Updated 2024 EV Tax Credit Guidelines - Should you wait?

Model 3 RWD & LR no longer will qualify for any tax credit come Jan 1 2024. This video covers how it might impact you.
Take delivery before Dec 31 to still get the tax credit for Model 3 RWD/LR -
You can get a Model Y right now with existing inventory discounts for 32k RWD or 37500 for LR AWD: www.tesla.com/...
Pros of the updates:
Point of sale credit
Those with lower tax liability get full credit
Cons:
model 3 rwd/lr no longer qualify
Also tax credit can transfer to the dealer (tesla in this case) to get the full tax credit at the point of sale (income still qualifies).

[@RobertSchmitt]

Since making this video, tesla has massively discounted existing inventory. You'll have to decide what makes sense but here's the deals (links are examples from AZ): 1. Model 3's as low as 27500 RWD, 34000 for LR AWD, 38390 for Performance 3 www.tesla.com/inventory/new/m3?arrangeby=plh&zip=85253&range=200&referral=robert3199 2. Model Y's as low as 32000 RWD, 37500 for LR AWD, 39740 for Performance Y www.tesla.com/inventory/new/my?arrangeby=plh&zip=85253&range=200&referral=robert3199

[@ThatBingo]

Thanks Robert! You helped me a lot when buying my Model 3 RWD back in June and now you’re helping me again as I’m looking at the possibility of selling my model 3 and buying a Y to take advantage of this situation as you are stating. Thank you as always!

[@RobertSchmitt]

Glad it's helpful! I would wait until tax credit goes away for the 3 so you may get more $ when selling used since new buyers will be paying a lot more. Good luck! Still some great deals out there (look how cheap the 3 is right now, 35k discounted - 7500, is 27500!!!) www.tesla.com/inventory/new/m3?arrangeby=plh&zip=85253&range=200&referral=robert3199 Look at the Y's - www.tesla.com/inventory/new/my?arrangeby=plh&zip=85253&range=200&referral=robert3199 32500 after credit! its wild

[@erfgthygreas1709]

​@RobertSchmitt Can $7500 tax credit be used as down payment

[@kenyattaclay7666]

Just to let you know, the IRS has said that the POS credit is transferable so even if you don’t have $7,500 (or whatever the amount of the credit is) in tax liability you will not have to pay it back.

[@RobertSchmitt]

Yeah exactly. I do mention that later as a benefit for those who have less liability. Great benefit for those making less than 68k or so (assumptions built into that)

[@erichchan3]

But you still need to meet the income limits at the end of the year though or else you will have to pay it back.

[@kenyattaclay7666]

@@erichchan3 Yes that's true but I was just talking about if you don't have the liability.

[@teslamr7333]

So if I understand this correctly, if you end up not owing any taxes for 2025 then you wouldn’t have to pay back the $7500 tax credit to the IRS?

[@erichchan3]

@@teslamr7333 not exaclty how it works. You can owe back zero taxes because you calculated your federal withholding correctly but if your AGI is over 150K single or 300K married you will have to pay back the $7500 since didn't qualify on the income requirement. The only difference between 2023 and 2024 is that in 2024 you can get the $7500 credit at POS but you still need to follow the rules about meeting the income requirements. This only becomes a problem if you are in a situation where your income is near the limits and have to tip toe around it. If you are clearly under or clearly over the income limit it would make the decision much easier. If you are no doubt going to be above the income limits in 2024 and want to buy a Tesla, I wouldn't even bother taking the $7500 credit at POS since you will have to owe that back anyways because when you take the credit at POS, Tesla is going to send a tax form to the IRS directly which has you on record that you took the $7500 credit.

[@JaredRamirezTech]

So is the Model Y going to be half of the $7500 starting in 2024? Or will it be the same $7500 once purchased?

[@RobertSchmitt]

I believe the RWD Y but the LR should retain full 7500. Tesla details doesn't say yet

[@johnathoncastro]

Wouldnt this just allow the dealers to just charge $7500 higher? Or come January the exhisting price will be $7500 lower than current prices?

