tax liability is zero you would not receive the credit at all, even though you are otherwise eligible for it.

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