Discover the ins and outs of Colorado's Electric Vehicle Tax Credit. Aimed at residents of Colorado, this guide provides a comprehensive overview of the state's Innovative Motor Vehicle Credit program. Learn about the purpose and eligibility criteria. Explore the types of entities eligible for the credit and the specific requirements for qualifying vehicles. Whether you're considering going electric or simply curious about Colorado's green initiatives, here is additional information on how it could benefit your taxes. 
Purpose and Eligibility:

• Colorado offers a refundable income tax credit for the purchase or lease (min. 2 year lease) of qualifying motor vehicles.
• Available for new electric and plug-in hybrid electric motor vehicles titled and registered in Colorado.

Eligible Entities:

• Individuals, estates, trusts, C corporations, partnerships, and S corporations.
• Tax-exempt entities and local governments in Colorado (for income tax years from January 1, 2024).

Qualifying Motor Vehicles:

• Four-wheeled electric or plug-in hybrid vehicles with a maximum speed of 55 mph.
• Gross vehicle weight rating (GVWR) of 8,500 pounds or less.
• Propelled significantly by an electric motor.
• Rechargeable battery with a capacity of at least 4 kWh.
• Must be new (first time transferred from manufacturer, importer / dealer with less than 1,500 miles), titled, and registered in Colorado.

Titling and Registration:

• Credits only apply to vehicles titled and registered in Colorado.
• Temporary registration permits are insufficient to satisfy the registration requirement.

Credit Amounts:

• For tax year 2023 (purchases or leases after July 1, 2023) and 2024, the credit is $5,000. For 2025 the credit is reduced to $3,500. 
• No credit for vehicles purchased or leased after June 30, 2023, with an MSRP over $80,000.
• Additional credit of $2,500 for vehicles with an MSRP under $35,000 and an option for advanced payment.
• Additional credit of $600 for assigning the entire allowable credit to a financial entity or motor vehicle dealer.

Credit Assignment:

• Purchasers or lessees can assign credits to financing entities or motor vehicle dealers.
• Compensation for credit assignment must be made in cash or similar considerations.
• The motor vehicle purchaser or lessee and the financing entity must complete and sign an election statement (form DR 0618) to assign the credit. The election statement must be completed at the time of the purchase or lease.

Claiming the Credit:

• Claimed on the Colorado income tax return for the tax year in which the purchase or lease occurred on form DR 0617.
• Excess credit may be refunded if it exceeds the taxpayer's tax liability for the year.

Estimated Tax Payments:

• Taxpayers can consider the credit in calculating estimated payments for the tax year.

Navigating the electric vehicle tax credit involves understanding filing procedures and changes effective from 2024. Whether claiming the credit on your tax return or transferring it to the dealer, staying informed ensures a smooth process. As always, consult with us for personalized guidance based on your unique circumstances.

*Note: The information provided is based on the latest details as of 02/05/2024. Tax laws are subject to change, and it's essential to stay informed about any updates.

As we kick off the new year, tax season is in full swing. We sincerely hope your year has been off to a fantastic start. Here at Cornbelt Financial, we're dedicated to making your tax filing process smooth and stress-free.

By now, most of you should have received the majority of your tax documents from various sources. We encourage our current clients to take a proactive approach and upload all available documents to our secure portal as soon as possible. If you are looking for support on your taxes this year and are not yet a Cornbelt Financial client, please reach out to us today and we would be happy to discuss options with you. This proactive step will help us stay ahead of the tax deadline and avoid any last-minute chaos.

Current Cornbelt Financial Clients: 
Action Required:
If you haven't already, keep an eye out for our engagement letter and client portal invites from the following email addresses:

• [email protected]
• [email protected]

If you haven't received these emails, we recommend checking both your inbox and spam folder. Adding these email addresses to your contacts will ensure that our system-generated emails make it safely to your inbox, keeping you informed every step of the way.

Why Upload Early?
Uploading your documents early allows us to review your information thoroughly, identify any missing pieces, and provide you with timely guidance and support. By working together proactively, we can minimize both yours and ours stress, provide a better experience for you, and minimize any potential issues.

