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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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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.


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