January 24, 2019

More End Of The Year 2018 Tax Planning

More End Of The Year 2018 Tax Planning:

The IRS announced today that Tesla, Inc. has sold more than 200,000 vehicles eligible for the plug-in electric drive motor vehicle credit during the third quarter of 2018.

This triggers a phase out of the tax credit available for purchasers of new Tesla plug-in electric vehicles beginning Jan.1, 2019.

Qualifying vehicles by the manufacturer are eligible for a $7,500 credit if acquired before Jan. 1, 2019.

Beginning Jan. 1, 2019, the credit will be $3,750 for Tesla’s eligible vehicles.

On July 1, 2019, the credit will be reduced to $1,875 for the remainder of the year.

After Dec. 31, 2019, no credit will be available.

The plug-in electric drive motor vehicle credit was enacted in the Energy Improvement and Extension Act of 2008 and subsequently modified in later law. It provides a credit for eligible passenger vehicles and light trucks. By law, five quarters after reaching the sales threshold, the credit ends for the manufacturer. Tesla Inc.’s vehicles are eligible for some portion of a credit until Jan. 1, 2020.

Don’t forget that there is also potential StateTax Credit, for example California offers $2,500 tax credit and PG&E also offers tax credits for their charging stations put into your home.

Michael B. Nelson, Lawyer