My Total Rebate pile (California Purchase)

[mburtsvt]

Its $4500 for lower income folks.

$17075 is a good chunk of change, I never knew you got that $7500 back from the IRS. Good Stuff.

The $7500 is a tax credit towards your income tax. Look at it as if you owed $17500 in tax - you would only have to pay $10,000 in tax next year.

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[RickMachE]

Tax credits aren't rebates. Discounts aren't rebates.

People think they will get $7,500 from the IRS, plus 30% of the charger and install. They won't. Lots of people don't have tax liability of ~$8,000 once they take their deductions.

Retirees are a great example. Many have no tax liability.

Given people come to a forum to learn things, using the wrong term simply confuses them.

 

[RickMachE]

The $7500 is a tax credit towards your income tax. Look at it as if you owed $17500 in tax - you would only have to pay $10,000 in tax next year.

And if you owe $4,000 in tax, you won't get a dime and you will lose $3,500 in tax credit.

 

[timbop]

But it's not $7500....correct? Ive had this argument with Tesla Folks for years.

Tesla lost the tax credit long ago - there is a cap of 200,000 cars being sold and then the credit decreased in increments every 2 quarters for roughly 6 quarters until it was zero. For those that feel compelled to explain it, the full $7500 applies until the END of the calendar quarter AFTER the quarter in which the 200,000th BEV was sold by the manufacturer in the USA. The credit would then be $3750 for 2 more quarters, and $1875 for the next two. After that it would be 0. So if Ford hits 200,000 BEVs sold in the USA on May 19th 2022 (Q2 2022) the $7500 is available for all Ford BEV purchases until Sept 30 2022 (end of Q3 2022). From Oct 1 2022 (beg of Q4 2022) to March 31 2023 (end of Q1 2023) it would be $3750, and from April 1 2023 (beg of Q2 2023) to Sept 30 2023 (end of Q3 2023) it would b $1875

Why not? If you have at least $7500 of tax liability, it’s $7500. What is there to argue about?

Teslarati do not argue for a reason, they argue for the sake of argument*

You know Tesla does not qualify for the tax credit - right? I have no idea what they have to debate about. It IS $7500 off of the amount I have to pay in taxes.

Correct.

 

[mburtsvt]

Tax credits aren't rebates. Discounts aren't rebates.

People think they will get $7,500 from the IRS, plus 30% of the charger and install. They won't. Lots of people don't have tax liability of ~$8,000 once they take their deductions.

Retirees are a great example. Many have no tax liability.

Given people come to a forum to learn things, using the wrong term simply confuses them.

You get that this is California - everyone has a larger tax liability. In addition - in my case I sold stock and CREATED a tax liability to make sure I get ALL OF THE CREDIT. It's the American way. Oh and by the way - I am a retiree - with a very good finance guy.

 

[ARK]

I think someone answered this...I'm income qualified. It's $4500.00

Very nice, I misunderstood the program, I thought the income qualification was $2,500 total, but it appears it is on top of the $2,000 base amount. Congratulations on the savings!

 

[Mirak]

So the last check came in, (finally) for my rebates on my FE ....... Drum roll please..... (and , yes I did get my car at MSRP).

“Ford Options” rebate - $2500
X-Plan - $675
California Point of sale rebate - $1500
Fed Tax credit - $7500
California Clean Vehicle Rebate Project - $4500
Fed Tax Credit for home charger - $400

Total - $17,075

I felt a brief stab of jealousy…. and then I reminded myself that you’re paying 2-3x more for housing and state/local taxes. But congrats on your “savings” on the Mach E. It’s cool that Cali gave you back some of your money!!!

 

[Sam2084]

Tax credits aren't rebates. Discounts aren't rebates.

People think they will get $7,500 from the IRS, plus 30% of the charger and install. They won't. Lots of people don't have tax liability of ~$8,000 once they take their deductions.

Retirees are a great example. Many have no tax liability.

Given people come to a forum to learn things, using the wrong term simply confuses them.

I have a hard time imagining someone able to afford a Mach E that doesn’t have 8k liability. Retirees is seemingly the only case and they would still have their cost of living to offset and would likely get some rebate.

 

[DevSecOps]

Its $4500 for lower income folks.

$17075 is a good chunk of change, I never knew you got that $7500 back from the IRS. Good Stuff.