Need Assistance?
If you encounter any difficulties or have questions about the uploading process, please don't hesitate to reach out to our team. We're here to assist you every step of the way and ensure that your tax filing experience is as seamless as possible.

Thank you for entrusting Cornbelt Financial with your tax needs. We appreciate your continued partnership and look forward to helping you achieve your financial goals in the year ahead.

Receiving a notice from the IRS or the Department of Revenue can be unsettling, but it's essential to address it promptly and correctly. Here's a step-by-step guide on what to do if you find yourself in this situation. 
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Notify Cornbelt Financial Immediately:
The moment you receive a notice, don't hesitate to reach out to us. Please upload a complete copy of the notice through our secure client portal. Prompt communication allows us to begin the resolution process swiftly.
Be Cautious of Communication Methods:
The IRS and the Department of Revenue primarily communicate through traditional mail. Be wary of phone calls or emails claiming to be from these entities. The IRS won't call you demanding immediate payment, nor will they initiate contact via email. If in doubt, consult with us before responding.
Confirm the Legitimacy of the Notice:
Before taking any further action, let us review the notice to confirm its legitimacy. Unfortunately, scams and phishing attempts are prevalent. By involving us, we can ensure that the notice is genuine and not a fraudulent attempt to obtain sensitive information or your money.
Understand the Reason for the Notice:
Once we've verified the notice, we will analyze its contents to determine why it was issued. Notices can cover a range of topics, from discrepancies in tax returns to requests for additional information. Understanding the reason is crucial for crafting an effective resolution strategy.
Don't Panic - Stay Informed:
It's natural to feel uneasy when you receive a notice, but it's important not to panic. We are here to guide you through the process, explain the implications of the notice, and outline the necessary steps for resolution.
Remain Patient:
Unfortunately, the IRS and many other agencies are backlogged and understaffed. Additionally, due to their outdated means of communication and resolution channels in place, resolution often takes a long time to achieve.
Follow Our Guidance & Respond Promptly:
If a response is required, we’ll guide you on the specific steps to take for resolution promptly and ensure that the information provided is accurate. Follow our instructions carefully, and if you have any questions or concerns along the way, don't hesitate to reach out. Delays or inaccuracies in your response could lead to additional complications.
Keep Records:
Maintain a copy of the notice and any related correspondence for your records, this includes certified mail receipts. This documentation is valuable for reference and can aid in the resolution process.

Remember, you are not alone in navigating these matters. Our team at Cornbelt Financial is here to support you every step of the way. By taking the right actions and avoiding common pitfalls, we can work together to address the notice efficiently and effectively.

Are you considering the purchase of a NEW electric vehicle (EV), plug-in hybrid, or fuel cell electric vehicle in 2024 or did you purchase one in 2023?
The federal income tax credit for these eco-friendly vehicles is a significant incentive. Here's a breakdown of the key details:

1. Maximum Credit of $7,500:

• All-electric, plug-in hybrid, and fuel cell electric vehicles purchased new, after 2022, could qualify for a federal tax credit of up to $7,500. However, the actual amount depends on factors such as the vehicle's MSRP, final assembly location, battery sourcing, and your modified adjusted gross income (AGI) ​

2. ​Eligibility Criteria:

• To qualify, individuals and businesses must:
  • ​​Purchase the vehicle for personal use, not for resale.
  • Use the vehicle primarily in the U.S.
  • Have a modified AGI below $300,000 for married couples filing jointly, $225,000 for heads of households, and $150,000 for other filers.

3. Vehicle Requirements:

• To be eligible, the vehicle must:
  • Have a battery capacity of at least 7 kilowatt hours.
  • Have a gross vehicle weight rating below 14,000 pounds.
  • Be manufactured by a qualified manufacturer.
  • Fuel cell vehicles are eligible regardless of the manufacturer.
  • Meet the Final Assembly Requirement, indicating assembly in North America.

4. Critical Minerals and Battery Component Requirements:

• For vehicles placed in service after April 18, 2023, the credit amount depends on meeting critical minerals and/or battery component sourcing requirements.
• Vehicles meeting both requirements may qualify for the full $7,500 credit, while those meeting only one receive $3,750.
• MSRP Requirement: The vehicle's MSRP can't exceed $80,000 for vans, SUVs, and trucks, and $55,000 for other vehicles.

