To determine your modified adjusted gross income (MAGI) for the EV tax credit, the IRS follows these steps:
- Start with Adjusted Gross Income (AGI): Begin with the AGI as reported on line 11 of your Form 1040. This is the foundation for calculating MAGI.
- Add Back Certain Deductions and Income Exclusions:
- Add back any income or deductions that were excluded from your gross income. For example:
- Any amount on line 45 or line 50 of Form 2555, Foreign Earned Income.
- Any amount excluded from gross income because it was received from sources in Puerto Rico or American Samoa.
- Add back any income or deductions that were excluded from your gross income. For example:
- Income Limits for EV Tax Credit Eligibility:
- For new clean vehicles, the EV tax credit income limits are as follows:
- Married filing jointly or qualifying surviving spouse: MAGI must not exceed $300,000.
- Head of household: MAGI must not exceed $225,000.
- All other filers (single, married filing separately): MAGI must not exceed $150,000.
- For used clean vehicles, the limits are:
- Married filing jointly or a surviving spouse: MAGI must not exceed $150,000.
- Head of household: MAGI must not exceed $112,500.
- All other filers: MAGI must not exceed $75,000.
- For new clean vehicles, the EV tax credit income limits are as follows:
- Eligibility Based on Prior Year Income:
- You may claim the credit if your MAGI in the year of purchase or the preceding year is below the applicable threshold, even if your filing status changes.
By following these steps, you can determine whether your MAGI qualifies you for the EV tax credit.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-irs-determine-my-modified-adjusted-gross-income-for-the-ev-tax-credit/