I'm not in finance soooo maybe there's a magical way to make money, without making money that I'm unaware of. But I do know with 100% certainty that a lot of people who thought that they would get the fed credit never got all or even part of it because they had no liability. It's a common misconception.

Additionally, the CA rebate can only be claimed once in your life and can't be claimed for purchases made out of state, even if you live in state.

 

[ARK]

I'm not sure how someone who qualifies for the extra 2500 which per CA is "Applicants with household incomes less than or equal to 400 percent of the federal poverty level. " would still be able to claim the 7500 fed. How in the world would your tax liability be anything above 0 at that point. Something doesn't seem right. If the OP is trying to game the system, it wouldn't be a smart move coming online and posting about it. It could also be because he's retired that he's not aware that the 7500 won't apply if he has no liability.

I'm not in finance soooo maybe there's a magical way to make money, without making money that I'm unaware of. But I do know with 100% certainty that a lot of people who thought that they would get the fed credit never got all or even part of it because they had no liability. It's a common misconception.

The income eligibility is based on your most recent federal tax return. Ordinarily, it would show no or little income for someone retired. So a retiree can qualify for the enhanced CVRP in that way.

Then, after getting the car, you take out a lot from your IRA, much more than usual in order to generate at least $7,500 in federal tax liability.

Finally, if you still want to keep the money invested, you move it into a Roth IRA so that one day you can pull out any appreciation tax free because the Roth IRA uses post-tax money, you don’t get a deduction for any money you put in, and instead pay no tax on any appreciation.

 

[dimes4slim]

So the last check came in, (finally) for my rebates on my FE ....... Drum roll please..... (and , yes I did get my car at MSRP).

“Ford Options” rebate - $2500
X-Plan - $675
California Point of sale rebate - $1500
Fed Tax credit - $7500
California Clean Vehicle Rebate Project - $4500
Fed Tax Credit for home charger - $400

Total - $17,075

Since the California clean vehicle rebate is now listed as $2,000 I am guessing you applied some time ago. I also was not aware of the federal rebate for the home Charger.

 

[DevSecOps]

The income eligibility is based on your most recent federal tax return. Ordinarily, it would show no or little income for someone retired. So a retiree can qualify for the enhanced CVRP in that way.

Then, after getting the car, you take out a lot from your IRA, much more than usual in order to generate at least $7,500 in federal tax liability.

Finally, if you still want to keep the money invested, you move it into a Roth IRA so that one day you can pull out any appreciation tax free because the Roth IRA uses post-tax money, you don’t get a deduction for any money you put in, and instead pay no tax on any appreciation.

Very interesting thanks for pointing that out. I revised my post before I read this because after thinking about it 22% of 50k is 11 so there would be at least the minimum liability if someone just squeezed under the 400% anyway.

Thanks again... Today I learned!

 

[ARK]

I felt a brief stab of jealousy…. and then I reminded myself that you’re paying 2-3x more for housing and state/local taxes. But congrats on your “savings” on the Mach E. It’s cool that Cali gave you back some of your money!!!

California is a great state for long term homeowners to retire in.

Our property tax starts out at only 1% of value, but then can only increase at a maximum of 2% per year on that 1%. It’s cumulative, but that means the second year tax is 1.02% of assessed value. After some time, the property tax rate a long term owner pays (and it’s portable for seniors) is waaay behind home values, so you get homes today worth over $1,000,000, the homeowner paying less tax than someone buying a house for $400,000.

Our sales tax is unexceptional, it’s with income tax that we get hosed.

 

[RedStallion]

You get that this is California - everyone has a larger tax liability. In addition - in my case I sold stock and CREATED a tax liability to make sure I get ALL OF THE CREDIT. It's the American way. Oh and by the way - I am a retiree - with a very good finance guy.

I'm not sure the math works. Check with your CPA. To get CA increased rebate the income is limited to 4 times of the federal poverty level. For example, for an individual, it's about $51,000. But the federal tax liability with such income is anywhere from zero to $4000 depending on deductions and adjustments.

 

[RickMachE]

Capital gains tax is the same

I have a hard time imagining someone able to afford a Mach E that doesn’t have 8k liability. Retirees is seemingly the only case and they would still have their cost of living to offset and would likely get some rebate.

A retiree couple can earn just over $100k, with a lot of cap gains, and have zero tax liability with standard deduction. We are doing Roth conversions to generate enough tax liability.

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