Question

Is the state EV rebate a taxable income for Federal income tax?

Forum|Forum|4 years ago
March 22, 2022
1 reply
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I purchased an electric vehicle in 2019 and received Maryland EV rebate in 2021. Is the state EV rebate a taxable income for the Fed. income tax? If so, where in 1040 should I enter the amount of the state EV rebate?

Tax Advice

T

ThomasM125

If it is a rebate it would be taxable on your federal return, as it is not simply a reduction in the price of the vehicle and it is not paid out as a reduction of your state income tax. However, if it is a reduction of tax, it would not be taxable on your federal tax return. If taxable, you would report it in TurboTax as follows:

Go to the Income and Expenses section of TurboTax

- Choose Less Common Income

- Choose Miscellaneous Income, 1099-A, 1099-C

- Choose Other reportable Income

- Enter a description and the amount of your rebate

@sonicpoem

[Edited 3/23/22 at 11:02 AM EST]

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S

sonicpoemAuthor

My apologies. I just checked the MD state website and the technical term for this incentive was referred as 'excise tax credit for a qualifying plug-in electric or fuel electric vehicle'. If it is 'tax credit', is it considered same as 'rebate' for tax purpose or are they handled differently?

DMarkM1

The MD EV excise tax credit is not income. This is a refund of a tax you already paid and no more. In other words it is not a refundable tax credit which would be income because it would be over and above the tax you paid. You do not need to report that tax credit as income on your return.

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