GreenHybrid - Hybrid Cars - View Single Post - Will changing W2's increase Hybrid credit?

Tim K · #5 (**permalink**) 06-14-2007, 12:25 PM

Quote:

Originally Posted by Sledge

It will have no impact on the credit, but if you do not owe enough taxes, you won't get the full credit. Since I'm single and not a homeowner (aka lots of deductions) the AMT didn't affect me and I got the full credit. However, since I only have to write a small check to the feds every year, I had to change my W2 so I would have had to pay a lot more in taxes (approximately $2100 more

) Then the full credit comes along and knocks that down back.

Just remember to change your W2 at the end of the year.

I believe that you are mistaken. The credit has nothing to do with how much you've paid over the course of the year or how much you "owe" come April. It is only relative to your entire tax liability and the AMT. Say you make $100,000/yr and are responisble for paying $27,000 for the year. Now say your vehicle qualifies for a $2500 Hybrid credit, your tax liability is then reduced to $24,500 for the year (assuming AMT doesn't apply to you). If you've paid $30,000 through withholdings, the feds will refund you $5,500. If you paid $22,000 through withholdings, you will owe $2,500 April 15th. When the instructions talk about "unused portion of the credit" they are referring to people who run into the AMT limits and can't take the full credit.

That said, playing with your withholding status on your W2 will do nothing to determine the amount of credit you can take.

I'm not a CPA, but I've read enough about this....after not being eligible for "my" $1950 credit....to be pretty sure. If you want a certain answer talk to an accountant.