TRANSFER OF EV CREDIT TO DEALER for 2024
Hi to all. Hope you guys had a time to read about transfer credit.
I found this example regarding EV transfer credit to dealer. Susan wishes to purchase a new electric car that qualifies for a nonrefundable
$7,500 tax credit. Her total tax liability without the credit equals $3,000.
Rather than lose $4,500 worth of tax credits, she elects to transfer the $7,500
tax credit to the dealership selling her the car. The dealership then reduces
the sale price of the car by $7,500 and claims the $7,500 tax credit on its
tax return. The election thus allows Susan to receive the full benefit of the
$7,500 tax credit and the dealership is reimbursed by the government for
selling the car at a reduced price.
And I found this one on FAQ of the IRS:
What if a buyer has insufficient tax liability to fully use a transferred credit? (added October 6, 2023)
The amount of the credit that the electing taxpayer elects to transfer to the eligible entity may exceed the electing taxpayer’s regular tax liability for the taxable year in which the sale occurs, and the excess, if any, is not subject to recapture from the dealer or the buyer.
It means as of 2024 if you have not any tax liability you can take $7500 credit. ( in dealership) Am I right?
Do we need to file 8936 even if the credit already has been taken in dealership just to check AGI's limit?
I would greatly appreciated it!
