Latest news with #taxcredit
Yahoo
3 days ago
- Automotive
- Yahoo
EV tax credit elimination: What it could mean for Tesla and the US auto industry if it ends
The reconciliation bill working its way through Congress would eliminate the electric vehicle tax credit created under the Inflation Reduction Act. The removal of the credit, created to incentivize U.S. consumers to purchase electrified vehicles, would likely lead to a drop in EV sales and production. However, Tesla sales would likely remain largely unaffected, one expert predicts. "Getting rid of this $7,500 tax credit should not impact [Tesla] sales," automotive expert Lauren Fix told FOX Business. "People buy Teslas because they like the product… They know what their customers want, and those that like Teslas will continue to purchase that product." The One Big Beautiful Bill Act was approved by the House on May 22 in a 215-214 vote. If the measure passes the Senate and is signed into law by President Donald Trump, the $7,500 new-vehicle tax credit and $4,000 used-vehicle tax credit incentives on EVs would be killed, along with subsidies for battery manufacturing, the text of the bill says. The EV tax credit, which started during the Obama administration, is set to expire on Dec. 31, 2032. The new provision "accelerates the expiration to December 31, 2025." Trump Team Reportedly Looking To Kill Biden's $7,500 Ev Tax Credit Ending the clean vehicle tax credit would result in a sharp decrease in EV sales in the U.S., Fix said. "Once that tax credit goes away, I'm expecting [electric vehicles] to be about 2% of sales," Fix said, noting that EVs currently account for around 8% of total car sales in the U.S. "There will still be electric vehicle sales, Tesla will still survive and [Elon Musk] will do well. And other brands will make what consumers want." Read On The Fox Business App Federal Ev Tax Credit Slashed In Half For Some Tesla Model 3S In 2024 Tesla, the leading EV manufacturer in the U.S., has focused more on selling carbon credits to other automakers than it has on consumer tax incentives. The company, which has moved the bulk of its production to Texas, has also become "more efficient and effective" in its manufacturing, according to Fix. "What Tesla has done, and they don't really care about the $7,500 tax credit, is they were selling carbon credits to all the other car manufacturers," Fix said. "That's where they've made their profits." Trump Wants To Roll Back Biden's Ev Push: Here Is How It Would Affect Consumers Meanwhile, other leading EV automakers like Hyundai and Ford may decide to reduce production of electrified vehicles if the One Big Beautiful Bill Act is signed into law, she said. "You're going to see their production quantities drop dramatically," Fix said. "The only reason the manufacturers are building electric vehicles to begin with is because they were mandated to do so." Trump in January issued an executive order to "eliminate the electric vehicle mandate and promote true consumer choice." Click Here To Get Fox Business On The Go Tesla, Hyundai and Ford Motor Company did not immediately respond to FOX Business' request for article source: EV tax credit elimination: What it could mean for Tesla and the US auto industry if it ends Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
E&E News
4 days ago
- Business
- E&E News
Energy Department expands eligibility for clean fuel tax credit
The Energy Department on Friday expanded the range of companies and producers that can claim the clean fuel production tax credit under Democrats' climate law — delivering a win for biofuels proponents on a tax incentive that was the subject of intense debate under the Biden administration. The Trump administration announced it was updating the modeling tool used to determine eligibility to claim the credit, which it said would account for new feedstocks and methods of production like ethanol from corn wet-milling and natural gas from coal mine methane. Lou Hrkman, principal deputy assistant secretary for energy efficiency and renewable energy, said in a statement the latest version of the modeling tool will allow more farmers 'to reap the benefits of a rapidly expanding market for alternative transportation fuels.' Advertisement The department also released an updated user manual that provides guidelines for how to determine life-cycle greenhouse gas emissions of certain production pathways.
