Do you get full tax rebates on efficient cars even if you hardly pay any taxes?

Ariel: Do you get full tax rebates on efficient cars even if you hardly pay any taxes?
Let’s say an electric car has a $ 10,000 tax rebate, but you only pay $ 2,000 in taxes a year. After paying taxes, will you still get that $ 10,000?
@the tax lady: Are you sure? Sounds like you’re talking about a tax deduction and not a tax credit.
Well since I’m seeing different answers, I’m going to need to see a source to mark a 10-pt best answer.

Answers and Views:

Answer by SmartA$ $
Those types of rebates go directly to the manufacturer toward the cost of the car.

So lets say you buy an electric car with a $ 35,000 price tag and a $ 10,000 government tax credit.

You’ll pay the dealer $ 25,000. The government pays the dealer $ 10,000. You claim nothing on your tax return. Your credit comes in the form of being allowed to buy a $ 35,000 car for only $ 25,000.

Answer by the tax lady
The tax credits ONLY reduce your tax bill. They are not “refundable” so if you don’t owe tax, no check.

Answer by acmeraven
Look at the reverse side of your 1040 or go to IRS.GOV and get a free one to look at. Most of the credits are non refundable and will only reduce tax owed. If they exceed the tax owed then the excess just evaporates.

Answer by tro
no there are credits that are only credit to reduce the amount of income tax liability and in most cases are not refunds
case in point the energy credits, great, oh sure, but if you don’t owe enough income taxes for the credit be applied, you just bought an energy efficient appliance

Answer by Judy
No, it could take your taxes to zero, but you wouldn’t get the rest of the money. MOST credits are not refundable, so work like that – only a very few are what’s called refundable, so you get the money whether you pay that much tax or not.

A tax DEDUCTION is an amount subtracted from your income before the tax is calculated. A CREDIT is subtracted from the tax you owe.