We are an unmarried couple who bought a car together. We bought a plug-in hybrid (PHEV) and it qualifies for a $4000 federal tax credit. Can the EV tax credit be split between the two of us (filing separately)? How would that work?

So here are the list of cars and credits: https://www.fueleconomy.gov/feg/taxphevb.shtml

And here is the IRS form: http://www.irs.gov/pub/irs-pdf/f8936.pdf

On line 4 of the form, I could just type in half the credit amount on each person's tax return. But does anyone have an opinion on doing that?

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    Who's name is on the title? – littleadv Mar 7 '14 at 22:52
  • Both actually ... – efesar Mar 10 '14 at 16:22

The big problem will be that the forms have to include the Vehicle Identification Number (VIN). That implies that there is the possibility that one of the forms might be rejected. There is also the problem that the form may be flagged because the amount claimed doesn't match the amount expected based on the make and model.

The best approach is for one person to claim the whole amount, then transfer half the value of the credit to the other one in cash. That might be difficult because there of the size of the credit, but with the refund it might not be that bad unless you have both planned your tax situation to not get a refund.

  • Excellent suggestion, why is credit size an issue? – JTP - Apologise to Monica Mar 8 '14 at 0:51
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    @JoeTaxpayer $2k in cash raises eyebrows. Though if a check would do that should be fine. – C. Ross Mar 8 '14 at 1:32
  • Ok. A check should be fine. I guess $2K cash being too much didn't occur to me. I've been reading too many blogs suggesting one never use credit cards. These folk must have wads of cash on them most days. – JTP - Apologise to Monica Mar 8 '14 at 2:03
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    @JoeTaxpayer: Or a debit card. Or a checkbook. – Ben Voigt Mar 8 '14 at 3:50
  • @BenVoigt - next time you book a hotel, let me know if they let you reserve and then pay for the room with a check. Or, next time you reserve a room on the debit card, let me know how much of your money was just held in reserve. Every time you swipe the debit card for gas, that $10 purchase will hold $50 for 2-4 days. A tough path to be on. – JTP - Apologise to Monica Mar 8 '14 at 11:54

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