Yahoo
5 days ago
- Business
- Yahoo
Child and dependent care credit: How it works, who qualifies and how much it's worth
As parents know all too well, child care can be almost prohibitively expensive. U.S. families spend up to $15,600 a year on day care — and that's for just one child — according to a 2024 analysis of 2022 data, the most recent available, by the U.S. Labor Department. The federal government helps defray at least some small portion of those costs with the child and dependent care credit, which is currently worth up to $1,050 for some taxpayers with one child or dependent, and up to $2,100 for some taxpayers with two or more children or dependents. The exact amount of the credit depends on your adjusted gross income (AGI) — the higher your income, the smaller the tax credit. Here's what you need to know about how the child and dependent care tax credit works, who qualifies and how much you could receive to help offset the cost of spending thousands of dollars each year on child care. The child and dependent care credit is a tax break to help cover families' child care expenses, so they can continue working or searching for employment. That work could be for your own business, as well as for a full- or part-time job. Be careful not to confuse the child and dependent care credit with the child tax credit, which is not tied to a specific type of spending. You can claim both the child tax credit and the child and dependent care credit in the same year. (Consider the earned income tax credit, too.) The amount of the child and dependent care tax credit you're eligible to claim is a percentage of the expenses you paid to a care provider, depending on how many dependents you have and your household's adjusted gross income (AGI). Qualified taxpayers can claim 20 percent to 35 percent of care expenses, up to a limit of $3,000 of expenses for one child or dependent and up to $6,000 for two or more children or dependents. The 'work-related' qualifier is key. Paying for babysitting or child care expenses to take a vacation, for example, wouldn't be considered a qualifying expense. There's no income limit to be eligible for the credit. Also, the credit isn't refundable. That means it can reduce your tax bill to zero, but you don't get any money back as a refund from this credit. Learn more: 10 easy tax deductions and credits to trim your tax bill Need an advisor? Need expert guidance when it comes to managing your money? Bankrate's AdvisorMatch can connect you to a CFP® professional to help you achieve your financial goals. To qualify for the child and dependent care credit, families must have: a qualifying child or dependent, child care expenses that were incurred to work or look for a job, a jointly filed tax return if you're married, unless you're considered legally separate, and earned income during the tax year. Read on for details on each requirement for the child and dependent care tax credit. Your child care expenses must be for children who are younger than 13 years old. In special circumstances, though, taxpayers can claim expenses for care for individuals older than 13 if they're considered physically or mentally incapable of providing their own care and live with you for more than half of the year, according to the IRS. Those could be your dependents, as well as a spouse. See IRS Publication 503 for more details on the definition of a qualifying child or dependent. Eligible caregiving expenses include the cost of putting your child in daycare, preschool, day camp and nannying arrangements. Caretaking can be provided both outside or inside your home, but you'll have to provide the IRS with documentation — usually the caregiver's name and individual taxpayer identification number (ITIN), which is often their Social Security number. You can even pay relatives to take care of your children, as long as they're not: Younger than age 19 when they provided that care, An individual who you or your spouse can claim as a dependent, Someone who was your spouse at any time during the past year, or The parent of your qualifying dependent. Married taxpayers must file a joint return to claim the credit, unless they're considered legally separated or living separate from their spouse — distinctions that would lead the IRS to classify a taxpayer as unmarried. Generally, a couple who files as married filing separately is ineligible for this tax credit, but read IRS Topic No. 602 for more details. Wages, salaries, tips or other forms of pay where federal income taxes are withheld count as earned income, according to the IRS. But this is one of the tricky aspects of this tax credit. The IRS lets taxpayers claim child care expenses that they incurred while looking for work, but if you don't find a job and thus have no earned income for the year, you can't claim the credit. Learn more: Current tax brackets and federal income tax rates How much you receive depends on how much you spent during the year on work-related child care. Taxpayers with one child can claim up to $3,000 of qualifying expenses, while those with two or more children can claim up to $6,000. The credit is worth 20 percent to 35 percent of what you paid for qualifying child care expenses, depending on your income. To qualify for the 35 percent credit — and thus get the maximum $1,050 credit for one child or $2,100 credit for two or more children — taxpayers must have adjusted gross income (AGI) of $15,000 or less. The percentage decreases as AGI increases. Taxpayers with AGI of $43,000 or more receive a tax credit of 20% of qualifying expenses up to $3,000 (or $6,000 for two or more children or dependents). Here's the maximum tax credit for 2024 tax returns, filed in 2025, for two different levels of adjusted gross income: AGI up to $15,000 and AGI of $43,000 or more: Number of children/dependents Maximum expenseto calculate credit % of expenseeligible for creditfor AGI up to $15,000 Max. credit forAGI up to $15,000 % of expenseeligible for creditfor AGI of $43,000+ Max. credit forAGI of $43,000+ One $3,000 35% $1,050 20% $600 Two or more $6,000 35% $2,100 20% $1,200 The more money you make, the smaller the tax credit you'll receive. The 35 percent maximum rate phases out once a taxpayer earns more than $15,000 a year, until it reaches 20 percent when a household makes $43,000 or more in adjusted gross income. That means all taxpayers whose incomes are above that threshold