Originally Posted by
PickleRick
This is incorrect.
non-refundable credits reduce your tax liability still. Just because the big number on TurboTax is a green $1 refund before the EV credit, doesn’t mean you won’t get $7500.
The credit reduces your liability by $7500 until your liability would be $0.
In your example, if someone is earning something like $100k+ per year, they’re probably paying more than $7.5k in taxes that year (because their marginal tax rate is higher than 7.5%). You don’t have to try to owe $7.5k at the end of the year to get the credit.
Most low mid to high earners will get the full $7.5k back if they don’t exceed the credit income threshold.
source: I’m not a tax professional but I bought an EV
unless this is what you meant…. Tax discussions can get very confusing because it requires very precise language.
I did read that wrong. Thanks for clarification. I was reading "how much you owe" as how much you pay at the end of the year, not how much you owe based on liability regardless of how much you witheld.
You are right, precise language is critical. I interpreted that word "owe" wrong so many different sources trying to learn things.
So it does seem like 0 is the best way.
Sorry about that. I would edit it out if I could. You just saved me a bunch of unnecessary hoops to jump through that I have been doing, thanks.
Clearly I could benefit from tax pro.
So basically if I understand the refundable tax credit are good for those who make no income and have 0 tax liability. They still wouls get a refundable rebate, but would not get the EV non-refundable rebate correct?
Those with no or low liability have nothing owed. And those with high liability owe a percent based off of bracket, and if you make 66k (after deductions) that will owe about 7500 (7479 if i calculate 2023 bracket correctly) in which if you had nothing witheld and used an EV credit, you would be at 0 when you file. Or if you had 7500 witheld from 'proper w4' you would get back about 7.5k from IRS after filing due to the EV credit, making your still at 0, but the IRS received an interest free loan for 7500 all year long and longer if you wait to file in April.
I guess thats how we learn. Take a hit to the pride and keep on learning.