2023 Mach-E priced over $55K & delivered in 2023 will not qualify for tax credit! Latest IRS ruling says Mach-E is a CAR - not SUV !

[J40MME]

Matthew thanks for sharing this, Here is an email I just sent, and hope others follow suit. If they are asking for feed back, let's give it to them:


Dear Andres,

I've been an advocate for EVs for a long while, given the positive sustainability impact and many other benefits. In February of 2022 we put an order in for a Mustang Mach-e AWD with an understanding we qualify for a federal tax benefit of $7,500 and California of $2,000. However given supply chain constraints / delays, etc from Ford, we still have not received our vehicle (ETA 1/9/2023). Recently we have learned that our vehicle no longer qualifies for ANY tax benefits from Federal or State since it is considered a car with an MSRP cap of $55K. A couple of points:

- 3 of the 4 Mach-e models exceed the $55,000 maximum qualification limit. In reality probably equates to 80-90% of models ordered don't qualify.

https://www.ford.com/buy/mach-e/build-and-price.html#/model

- The Mustang Mach-e has been considered an SUV by Ford from the moment it was released in 2021:

"For the first time in 56 years, Ford is expanding the Mustang family, bringing the famous pony into the electric age with Mustang Mach-E, an all-new, all-electric SUV born of the same all-American ideals that inspired the best-selling sports coupe in the world."

https://media.ford.com/content/fordmedia/fna/us/en/products/evs/mustang-mach-e/mustang-mach-e.html

At this point we are seriously considering moving back to a gas or gas / hybrid SUV to remain within our retirement budget.

Thank you for your consideration.

The only other piece I will include, and makes a strong argument, is that the 2022 Mach E is classified as an SUV by the EPA, so the inconsistency here is glaring.

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[moparguy]

Why don't you see if Ford RCL, US Bank, or Ally (lease) might have changed their terms where they have the option to pass the $7500 to you ?

The new IRA allows for commercial companies (like leasing companies) to get the tax credit and the option to credit back the customer either in a direct cap cost reduction or reduced MF/increased RV.

Ford created options so you can lease and claim the $7500, it's dumb to be honest, they should just pass it like VW and Jeep, in Jeep's case though, leases were horrible even when passing down the $7500.

 

[moparguy]

The only other piece I will include, and makes a strong argument, is that the 2022 Mach E is classified as an SUV by the EPA, so the inconsistency here is glaring.

They may readjust this later ( IRS ) but who's willing to take the risk? the official guideline is coming out in April, if adjusted, we don't know if the Mach E will qualify after or before since Jan. 1st .

 

[4sallypat]

The only other piece I will include, and makes a strong argument, is that the 2022 Mach E is classified as an SUV by the EPA, so the inconsistency here is glaring.

Yes, the IIHS, NHTSA, EPA and Ford calls it a SUV; but that does not matter since the IRS rules it as "other".

I think the biggest reason: GVWR.

If you look at the GVWR of the MME, it's shy of the 6000 lbs IRS rule for "heavy GVWR" Section 179 deduction by about 100lbs.

If you look at the '23 VW iD4 S Pro AWD, it just barely passes the 6000lb mark by under 100lbs over.
And that model is $80K MSRP due to the "SUV" rating the Dept of Treasury uses.

That's what I think IRS is using - GVWR.

My Lightning GVWR is 8500lbs and qualifies for the $80K max as it exceeds the IRS' Heavy GVWR Vehicle deduction for businesses ($26K).

 

[generaltso]

Correct.

 

[Sundar]

I posted about the lease loophole back in Post #370. My post below, with link.


Not sure if anyone mentioned this, but apparently 2024 onwards, the tax rebate CAN be applied at the Point of Sale, which means that buyers can transfer the rebate to the dealer. Get the rebate right there, which can help with prices, but also with leases.

I am thinking, this may also help those who want to ditch the MME this coming year, but can still drive and enjoy one next year. (Maybe!)

https://www.pbs.org/newshour/economy/tax-credits-for-electric-vehicles-are-coming-how-will-they-work

How will the credit be paid?
At first, it will be applied to your 2023 tax return, which you file in 2024. Starting in 2024, consumers can transfer the credit to a dealership to lower the vehicle price at purchase.

 

[phil]

Not sure if anyone mentioned this, but apparently 2024 onwards, the tax rebate CAN be applied at the Point of Sale, which means that buyers can transfer the rebate to the dealer. Get the rebate right there, which can help with prices, but also with leases.

