Quote:
Originally Posted by PorscheGAL
For the most part, if you are buying, the $7500 comes off the purchase price at the time of purchase.
For instance: A new Tesla Model 3 base model is $41,000-$7500 tax credit= 33,500 loan amount.
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I know the rules have changed a lot recently, but I don't think this is the case now (it never was before). It's a
tax credit- it's applied against your tax liability whether you've already paid against it with withholdings or estimated tax or not. For example, your tax liability is $10,000 and you've had $12,000 withheld, you get a refund of $2,000 + $7,500 = $9,500. If you owe $5,000 and you've had $2,000 withheld, you get a $2,000 refund. It is not a
refundable tax credit, where you get the full amount regardless of what you owe.
Quote:
Originally Posted by PorscheGAL
If you live in a state with rebates, most of those will come off the purchase price also, so the loan amount goes down.
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Some states will pay a rebate directly to a dealer at the time of sale, and the dealer gives you a credit/rebate at the time of purchase. Sometimes you have to apply for the rebate from the state after the sale, like when you get a $70 rebate for a set of tires from the manufacturer directly after you've paid the tire dealer in full.
On Tesla's website, there's a good guide:
https://www.tesla.com/support/incentives
When you lease a car, it's a different story. It's up to the manufacturer, but you typically get a rebate or discount for whatever amount they want to pass through to you in lieu of the Federal tax credit you'd get on a purchase. Some manufacturers pass it all through, some only part of it, some none of it. That's because the leasing entity (usually if not always a captive of the manufacturer) gets the tax credit because technically they are the buyer, not the lessee. In fact, some leasing entities get the Federal tax credit where an individual buyer would not. So, sometimes you'll see an (up to) $7,500 rebate on a leased car, which is applied at the time of the lease. Sometimes you'll see this rebate on a car that does not qualify for it if purchased instead.
The state credits/rebates are another story.