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Tax credit for your Tesla

So far the $100,000 plug-in is the only vehicle to qualify for an electric-car tax credit this year.

By Karen Datko Apr 5, 2010 2:39PM

Our hat’s off to Kathy Kristof, a personal-finance columnist (and MSN Money contributor) who has a knack for uncovering financial facts that make absolutely no sense.

 

Kristof delights in exposing rules and situations that make us cringe -- like the 703.8% interest credit card bill or the bank that allowed a $50,000 fraudulent withdrawal from a business checking account and said, “Oops, you’re out of luck.” In the same vein, she now explains the new $7,500 tax credit for people who buy a $100,000 Tesla Roadster in a new post at CBS MoneyWatch.

 

Kind of like last year’s tax credit for buying what amounts to a free golf cart, this year people can get a “new qualified plug-in electric drive motor vehicle credit” of up to $7,500. The only car that’s certified under the IRS’ standards so far is the super sporty Tesla. “The Tesla credit can reduce your tax to zero, but not below. Conveniently, it also offsets the so-called Alternative Minimum Tax,” Kristof wrote.

However, rich folks must act quickly to get this break. Once 200,000 of qualifying cars are sold, the credit will drop to $3,750 and then disappear.

Will other vehicles qualify? Probably. “In theory, other cars might eventually get certified and Tesla will have to share the tax credit glory,” Kristof wrote. “But given the speed of the IRS certification process, it could take some time.”

 

Related reading:

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