Electric cars and a big tax break

Finance

ROCHESTER, N.Y. (WROC) — New Yorkers who purchase certain electric cars could take advantage of a tax credit and rebate totaling $9,500 in savings.

CPA Michelle Staebell of the New York State Society of CPAs discussed what you need to know about the tax credit and rebate Thursday during News 8 at Sunrise.

“There’s up to a $7,500 federal tax credit on eligible plug-in hybrids and electric vehicles right now,” explained Staebell. “It’s only for eligible vehicles. Before you complete your search make sure you hop out to the fueleconomy.gov website to find out what the credit is for the vehicle you’re looking at and then if you are the original purchaser of that vehicle then when you file your tax return next year you might be eligible for a credit up to $7,500.”

The tax credit is only for purchases, not leases. Staebell noted the benefit is dependent upon your tax liability. “If a taxpayer’s tax liability is only $5,000 – which is the case for many taxpayers – or at least their tax liability is less than the full $7,500 potential credit they would not take advantage of the full credit. Whatever credit is not used is not refundable. It does not carry forward. It does not transfer to a future buyer of the vehicle so keep that in mind. Taxpayers might not get the full $7,500 benefit and that might weigh into the decision of purchasing the vehicle.”

Staebell said it’s important to note some makes and models of electric cars are not eligible for this tax credit. “It depends upon the size of the battery pack, so hop up to that website and make sure the manufacturer and model qualify. And then also manufacturers can only sell 200,000 vehicles to be eligible for this credit. So, for example, Tesla and General Motors have already reached that threshold so any future vehicles that Tesla and General Motors sell would not qualify for this credit.”

There is also a New York rebate of up to $2,000. “I believe it happens right at the dealer level,” said Staebell. “It’s not a tax credit. It doesn’t go on the New York tax return but make sure you talk to the dealer if you are interested and find out how much a potential New York rebate would be for the car you are purchasing as well.”

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