[@RobertSchmitt]

Other deals I believe Yes. Tesla possibly though I doubt it. Tesla raised prices when there was no tax credit for example and when the tax credit was introduced, you might think the same thing... instead, Tesla's are the lowest price they have ever been despite the tax credit. pulling that forward enables them to stay competitive.... now if demand significantly increases beyond what they can produce, then they should raise prices anyway regardless of the tax credit changes. so economics are still at play and some dealers may take advantage (like some ford dealers charging $20,000 demand charges for the lightning)

[@Spawn223311]

It will most probably happen, don't believe otherwise. If you really want to know, the best way would be to see prices after like 1 year of no incentives at all

[@NO_OPEC_NO_PROBLEM]

So let’s say in 2024 my AGI is $149,999. I claim 0, I usually get a refund, let’s say $1500. In tax year 2024 would I still get that $1500 refund? This act more like a sales credit than a tax credit if I understand this correctly.

[@RobertSchmitt]

You would . You'd get 7500 plus the 1500 since that income typically pays about $26700. In your example if you're getting a refund of 1500 you had over 28k withheld hence the refund. Since you have more tax liability you'd still get the credit. In you get the point of sale credit in 2024 (Tesla has not updated their systems for this yet) you'd get the full 7500 even if you didn't owe 7500 in taxes on sub 150k income since you're transferring it to the dealer.

[@IroonieLA]

If I lease the Model Y, when should I expect the tax refund of $7500? The lease price shown on their website is not factoring in the $7500 Ev discount correct? Thanks!

[@RobertSchmitt]

It is. Leasing has the 7500 built into the price. For example if model Y shows 399 per mo. Prior to the 7500 this would have been closer to 500 per mo

[@dallelo2849]

Thanks for this helpful content. I buy a model Y now (2023) but the delivery happens in 2024 how does that work?

[@RobertSchmitt]

What should happen is when your car is close to being delivered your order agreement will be updated to reflect a point of sale price (I anticipate Tesla offering an option to select if you want to transfer the tax credit to them)

[@LifeLongLearner-om8jx]

Just to clarify, U.S. federal taxes don’t fund or subsidize any of these credits from the government. It’s a long discussion but the best simple primer on this subject is “The Deficit Myth” by Stephanie Kelton. The federal government doesn't need revenue. Taxes serve as a gas pedal or brake for an economy. They drive the need aka demand for U.S. currency. The government creates money by spending and destroys it by taxation, and it does both without worrying about the supply of coins and bills. I mention this because it’s such a point of contention for those that claim that “government subsidies” for renewable energy and electric vehicles is a waste of taxpayers money. But those same people don’t blink an eye at the hundreds of trillions of dollars that have given as subsidies to fossil fuel companies and automotive manufacturers to make polluting vehicles.

[@flolou8496]

What about the sales tax on the car, that can often push the total price of say a used Chevy Bolt or used Nissan Leaf by another 750.00 to 1500.00 in sales tax ? Does the 4,000 or 30% of ''sales price'' allow for the sales tax of the car itself ? This is a important point because believe it or not even 2017 Chevy Bolts now are going to be priced at the 10,000 price before sales tax in 2024, and there are plenty of 2013 to 2017 Nissan Leaf's selling between 7,000 and 10,000 as well now,

[@RobertSchmitt]

Does not apply to the sales tax. From the IRS website "Have a sale price of $25,000 or less. Sale price includes all dealer-imposed costs or fees not required by law. It doesn't include costs or fees required by law, such as taxes or title and registration fees. Have a model year at least 2 years earlier than the calendar year when you buy it. For example, a vehicle purchased in 2023 would need a model year of 2021 or older. Not have already been transferred after August 16, 2022, to a qualified buyer. Have a gross vehicle weight rating of less than 14,000 pounds Be an eligible FCV or plug-in EV with a battery capacity of least 7 kilowatt hours Be for use primarily in the United States"

[@homung04]

As I understand from your video, starting from 2024 January, only performance model on 3&Y will get full 7500 tax credit? Currently I am looking to buy model Y performance, but there is clear answers regarding which model will get full 7500 TC starting from 2024 Jan. Please help. Thank you for your response in advance

[@RobertSchmitt]

All model Y quality for tax credit and performance 3. model x base also qualifies. Cybertruck will also if it keeps its pricepoint. So if you buy a model Y you're good to go.

