There has been some confusion regarding this credit and specifically Tesla, Inc. As of now the information that the IRS has published regarding tax year 2022 purchases is that these have been phased out of the credit. This manufacturer has sold more than 200,000 vehicles and as of 2020 the credit available is zero. We believe the confusion comes in that the IRS links from within the same publication information for purchases that take place in 2023 or later.
IRS issues guidance on state tax payments to help taxpayers
WASHINGTON – The Internal Revenue Service provided details today clarifying the federal tax status involving special payments made by 21 states in 2022.
The IRS has determined that in the interest of sound tax administration and other factors, taxpayers in many states will not need to report these payments on their 2022 tax returns.
IRS Business Rule F8962-070
“The e-File database indicates that Form 8962 or a binary attachment with description containing “ACA Explanation” must be present in the return.”
This E-File reject is triggered if the IRS has information that indicates that either you, your spouse or one of your dependents has received health insurance from the Market Place.
California’s MCTR has raised a lot of questions in the tax industry. At this point I don’t think anyone has a definitive answer and honestly, I see valid arguments on both sides of the ultimate question of whether it is taxable.
One take away I did have from this topic is that this is another example of how relevant you are as a tax professional verses DIY software being the tax preparer. Having you as a resource to talk through the pros and cons with the taxpayer, in a way they can understand, so they can be part of the overall decision. In my opinion, this is something that can’t be replaced.