Question

Electric Vehicle credit - Turbotax erred in letting me claim it

Forum|Forum|3 years ago
April 30, 2023
2 replies
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I'm getting ready to file an amended return. Disappointed in TurboTax for letting me file with a major error.

Summary:

1. Am I reading it right and I need to amend my return?

2. This is a big flaw from turbo tax that files a problem return with a $7500 consequence...

I bought a used electric vehicle in 2022 from a dealership. Then filed my taxes and honestly answered all the questions:

Did you buy an electric vehicle = yes

What type did you buy = plug in (the other choices are fuel cell or "did not buy an electric vehicle" which obviously do not apply)

Does it have 4 wheel = yes

What year is it = 2017

Model, date acquired, date placed in service, etc. all answered honestly

Turbotax let the credit go through and I filed. Only to find out later that the vehicle CANNOT BE USED. Aack. Now I have to file an amended return, but this is a big miss by Turbo tax to not add that one very important key word. NEW. It must be NEW. And the software does not have a flag to trigger, if the car is 5 years old, MAYBE IT'S NOT NEW and the filer thinks they've done everything right.

Anyway,

Summary:

1. Am I reading it right and I need to amend my return?

2. This is a big flaw from turbo tax that files a problem return with a $7500 consequence...

DoninGA

Employee

Yes, you need to amend the return and remove the EV credit.

Apparently you missed reading the Note: on the screen Tell Us More About Your Plug-In Electric Drive Motor Vehicle

T

TxHollerAuthor

Thanks for the reply, Donin. I appreciate the feedback.

As for the notice of the requirement, yes, that is on the 4th (I think) screen in smaller font than the rest of the questions. I missed it. It is not on the first screen. It is not on the second screen. It is not on the third screen, and it is not captured as an audit risk when the car is 5 years old.

That's my suggestion for turbotax. That they did not do a useful job of making this key requirement clear. On many of the screens that we follow, there are a series of questions. Well, like the ones you posted. What's the year, what's the make, what's the mileage, what's the VIN, IS IT NEW? If they are claiming to assure people of error-free return, this was a soft, underhand pitch; a low-hanging fruit. "Is it new?" followed by, "Your return has a risk of audit because you are calling a 5-year-old car new. Do you want to check?

It is indeed right up there on the fourth page in small font above the actual questions. You are correct.

Here's where it asks if I bought an electric vehicle. I did. The last box is only true if the word "new" is there. It isn't there.

T

TxHollerAuthor

Anyway, thanks to both of you for the replies. I've pressed "send" on the amended return.

(Which, frustratingly, allows me to file electronically while printing a copy that says I must mail paper. Sigh. Further checking suggests that as of 2019 the electronic submission is acceptable, good thing I noticed the discrepancy and did further research, tho. )

P

Phil_SD

SOrry to read about this situation. According to my understanding of the IRS rules, used EV's purchased from a dealership in 2022 are not eligible for any tax credit. Thus an amendment would be required if the 2022 tax forms have already been submitted. Qualified used EVs purchased from dealers in 2023 are eligible for a reduced tax credit if the buyer and vehicle meet the criteria under the new law. See IRA rules for Used cars https://www.irs.gov/credits-deductions/used-clean-vehicle-credit