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You just described a deduction.

A credit is literally cash (assuming you have enough liability to cover it).

Certain tax credits apply even if you don't have enough liability. Like if you owe zero taxes for the year for some reason they will send you a check for the full credit amount. Not sure which category the EV one falls under though.

Yea your correct, theres refundable and non refundable tax credits, most are of the non refundable variety. It appears the ev tax credit is non refundable.

[1]: https://www.libertytax.com/tax-lounge/electric-car-and-vehic...

[Deleted]

"A tax credit reduces the taxable amount of income you owe taxes on"

is not the same thing as:

"Tax credits reduce the amount of income tax you owe"

The former is a deduction. The latter is a credit. It's really that simple.

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