I'm running into an issue with this form and it's costing me some time. Hopefully someone that dealt with a similar situation can shed some light. 

A client bought a Tesla Model Y last year. They were given the $7500 credit upfront and it was transferred to the dealer. To my understanding, they still need to report the transaction on form 8936 with the vehicle information, credit transferred and the amount of the transfer. I did all this, but it's coming up with a credit limitation of $4000. This is a new vehicle bought  in cash. The client is rightfully worried that if reported as-is, they will have to pay back the remainder of $3500. Is this correct or am I missing something? 

If relevant, AGI is $95913 and files has HOH. 

Help!