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August 26, 2009
Turns out that the $4500 "cash for clunkers" rebate is taxable
Always look a gift horse in the mouth as this KCLO report by
But many of those cashing in on the clunkers program are surprised when they get to the treasurer's office windows. That's because the government's rebate of up to $4500 dollars for every clunker is taxable.
"They didn't realize that would be taxable. A lot of people don't realize that. So they're not happy and kind of surprised when they find that out," Nelson said.
For now, the biggest impact of the program hasn't hit this office yet, as most of the paperwork is still in the hands of the dealers. But Nelson expects to see move activity in her office in the next month.
"I'm anxious to see what it's going to be like. I have no idea how many people we're going to see. Hopefully the dealers can process their paperwork in 30 days," Nelson said.
And that's when the line at this office will give some indication of how many cars the government program moved off of local lots.
Nelson adds that if you did recently purchase a vehicle, ensure your dealer gets you the paperwork in time because if they don't you could pay extra interest and penalties.
The rebate will be taxed as regular income which means - with no payroll deductions - most of the buyers will have a nice, healthy tax bill next year.
And yes - These are the people we want running our health care system?