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Some residents qualify for a local rebate of $3,000

The state pushing the hardest to transition drivers from gasoline-powered vehicles to electric vehicles and hybrids is California. Part of the state’s push to get people to adopt electric vehicles has come by way of tax credits and rebates (which are in addition to rebates available at the federal level).
 
All of those rebates can be combined making for a significant discount off the purchase price of an electric vehicle. The state of California offers a $2,500 rebate on the purchase of an electric car. The federal tax credit for buying an electric vehicle is $7,500. However, the San Joaquin Valley Air Pollution Control District recently announced that it is offering drivers in the district another $3,000 to purchase an electric vehicle.
 
When combined the local, state, and federal tax rebates, this represents a total of $13,000 off the price of an EV. To compare, in the state a new gasoline-powered Toyota Corolla has a sticker price of just under $18,000. By comparison, the electric Mitsubishi iMiEV has a sticker price of $29,975. That is a huge difference between factory MSRPs for the vehicles, but when you knock off the $13,000 in credits, the purchase price of the Mitsubishi EV is a more palatable $16,975.
 
Despite the significant discount, most drivers still stay away from electric vehicles. The biggest reason is range anxiety and long charging times. However, electric vehicles can be cheaper to operate. An example would be to drive the gasoline-powered Corolla mentioned before with a travel distance of 40 miles a day with gasoline at $3.95 per gallon would cost the driver $150 a month. Charging the electric car to drive the same distance each day would cost about $50.
 
President Obama is also seeking to expand tax credits for EVs by bumping the federal credit from $7,500 to $10,000, making the price gap even less if approved.

Source: CBS47.tv



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Credit
By mchentz on 8/24/2012 10:06:12 AM , Rating: 4
The Federal $7500 is a tax credit! Why is this so hard to understand? You don't get a discount on the car just can write off $7,500 on your taxes at the end of the year. This is useless to a lot of people

I guess the state of California is giving a rebate of $2,500 but how long does this take to get back? Heck can the State even afford it?

If you want an electric car great! you should pay for it not my taxes!




RE: Credit
By Shadowmaster625 on 8/24/12, Rating: -1
RE: Credit
By FITCamaro on 8/24/2012 11:01:05 AM , Rating: 3
Nothing he said is incorrect.

The $7500 is a tax credit. You don't get it back until you file your taxes. I'm not sure how the California credits work, but they definitely can't afford it.


RE: Credit
By RufusM on 8/24/2012 11:33:44 AM , Rating: 2
And a text credit is deducted from the final tax amount owed, unlike a tax deduction which just reduces the rate at which your taxed.

A tax credit goes like this:
After everything is calculated, I owe $3K in taxes. Subtract the $7.5K and I get back $4.5K as a refund.

Tax credits are typically just free money from the Government delayed until tax time.


RE: Credit
By FITCamaro on 8/24/2012 12:47:33 PM , Rating: 2
And he called it a credit.


RE: Credit
By jimbojimbo on 8/24/2012 11:39:22 AM , Rating: 2
No, the initial poster has no idea what he's talking about.
quote:
just can write off $7,500 on your taxes at the end of the year

Writing it off is a tax deduction. A tax credit means that if at the end of the year you've paid $12,000 in taxes and wind up you did owe $12,000 for that year, which makes you even, then that $7500 will be credited right back so you'll get a fat $7500 refund check. A deduction means the amount you declare becomes nontaxable so a $7500 deduction will net you maybe $2000 back, assuming you are above the standard deduction already.

To those of you saying most people can't benefit from this consider the fact that you only need to make about $35,000 a year to wind up paying about $7500 in taxes, assuming you don't contribute anything to tax deductible items like IRA and charity and such. If you don't make that much you have no business trying to buy a $30,000 car.