No. The consumer gets no rebate on a lease - the rebate goes to the leasing company. It makes no difference to the consumer when the rebate is paid to the leasing company. The consumer only cares whether the rebate is credited in the terms of the lease.

 

[Sundar]

No. The consumer gets no rebate on a lease - the rebate goes to the leasing company. It makes no difference to the consumer when the rebate is paid to the leasing company. The consumer only cares whether the rebate is credited in the terms of the lease.

https://www.pbs.org/newshour/economy/tax-credits-for-electric-vehicles-are-coming-how-will-they-work

How will the credit be paid?
At first, it will be applied to your 2023 tax return, which you file in 2024. Starting in 2024, consumers can transfer the credit to a dealership to lower the vehicle price at purchase.

That is what I said. The Dealership "can" transfer the credit to the leasee to lower the price of the lease. Has happened to me 3 times on my previous EVs (2 Bolts, 1 Leaf).

 

[phil]

https://www.pbs.org/newshour/economy/tax-credits-for-electric-vehicles-are-coming-how-will-they-work

How will the credit be paid?
At first, it will be applied to your 2023 tax return, which you file in 2024. Starting in 2024, consumers can transfer the credit to a dealership to lower the vehicle price at purchase.

That is what I said. The Dealership "can" transfer the credit to the leasee to lower the price of the lease. Has happened to me 3 times on my previous EVs (2 Bolts, 1 Leaf).

Yeah, the lessor has always been able to pass along the amount of their tax credit to the lessee. That does not change either in 2023 or in 2024.

 

[yngwenli]

https://www.pbs.org/newshour/economy/tax-credits-for-electric-vehicles-are-coming-how-will-they-work

How will the credit be paid?
At first, it will be applied to your 2023 tax return, which you file in 2024. Starting in 2024, consumers can transfer the credit to a dealership to lower the vehicle price at purchase.

That is what I said. The Dealership "can" transfer the credit to the leasee to lower the price of the lease. Has happened to me 3 times on my previous EVs (2 Bolts, 1 Leaf).

So on Jan 2nd, 2024 when no one knows their tax situation for 2023, what if you don't even have a tax credit to transfer? Are dealerships going to request forms to get access to your taxes to confirm assuming they are ok with giving this option on a lease? or since it's a business, the dealership qualifies anyways so it's a moot point.

 

[Sundar]

So on Jan 2nd when no one knows their tax situation for 2023, what if you don't even have a tax credit to transfer? Are dealerships going to request forms to get access to your taxes to confirm assuming they are ok with giving this option on a lease?

This is starting in 2024, so I am assuming, they are making changes to the "credit" for it to be able to be passed on to the dealer, irrespective of situation. That is what I read in that article and a couple other commentaries on the tax law change.

 

[Sundar]

This is starting in 2024, so I am assuming, they are making changes to the "credit" for it to be able to be passed on to the dealer, irrespective of situation. That is what I read in that article and a couple other commentaries on the tax law change.

Which is why I think it is different from how it was before. But, we will have to see how Ford does the leases, then we will know. Of course, since many folks are not buying their "non-SUVs" I guess they will have inventory to lease now.

 

[phil]

So on Jan 2nd, 2024 when no one knows their tax situation for 2023, what if you don't even have a tax credit to transfer? Are dealerships going to request forms to get access to your taxes to confirm assuming they are ok with giving this option on a lease? or since it's a business, the dealership qualifies anyways so it's a moot point.

No, car dealers are not going to be analyzing your taxes.

Yes, on a lease, the leasing company may get the federal tax credit. The lessee (customer) does not get any federal EV tax credit, regardless of his tax situation.

 

[generaltso]

This is starting in 2024, so I am assuming, they are making changes to the "credit" for it to be able to be passed on to the dealer, irrespective of situation. That is what I read in that article and a couple other commentaries on the tax law change.

It will still be a nonrefundable tax credit. So if you get the credit at the point of purchase, and you end up not qualifying for the credit when you file your taxes, I would think you'll have to pay it back. But we'll just have to wait and see how the IRS handles this.

In my opinion, the point of sale credit really only made sense in the early versions of the bill that made the tax credit refundable. Now that it's nonrefundable and has a lot of other criteria for qualification, the point of sale rebate is going to be a mess.

 

[gordonf238]

Don't worry folks, the IRS will give the full $7500 to Jeep Wrangler (hybrid) buyers:

https://www.jeep.com/content/dam/fc...Plug-In-Electric-Drive-Vehicle-Credit-4xe.pdf

It has a whopping 49 miles of range!

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