They say the Chevy Volt is $41,000 price tag but the price comes to $33,500 after the federal EV tax credit.
How would that tax credit work? If I owed $0 in taxes, with the EV tax credit would I get a $7500 refund? Or does the $7500 just come off my income?
Tax credits are subtracted directly from tax due (before looking at tax payments and withholding). Only refundable credits will help you once your tax due is reduced to $0. There are some refundable credits, but the energy credits are not that type. The energy credits also do not carry over to future years - you use them or lose them. (This assumes personal use. A business claiming the credit may be able to carry it forward or back.)
It’s just one of many reasons to talk to your tax pro before you let the salesman fill your head with dollar signs.
So in my scenario of owing $0, the EV credit would do nothing for me? I would think very few people would get the full $7,500 credit, most probably owe considerably less. Of course you have to be fairly well off to afford a Volt anyway.
I think stating the price of the vehicle as $33,500 aft the tax credit is pretty shady.
Most people owe more than $7,500. Maybe you’re confusing tax with the final refund on your return.
If you owe $10,000 in tax, but had $10,000 in withholding on your W-2, then you don’t owe anything additional. However, the tax credit will subtract $7,500 from the $10,000. Now you only owe $2,500 in tax and had $10,000 in withholding. You’ll get a refund of $7,500.
Or maybe you owe $3,000 in tax and had $3,000 in withholding. Again, you owe no additional tax. The credit may be worth $7,500, but it can only cancel out the $3,000 in tax. Your tax goes down to $0, and you get $3,000 as a refund. $4,500 of potential credit is lost in this scenario.
Yes, I was thinking of the final refund. This is why I didn’t do well in accounting. 
Well it sounds like the people that wouldn’t benefit from a $7,500 tax credit probably wouldn’t be buying a $41,000 car anyway.
There may be a little more to it. A friend of mine bought a hybrid Escape and didn’t get the full tax credit because he was in a higher income bracket.
And a car salesman doing something shady surprises you?
The energy credits for solar, geothermal, wind power, etc do carryforward
http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US37F
Not at all, but I’ve been reading many news articles stating the $33,500 price.