RE: Credit
By Spuke on 8/24/2012 12:05:15 PM , Rating: 1
None of you know what you're talking about. You ONLY get the entire $7500 IF you have at least that much in tax liability. AND it only goes to reduce your liability. YOU DO NOT GET ANY CASH, REBATES OR OTHERWISE!!!! How hard is this to understand?


RE: Credit
By FITCamaro on 8/24/2012 12:45:39 PM , Rating: 2
Pretty sure you get the full amount regardless of whether or not your liability is greater than or equal to the full amount. At least other credits have worked that way.


RE: Credit
By toffty on 8/24/2012 1:23:42 PM , Rating: 2
As someone who actually bought a Leaf I can tell you it's not a refund. If your liability is less than $7500, you don't get any extra money back: If someone owed $4000 in taxes, $4000 would be covered by the credit and the government would keep rest - $3500 in this case.

This is unlike Colorado where it is a rebate after federal credits. I probably will not owe more than $12,500 after my other credits this year so Colorado will be giving me a check for the difference of its $5000 rebate.


RE: Credit
By Spuke on 8/24/2012 2:12:01 PM , Rating: 2
quote:
As someone who actually bought a Leaf I can tell you it's not a refund. If your liability is less than $7500, you don't get any extra money back: If someone owed $4000 in taxes, $4000 would be covered by the credit and the government would keep rest - $3500 in this case.
This.


RE: Credit
By Ammohunt on 8/24/2012 7:49:30 PM , Rating: 2
you bought a leaf in Colorado? i guess you don't do much driving....just in town driving around Boulder?


RE: Credit
By JPWhite on 8/25/2012 8:47:50 AM , Rating: 2
This is true if buy outright. Those who's tax liability is significantly below the full tax credit amount CAN get the full value, by leasing the vehicle instead.

I believe Obama wants the credit to go up to $10,000 and be an instant credit at point of sale rather than through tax filing. If that passes (fat chance) then EV sales will pick up nicely.


RE: Credit
By FITCamaro on 8/24/2012 12:49:30 PM , Rating: 2
His terminology may have been off but I think he mean exactly what you are saying as well.

I say its a write off too when explaining it.


RE: Credit
By DennisB on 8/25/2012 8:18:13 AM , Rating: 2
Most of these kind of scheme are not for the poor anyway. You are likely to get it yourself than a poor guy with no internet.


Heh
By Brandon Hill (blog) on 8/24/2012 9:27:47 AM , Rating: 5
quote:
The state pushing the hardest to transition drivers from gasoline-powered vehicles to electric vehicles and hybrids is California.


More like:

quote:
The state pushing the hardest to go even deeper into debt is California.




RE: Heh
By TSS on 8/24/2012 9:50:27 AM , Rating: 2
since 3 municipalities have already declared bankrupcy with analysts expecting much more, i doubt that madness will continue for much longer.

I give it a year or 2 at best.


RE: Heh
By NellyFromMA on 8/24/2012 11:27:06 AM , Rating: 2
I theorize the madness will actually increase. These motions are being passed because the constituents think its a good idea. When it turns out the ideas aren't feasible AND the likelihood of bailouts presumably decreases with more and more irresponsible decision making, that isn't going to make the consituents feel any less entitled... their just going to figure out how else to get it...

Once again, the problem boils down to the overall mentalities of the general population.


RE: Heh
By KCjoker on 8/24/2012 6:13:07 PM , Rating: 2
If Obama wins I wouldn't be surprised if we bail out some of these cities because they're "too big to fail".


RE: Heh
By Nutzo on 8/27/2012 11:25:12 AM , Rating: 2
It will get alot worse before before we see any changes.

They will just keep borrowing and stealing (like from road funds & schools) until there is nothing left. Maybe when the state defaults on it's debt, and the state workers see huge cuts in thier retirement checks, they will finally realize the damage the government unions have caused.


RE: Heh
By makken on 8/25/2012 1:28:28 AM , Rating: 2
This is at the local level, so I'm 99% sure the funding comes from a DMV surcharge the air district imposes in its jurisdiction. In that sense, they're not going deeper into debt; they've just made the determination that this program is the best use of those existing funds.

disclaimer: I've worked with another air district in CA in administrating a similar program.