would receive a maximum of $600 in tax credits if they have one child or $1,200 if they have two or more children. Here's how the phase-out works: If your adjusted gross income is… Then the credit is worth thispercentage of qualified expenses: $0 – $15,000 35% $15,000 – $17,000 34% $17,000 – $19,000 33% $19,000 – $21,000 32% $21,000 – $23,000 31% $23,000 – $25,000 30% $25,000 – $27,000 29% $27,000 – $29,000 28% $29,000 – $31,000 27% $31,000 – $33,000 26% $33,000 – $35,000 25% $35,000 – $37,000 24% $37,000 – $39,000 23% $39,000 – $41,000 22% $41,000 – $43,000 21% $43,000 – no limit 20% Some employers let workers contribute funds tax-free to a flexible spending account (FSA) specifically for child care. That money is already getting a tax benefit, and the IRS won't let you double-dip, meaning the FSA funds that you used to cover a work-related child care expense can't count toward the child care tax credit. But you can deduct the difference. Say you spent $11,000 in 2024 on child care for your two children, and you covered $5,000 of those expenses with your FSA funds. You could claim the remaining $6,000 in expenses on your taxes. If your AGI is $43,000 or more, that means a maximum tax credit of $1,200. Taxpayers have to complete Form 2441 and file it with their federal income tax return to claim the child and dependent care tax credit. On Form 2441, the IRS asks for information about qualifying caregivers, including their Social Security or ITIN numbers, their address, whether they work as your household employee and the total amount that you paid them. All of that means you'll want to keep careful track of how much you spent on work-related child care in any given tax year. Most businesses should send you all of the information that you need at the end of the year, but individually employed nannies, relatives or caregivers might not. Even so, tallying for yourself how much you spent can help ensure that you don't leave any money on the table. How long does it take to get your tax refund How bonuses are taxed Gross income vs. net income Sign in to access your portfolio
Motor Trend
24-05-2025
- Automotive
- Motor Trend
The House of Representatives Sends Bill to Senate With EV-Targeting Fees, Tax Credit Elimination
U.S. politics are intersecting with EVs in a big way. First, Congress sent a bill to kill 'EV mandates' by removing California's ability to set its own fuel economy standards for cars sold there. Now, the U.S. House of Representatives has passed the 'One Big, Beautiful Bill' President Trump requested over to the Senate, which Republicans hope will be signed into law soon. This bill aims to strike down federal EV tax credits that help incentivize EV adoption by offsetting some of their price premiums over internal-combustion equivalents, and introduces a Federal annual registration fee for EVs and hybrid vehicles. 0:00 / 0:00 Removal of the federal tax incentive for purchasing or leasing an EV or a plug-in hybrid vehicle was a key campaign promise of Trump's. Now, as President, it appears he might well be on the way to fulfilling that promise and potentially more if the Senate passes the 'One Big, Beautiful Bill' that the House of Representatives sent over for reconciliation. Of the over 1,000 pages within the bill that USA Today posted, there is a provision to accelerate the expiration of the Federal EV Tax Credit from December 21, 2032 to December 31, 2025, killing the credit for eligible buyers looking to take advantage of it in 2026. That's not the bill's only provision affecting EV ownership. In addition to removing the tax credit, the bill looks to institute a Federal Annual Registration Fee for both EVs and hybrid vehicles. The reasoning behind this is the fact that EV owners—and, to a lesser extent, hybrid vehicle owners—don't pay as much tax towards the government related to roadways that gas taxes help pay into. What would this annual tax cost? $250 for every EV and $100 for every hybrid vehicle. There is some logic in getting EVs—in particular—to pay for road use, somehow. They use roads, too, while not paying into the gas tax (or paying less into them, in the case of hybrids) than other vehicles. That's a fair debate to have. But the bill swings the pendulum wildly against EVs and hybrids. At $250 per year, the proposed registration fee would equate to the taxes paid by an internal combustion vehicle consuming 1,358.7 gallons of fuel (with the federal tax on fuel being $0.184 per gallon). Putting this another way, that's 32.35 barrels of fuel according to calculation with a barrel equaling 42 gallons of fuel. The only vehicle close to that annual fuel consumption (as estimated by the EPA) is the Bugatti Chiron Super Sport, at 33.10 barrels. A supercar that gets 8 mpg city, 11 highway, and 9 combined and needs 11.1 gallons of fuel to go 100 miles. It's also a car that costs $3.825 million. That's an extreme example, of course, but the point is, the proposed EV fee seems to penalize EV drivers by saddling them with a higher burden of gas tax–like revenue for road maintenance and repairs. In a way, hybrids are lucky; per the new bill, they face a mere $100 annual fee, but that's still equivalent to paying gas tax on a ridiculous 543.5 gallons of gasoline. To put that one into perspective, you would need to essentially double the annual fuel consumption—6.8 barrels of fuel—of the 2025 Toyota Camry Hybrid AWD XSE to equal the $100 annual fee. And that's not even the most fuel-efficient hybrid there is in Toyota's lineup, that goes to the 2025 Toyota Prius at 5.2 barrels, and you would need to increase its consumption by 2.5 times. There is a legitimate need to have EVs pay for their road usage, however, the way this bill is going about it is wrong as far as the amount an EV or a hybrid vehicle should pay. Essentially charging an EV what the owner of a powerful supercar might pay for seems punitive, not playing field leveling. Never mind that there does not exist national vehicle registration fee for any vehicle, regardless of what it's powered by, though there is a gas guzzler tax on vehicles with excessively poor fuel economy. But that tax is based on the idea of excessive consumption—EVs do little of the sort, even if they should pay into the same gas tax slush fund that maintains our roads. A bill that balances the need for EVs to pay their fair share seems like a fine idea—but the math on this proposed fee seems off.