5. Final Assembly Location Verification:

• Verify your vehicle's final assembly location using the VIN on the window sticker or the Department of Energy's online VIN Decoder tool.
• For vehicles placed in service after January 1, 2024, the dealer must be registered with IRS Energy Credits Online.

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6. MSRP Definition:

• The MSRP is the manufacturer's base retail price plus the retail price of attached accessories.
• Exclusions: It does not include destination charges, dealer-added items, taxes, fees, or incentives.

7. Filing for the Credit:

• For vehicles placed in service before January 1, 2024, file Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit, with your tax return to claim the credit.
• The credit is nonrefundable, capped at your tax liability, and cannot be carried forward.

8. Changes Starting January 1, 2024:

• Credit eligibility and amount will be determined at the time of sale using the IRS Energy Credits Online website.
• The dealer will complete and submit the time-of-sale report online, providing real-time acceptance or rejection.
• You will receive a copy of the time-of-sale report from the dealer, necessary for claiming the credit.

9. Eligibility Verification:

• Search for eligible vehicles using this link.
• If the vehicle qualifies, you have two options:
  • Claim the credit on your tax return using Form 8936.
  • Transfer the credit to the dealer, reducing your final purchase cost. The dealer will be reimbursed by the IRS.

10. Buyer Responsibilities:

• Dealers aren't required to verify buyer eligibility at the time of sale.
• It's your responsibility to ensure you meet all buyer requirements.
• Dealers must provide modified adjusted gross income requirements for your information.

Navigate the Federal Tax Credit for Pre-owned Electric Vehicles

1. Federal Tax Credit for Pre-owned Electric Vehicles:

• Effective January 1, 2023:
  • Pre-owned all-electric, plug-in hybrid, and fuel cell electric vehicles may qualify for a federal income tax credit.
  • The credit equals 30% of the sale price, capped at a maximum credit of $4,000.

2. Credit Details:

• The credit is nonrefundable, meaning it cannot exceed your tax liability.
• Excess credit cannot be applied to future tax years.

3. Qualification Criteria:

• Pre-owned vehicles must be purchased on or after January 1, 2023.
• Purchase must be from a dealer.
• The sale price should be $25,000 or less.
• The vehicle must have a model year two years prior to the current calendar year.

4. Exclusions:

• Pre-owned vehicles purchased before 2023 do not qualify for this credit.
• New vehicles may be eligible for other credits available.

​
5. Who Qualifies:

• Individuals purchasing a qualified plug-in electric vehicle (PEV) or fuel cell vehicle (FCV) under Internal Revenue Code Section 25E may qualify. 

6. Qualification Criteria:

• Be an individual using the vehicle, not for resale.
• Not be the original owner.
• Not be claimed as a dependent on another person’s tax return.
• Not have claimed another used clean vehicle credit in the three years before the purchase date.

7. Income Thresholds:

• Modified adjusted gross income (AGI) limits:
  • $150,000 for married filing jointly or a surviving spouse.
  • $112,500 for heads of households.
  • $75,000 for all other filers.
• Use the modified AGI from the year of delivery or the year before, whichever is less.

8. Vehicle Requirements:

• Made by a qualified manufacturer.
• Sale price must be $25,000 or less.
• Model year at least two years earlier than the purchase year.
• Not transferred after August 16, 2022, to a qualified buyer.
• For use primarily in the United States.
• Gross vehicle weight rating of less than 14,000 pounds.
• Eligible fuel cell vehicle or plug-in electric vehicle with a battery capacity of at least 7 kilowatt hours.

9. Qualified Sales:

• Purchase from a licensed dealer.
• For qualified used PEVs, the dealer provides required information.
• Information includes dealer and buyer details, sale date and price, VIN, battery capacity, and transfer credit details.
• For sales after December 31, 2023, the dealer must be registered with IRS Energy Credits Online.

​For additional information on the Federal Electric Vehicle Tax Credit please contact your Cornbelt Financial representative today.