More hanouts for the rich
By Nutzo on 8/24/2012 11:03:05 AM , Rating: 3
Most of the people buying these cars are upper middle class or the "rich", so these programs are really just tax breaks for the rich.

The main reason many of these people buy one of these cars, is not because they want to save the environment, but because they can get a sticker that allows them to drive in the carpool lane with just one person in the car.




RE: More hanouts for the rich
By guffwd13 on 8/24/2012 12:09:58 PM , Rating: 1
just like the original poster you have no idea what you're talking about.

1) these programs are for people that make $35k a year. If at the end of the year you've paid $10k in taxes to the federal government you get a refund check BACK. a credit is different from a deduction people. why is this so hard to understand?

2) California eliminated the sticker program years ago because they had given out too many already which made the HOV lane as crowded as any other. and the point of the carpool lane is to encourage environmentally friendly travel and to get more cars off the road. The fact that the HOV goes faster than normal lanes was the incentive to carpool in order to encourage said travel. Why do you refer to that with such disdain?


RE: More hanouts for the rich
By Spuke on 8/24/2012 2:16:08 PM , Rating: 2
quote:
1) these programs are for people that make $35k a year. If at the end of the year you've paid $10k in taxes to the federal government you get a refund check BACK. a credit is different from a deduction people. why is this so hard to understand?
Jesus people! THERE'S NO REFUND!!!!!!!!!!!!!!!!!!!!!! If you owe $4000 in taxes (someone making $35k is NOT going to owe anywhere near that much...you're still in the refund bracket), you get $4000 APPLIED to your $4000 liability. There is no check to cash, no refunds, and no rebates.


By BifurcatedBoat on 8/24/2012 8:32:42 PM , Rating: 2
You cannot come out net-positive for the year on federal taxes via this credit.

However, if you've been making estimated Federal income tax payments all year - and if you work a normal job they've automatically been deducting it - then you can get up to all of that money back in the form of a refund check.

So if your tax liability for the year is $7,500 or more, and that tax has already been given to the government in the form of estimated withholdings, then yes you would get a refund check for the full $7,500.

Only if your Federal liability is less than $7,500 would you not be able to get the full amount. Chances are though, if you're even considering buying a new car, you probably owe more than $7,500.


Credits vs. Deductions
By amanojaku on 8/24/2012 12:30:12 PM , Rating: 2
Since there's some confusion over this:

What's the difference between a deduction and a credit?

A tax deduction reduces the amount of income for which you are taxed. For example, if your taxable income were $50,000, a $2,000 deduction would reduce it to $48,000. So, you would pay taxes on an income of $48,000 instead of $50,000. This means your actual savings would be a fraction of the $2,000 deduction.

A tax credit reduces the total amount of income tax you owe. So, if you owed $10,000 in federal income tax, a $2,000 credit would reduce the amount you owed to $8,000. With a credit, your actual savings would be $2,000.

http://www.fueleconomy.gov/feg/taxfaqs.shtml

EV's are eligible for CREDITS, so you can save up to $7,500, but it depends on your car. So, if you owe less than $7,500 in taxes and own the right EV, you can actually make money from this. The current list of EV's all qualify for $7,500. There are credits for other types of vehicles, as well.

http://www.fueleconomy.gov/feg/taxcenter.shtml




RE: Credits vs. Deductions
By amanojaku on 8/24/2012 12:50:03 PM , Rating: 2
quote:
So, if you owe less than $7,500 in taxes and own the right EV, you can actually make money from this.
Sorry, that's wrong. Only certain tax credits are refundable. For alternative fuel vehicle tax credits you can break even, but you don't get an excess. Our tax laws are freaking complicated.