[@shahvatsal2391986]

@@RobertSchmitt Do you mean All model Y in 2024 qualify for FULL Tax credit 7500 ?

[@Joe44944]

Hey Robert, I gotta a question if you can answer I'd much appreciate. I've got a model Y RWD on order to be delivered before the end of this year. I am an employee w/ W2 my employer has witheld more than $7.500 and in previous years my fed. tax bill was around that amount so l got a small refund. My question is; since I don't actually owe any more $ in taxes but rather it's already withheld would l then get a $7.500 refund check from the IRS or won't l get anything? Thanks in advance!

[@RobertSchmitt]

you'd get a refund when you file!

[@jonferraez]

I would wait to buy it in 2024. If you don't owe any on your taxes on that purchase at the end of 2023 then you won't benefit from the $7500 tax credit.

[@shahvatsal2391986]

There is NO official announcement from IRS or from Tesla yet, that Model Y will get Full 7500 or partial or No tax credit.

[@RobertSchmitt]

Y battery from US. There isn't any reason to believe it would get disqualified somehow

[@shahvatsal2391986]

@@RobertSchmitt you were correct.. Its now official at fueleconomy.gov and Tesla’s website.

[@brianoreilly80]

If I purchase a left over, brand new 2023 Bolt EV or EUV in 2024, (One that is not previously owned) will I receive the full $7500.00 tax credit? In other words, will it still be considered a new vehicle purchase in 2024?

[@RobertSchmitt]

Assuming that model qualifies, and you income qualify yes.

[@LosPane]

I wanna buy a used Model 3. Would you recommend waiting for the Highland to be released or buying it now? Do you know whats gonna happen with the $4000 used EV credit? Im in California

[@RobertSchmitt]

Used credit still applies but only for 25k and under. You'll save a lot of $ buying used over highland. Used EV tax credit also only applies to income up to 75k for single. 115k head of household and 150k for joint fillers.

[@forgotmypassword2804]

did IRS say there is no re-capture on tax credit issued at point of sales for 2024? Thanks.

[@RobertSchmitt]

Assuming you income qualify yes

[@calvincheng]

It’s ridiculous that $80k Cybertruck qualifies for $7500 tax credit. Why are we subsidizing rich ppl buying 2nd cars? What tax credits are available for low income ppl who wants to buy new cars?

[@RobertSchmitt]

If you're lower income and don't owe 7500 in tax liability you still get it anyway . Also there are income caps to get the 7500 so rich people won't get it if they make over 150k

[@tonyn3227]

Why does performance get tax credit others don, doesn't performance have same battery as the long range. Same car, just software different

[@RobertSchmitt]

The performance battery is from the US and other 2 are made in china

[@tonyn3227]

@@RobertSchmitt yeah. Let's get them to buy more expensive cars.thats the goal

[@andrpw9600]

will a used model 3 long range not be available for pos tax credit? or is that only new vehicles?

[@RobertSchmitt]

Neither will be in 2024 as of now as long range battery is from China. If you want tax credit for new long range have to deliver by Sunday. Used should be fine in 2024 but it's a different credit of max 4000 and lower income requirement

[@andrpw9600]

@@RobertSchmitt sweet, i’m hoping to buy a used one january 2nd

[@andrpw9600]

@@RobertSchmittone more question, you might not know, but do you know if it’s possible to combine federal and state incentive tax credits? for example for the used federal rebate it’s 4000, and maryland offers a 3000 rebate. would i be able to potentially get 7000 off? vehicle would be just under 25k so it wouldn’t be 30% of the value

[@SadSynth]

Do you know if the CA state incentives will also apply at point of sale?

[@SadSynth]

Or I should say county. California state rebate stopped but there’s one for San Joaquin valley. Curious if I’ll still have to wait for the end of the year for that.

[@RobertSchmitt]

This is unrelated to California. You'd have to check the specifics from ca government site. Initial search looks like California has incentives but not at the point of sale for 2024

[@kingdomcomemusic7927]

Does this tax credit apply if you’re buying a used model 3? Or is it only for new EV’s?