Globe and Mail
22-05-2025
- Business
- Globe and Mail
Canada's canola farmers stand to gain from U.S. tax breaks for clean fuel
Embattled Canadian canola farmers are poised to gain from a revised tax credit for clean fuels approved by the U.S. House of Representatives Thursday morning as part of President Donald Trump's 'big, beautiful bill.' The 45Z Clean Fuel Production Credit incentivizes the production of low-carbon transportation fuels in the United States. The tax credit came into force in January as part of former president Joe Biden's Inflation Reduction Act. But certain stipulations made feedstock from Canadian canola ineligible. The Republican bill slashes those requirements. Should the expansion pass through the Senate, it could drive increased demand for Canadian canola – a boost much needed by a sector that recently faced a steep decrease in U.S. sales and tariffs from its second-largest market, China. Political uncertainty north and south of the border has also depressed investment in what was once a booming domestic processing sector. 'We're keeping our fingers and toes crossed that we will see some good news here,' said Chris Vervaet, executive director of the Canadian Oilseed Processors Association. The U.S. tax credit will subsidize the production of transportation fuels with low-life-cycle greenhouse-gas emissions, such as ethanol and biodiesel or renewable diesel. These fuels are sourced from renewable biomass such as corn, soybeans, canola or used cooking oil. It is a win for red farm states, which have been slammed by a trade war with their largest market for corn and soybeans, China. The tax credit is one of the few clean-energy policies from Mr. Biden's 2022 Inflation Reduction Act to survive. (A tax break for buyers of electric vehicles and credits for low-emissions electricity such as wind, solar, battery and geothermal power will be rapidly phased out.) The clean-fuel incentives would be a top-up on requirements under the U.S. Renewable Fuel Standard Program – a federal initiative that requires transportation fuel sold in the United States to contain a minimum volume of renewable fuels. It will help farmers capitalize on growing demand for clean fuel, said John Fuher, vice-president of government affairs at Growth Energy, a U.S. biofuel trade association. According to the group, the credit could add US$21.2-billion to the American economy, and provide farmers with a 10-per-cent price premium on low-carbon corn used at a bioethanol plant. The Biden administration's version of the tax credit represented a loss, rather than a gain, for Canadian canola farmers and processors. To qualify for the tax credit under the previous administration, feedstock had to fall below an emissions threshold. This threshold included emissions caused by switching land to crop production. The indirect land use change (ILUC) policy put Canadian canola above the emissions threshold, making it ineligible for the credits. This had ramifications for trade. There was a 66-per-cent drop between December and March for Canadian crude canola oil exports to the U.S., said Mehr Imran, senior analyst of carbon markets at ClearBlue Markets. The Republican bill eliminates the ILUC policy and stipulates that Canadian and Mexican feedstock would be eligible. Feedstock from other countries – for example, used cooking oil from China – would not. 'We think it is really important that we have open two-way trade between our two countries,' said Geoff Cooper, president and chief executive officer of the U.S.-based Renewable Fuels Association. It is much-needed good news for Canadian canola farmers who have also faced 100-per-cent tariffs on canola oil and meal from China. Beijing's move to introduce the levies in March was in retaliation for Ottawa's tariffs on Chinese-made electric vehicles. Ambitious plans to expand canola crush capacity have also lost momentum. In Canada's largest canola-producing province, Saskatchewan, five new plants were announced starting in 2021. Only one has come online. Others are in progress, behind schedule, indefinitely on pause or have not broken ground. Reasons for delays include trade uncertainty with the U.S. and concerns about a potential new conservative government in Ottawa killing Canada's Clean Fuel Regulations. 'It's always good to have more competition for your product,' said Roger Chevraux, an Albertan canola farmer who serves on the board of the Canadian Canola Growers Association. 'It means we're less vulnerable.' However, the tax credit could have other implications for Canada's refineries, Ms. Imran said. Canada has 10 clean-fuel facilities. While the country is a net exporter of refined petroleum products and crude oil products, it is a net importer of biofuels. There is some investment in clean-fuel processing. For example, on May 2, Imperial Oil Ltd. announced that its highly anticipated renewable diesel facility located near Edmonton will commence operations in mid-2025. U.S. subsidies give refineries south of the border an edge over Canadian plants in provinces without competitive subsidies, Ms. Imran said. 'Canada may want to take a look at the competitiveness of domestic refineries in light of the U.S. incentives.'