Four Tax Credits that Can Boost your Refund

A tax credit is a dollar-for-dollar reduction of taxes owed. Some tax credits are refundable meaning if you are eligible and claim one, you can get the rest of it in the form of a tax refund even after your tax liability has been reduced to zero.

Here are four tax credits you should consider to increase your refund on your 2011 federal income tax return:

The Earned Income Tax Credit is for people earning less than $49,078 from wages, self-employment or farming. Millions of workers who saw their earnings drop in 2011 may qualify for the first time. Income, age and the number of qualifying children determine the amount of the credit, which can be up to $5,751. Workers without children also may qualify. For more information, see IRS Publication 596, Earned Income Credit.

The Child and Dependent Care Credit is for expenses paid for the care of your qualifying children under age 13, or for a disabled spouse or dependent, while you work or look for work. For more information, see IRS Publication 503, Child and Dependent Care Expenses.

The Child Tax Credit is for people who have a qualifying child. The maximum credit is $1,000 for each qualifying child. You can claim this credit in addition to the Child and Dependent Care Credit. For more information on the Child Tax Credit, see IRS Publication 972, Child Tax Credit.

The Retirement Savings Contributions Credit, also known as the Saver’s Credit, is designed to help low-to-moderate income workers save for retirement. You may qualify if your income is below a certain limit and you contribute to an IRA or workplace retirement plan, such as a 401(k) plan. The Saver’s Credit is available in addition to any other tax savings that apply. For more information, see IRS Publication 590, Individual Retirement Arrangements (IRAs).

http://www.irs.gov/newsroom/article/0,,id=255095,0...


RE: Credits vs. Deductions
By Spuke on 8/24/2012 2:17:07 PM , Rating: 2
THIS.


RE: Credits vs. Deductions
By guffwd13 on 8/24/2012 2:18:06 PM , Rating: 2
Yes but on how he worded that response I think people are still confused. I'm guessing (but I could be wrong) people are getting mixed up with what tax liability is.

Your federal tax liability is the amount you pay to the federal government you in a given year and NOT just what you owe at the end of the year (he used owe which to me implies still owes at the time the credit would be processed).

Eg, you could have already paid $7k in taxes for the year but come tax time have an outstanding tax liability of $1k. Thus for the entire year, you've now paid $7k in taxes, but instead of paying that $1k you still owe, because you bought this EV, you get $6500 back instead (7k+1k-7500=liability of $500. 7k-500=refund check).

Some people - especially based on their misunderstanding of how this works above - may think that means you are making money when you get money back.

But thanks for that post hopefully that clears some of this up to people.


Article is inaccurate...
By Philippine Mango on 8/24/2012 3:20:10 PM , Rating: 2
quote:
Despite the significant discount, most drivers still stay away from electric vehicles. The biggest reason is range anxiety and long charging times. However, electric vehicles can be cheaper to operate. An example would be to drive the gasoline-powered Corolla mentioned before with a travel distance of 40 miles a day with gasoline at $3.95 per gallon would cost the driver $150 a month. Charging the electric car to drive the same distance each day would cost about $50.
It would NOT cost $50 a month to drive the Mitsubishi Miev because PGE and various other utilities in California offer a special electric rate for Electric cars if you charge off peak which is around $0.04 per KWH. In that case, it would cost $13.44 a month in electrical costs to drive the Mitsubishi Miev assuming you're driving 40 miles a day, every day of the week.

At $0.04 per kwh, that's the equivalent of paying a $1.38 per gallon of gasoline, being paired with a 112MPG car. If you were paying $.12 per kwh, then that would be like paying $4.11 per gallon but with a 112mpg car...

California has worked quite hard to make electric vehicles as attractive as possible.




RE: Article is inaccurate...
By Nutzo on 8/27/2012 11:45:31 AM , Rating: 2
I see people talking about these "low" rates all the time to show how cheap an electric car is, but in Orange County, SCE's BEST rate is not even close to that cheap. Infact the cheapest rate is $.10 for the Super Off-Peak rate from 12:00pm to 6:00 am. This is no even enough time to fully charge a Leaf from a 240v plug (needs 7 hours).

