Comment by tzs
3 months ago
However instead of taking the credit yourself you can transfer it to the dealer at time of purchase to use toward the purchase. You can transfer the full $7500 credit regardless of how much tax you eventually end up owing for the year.
That's an important point that I missed in my research, though it does seem like there are limitations? [1]
If the buyer's previous-year adjusted gross income is too high they still don't qualify, and if the buyer's purchase-year adjusted gross income is too high they can end up owing money to the IRS.
And dealers/sellers have to qualify and register but...
> Advance payments received by the registered dealer are not treated as a tax credit to the dealer and may exceed the dealer’s regular tax liability. Advance payments received by the registered dealer are not included in the gross income of the dealer.
That does read as a direct subsidy equivalent to a refundable tax credit straight from the general fund.
[1] https://www.irs.gov/newsroom/topic-h-frequently-asked-questi...