[@RobertSchmitt]

There is a separate tax credit for used and requirements. Car must cost 25k or less. Income single is max 75k. 115k head of household and 150k joint Used EV credit is 4k

[@scotttucker2557]

Used ev also fall under the same guidelines too so let's not forget that so and batteries built outside of usa won't qualify eather

[@TheTekSone]

Ready to get a Tesla. Wonder how the batteries fair in such hot places like Arizona and Nevada? Do they degrade faster because of the heat? People keep warning me about that and some people say not to worry...just open the door of the garage so it does not hold so much heat. Do you have anything to advise on that?

[@LifeLongLearner-om8jx]

If you buy an LFP Tesla (Model 3 RWD) then charge to 100% daily. If you buy any other model charge to 80% for daily use. Hot or cold weather is NOT as big a factor with teslas because of their advanced thermal battery management systems. Also, level 2 home charging is the best option unless you need a quick charge on a long trip.

[@TheTekSone]

@@LifeLongLearner-om8jx thanks, I ended up getting a model three standard range on December 22

[@LifeLongLearner-om8jx]

@@TheTekSone congrats!

[@TheTekSone]

@@LifeLongLearner-om8jx thanks, I luv it. I chose the Deep Blue Metallic on White Interior with 18” Aero Wheels.

[@xemtra]

and DONT FORGET, count your dependents. this will lower that number as well, some people are missing this. I have 3 kids so even making 130k+ im barely getting the full tax credit

[@RobertSchmitt]

The benefit of the point of sale credit is that you'll get it no matter what even if you don't owe 7500 in taxes.

[@Ryan-Chicago]

Ignore this comment

[@forgotmypassword2804]

I thought there is tax recapture

[@angusp5515]

haha The used market will not go up. more likely go down. Tesla will discount the Model 3 even more

[@RobertSchmitt]

def not by 7500, that cuts into the margins and they won't sell at a loss. i think they may lower prices tho. i could see base 35k rwd

[@Unknown-sh8kw]

Tesla car owners have lost a lot by depreciating their cars😂😂😂

[@RobertSchmitt]

Overall though great for their mission and future buyers. Model 3 should go up in price for a bit next year tho

[@Shakenbakesandgirls]

Are you suggesting the price for the MYLR will be about 42k next year with them taking $7500 off at point of sale?

[@RobertSchmitt]

Yes correct if they don't change prices. RWD Y will be about $36500 Both less than the current 3 without credit

[@markc7274]

Knowing Tesla they will definitely change prices upward. The Tesla fanboys will always buy it regardless

[@Joe44944]

​@@markc7274not really true what you've just said. I'm a Tesla investor and I'm also on the market for a new Tesla car. If you read his comments above, Tesla has kept prices competitive to encourage demand and increased prices when demand outstripped supply. P.s. l read a certain bias in your comment towards ppl who like or admire Teslas's singlehandedly innovative and superior technology. I for one am not a fan of Elon's antics on X or on interviews. But hey if this isn't your cup of tea, feel free to bail out.

[@jml9550]

IMO price will not go up next year. Interest rate is still high and many don’t have the cash to buy it outright. Tesla will continue to build and supply the market with inventory.

[@SYNTHBREAK]

@@markc7274guess what price didn’t go up :)) idiot

[@peebe2475]

If anyone can help me out, if I’m interested in a model Y does it make more sense to wait till Jan 1st. I’m in California so I also heard the state may give out some incentives as well. I’m thinking of either leasing or buying. Thank you dor your responses

[@RobertSchmitt]

It makes sense to wait if you qualify for the tax credit and want the tax credit applied upfront. That being said there are existing inventory model y's that are discounted now that might now be in Jan. Have you driven one yet? if not i would click the link in my description and scroll down to book a demo drive. you might even get incentives in person but at least can try it out first. if you also owe less than 7500 in taxes and want to buy, better to wait until jan. if you lease you need to put 7500 upfront

[@peebe2475]

I drove the model 3 and I really enjoyed it. That being said I was planning on leasing but now it feels like a waste of money to lease. Especially with the new ramped up 3 potentially coming out next year.

[@jml9550]

@@peebe2475don’t ever lease. Buy it in cash and keep it for until it dies. That’s the best financial move.

[@alexronaldinho12]

If I lease a model y in 2024 will the 7500 be able to be used upfront as down payment?