The standard rate is $.13/kWh, .16/kWh, .24/kWh, .28/kWh, and .31/kWh
With my current usage, additional power to charge a car would fall into the 24-31 cent/kWh

I could switch to the Electric Vehicle Plan, but the cost of a dedicated 2nd meter would wipe out any savings.

The 3rd choice is the Home & Electric Vehicle Plan

This has a on-peak rate of $.13/kWh and rate of $.56/kWh
Off-peak rates are $.13/kWh $.25/kWh
and Super Off-Peak rates are $.10/kWh $.16/kWh

The $.56/kWh rate during the summer (when the wife & kids would be running the Air), would actually INCREASE my bill significantly, not including any power charge the car.


RE: Article is inaccurate...
By Nutzo on 8/27/2012 11:53:06 AM , Rating: 2
So, using your numbers $0.04 per KWH = $1.38 per gallon

At my best rate of $.10 per KWH off peak I get $3.45 per gallon, but then I'm hosed during the summer because the rate is double during the day when I run the Air.

Using the standard plan, at $.28 per KWH I get $9.66 per gallon.

Don't see any saving with an electic car due to the high cost of electricity, which is only going up.
Both of SCE's Electric Vehicle plans would actually increase my costs for non-car related electricity.


In other news
By bug77 on 8/24/2012 10:13:54 AM , Rating: 2
Many drivers can buy a car for $13,000.




By BifurcatedBoat on 8/24/2012 8:22:58 PM , Rating: 2
You pretty much need a garage both for charging and storing your other gasoline-powered car, which you keep for those times when you need to go out of range.

Still, I think EVs can do pretty well if the purchase price can come down enough. There are a decent number people who do live in houses and have several vehicles.




IRS
By btc909 on 8/26/2012 1:13:10 AM , Rating: 2
I have to laugh at peoples understanding of what the $7500 tax credit actually is. Dam I wish I was an IRS agent & paying very close attention as to how people are claiming this "tax credit". I'd be promoted to "Senior IRS Douche Bag" in no time!




Facts and Math are Wrong
By wuli on 8/27/2012 6:31:16 PM , Rating: 2
The writer ignores that no tax credits or rebates avoid having to get a loan, and in the case the author presented, for a more expensive car.

I took an average of the best auto loan rates for California I could find - my average was 3.53%. If financed for 48 months, the true total cost for the EV Mitsubishi will be $32,185, and $19,327 for the "gas guzzling" Corolla. Those numbers mean monthly payments of $670 vs $402. For 48 months, thats $12,480 (260 * 48).

Ah, but "energy costs" are supposed to (supposed to) save the buyer $100 a month. So, if we consider that, then the higher monthly cost will be $160 for the EV car ($260 - $100). Over the 48 month life of the loan, that leaves $7,680 in extra costs that the "energy savings" won't pay for.

And the rebates? They are not taken until the car is owned for 36 months. And the rebates? The Mitsubishi does not qualify for the maximum either for the California rebate or the Jaoquin Valley rebate. It only gets $2,000 for either, instead of $2,500 for the former and $3,000 for the later. So after making $7,680 more in monthly payments for three years, the buyer will get just $4,000 back in rebates. That's $3,380 they won't get back in rebates by the end of the 48 month loan.

Ah, but if they get 100% of the $7,500 tax credit in their pocket as a income tax refund (not likely for every case) they can "save it" (also not likely) to pay last 12 months extra loan costs amd finally realize a $4,120 "savings" (on paper), it will take 48 months to realize. And then what? Will they keep car? No likely.

So for 48 months they have $160 a month extra costs, for the privelege of owning an EV vehicle; a typical Liberal action; doing it because it makes one "feel good", about themselves, not that it is really rational and not that it realistically solves any problem.




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