2022 deliveries still qualify for tax credit under the old bill?

[Eosin]

How many people expecting the $7500 would have to otherwise write a check to the IRS for 2022 taxes of at least $7500? That's the only way to reduce the Mach-e cost by that amount since it is a credit against what you would otherwise owe for 2022 taxes, not a refund.

It has nothing to do with how much you owe at tax time and everything to do with how much taxes you pay/owe total for the entire year. Some people owe more money at tax time. Some people have a refund coming back. Both can be eligible for the full $7,500.

On the tax credit issue, we may just be trying to say the same thing. It's basically that the IRS will not add the 7,500 to any money it owes you. You get to deduct it from any money you owe for the 2022 tax year. If you don't owe them any money and didn't already take the tax credit into account on your tax payments for 2022, your SOL on the tax credit.

That's not accurate... And I have done this twice.

The $7500 absolutely does get added to your refund under the old rules

Example:
Suppose your total tax liability was $100,000 for the year. Tax liability has nothing to do with whether you will owe money or whether you are get a refund when filing taxes.

Next, suppose you paid $110,000 in taxes throughout the year through your paycheck withholdings.

At the end of the year, you would have tax refund of $10,000 coming your way because your tax liability is less than what you paid throughout the year.

Now assume you bought a qualifying EV that year. You will qualify for the tax rebate because your tax liability is $100,000. Your tax refund at the end of the year will now be $17,500 because of the tax rebate. $10,000 + $7500 = $17,500.

In other words, your eligibility has nothing to do with how much you paid during the year and how much you owe or are owed when you file your taxes.

That's a common misconception about how tax rebates a work.

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[generaltso]

Will the one EV every three year limit apply to a person who takes the delivery of a Mach E in 2022 but after the bill is signed?

That only applies to used cars. The limit for new cars is one per taxpayer per year.

 

[machefan]

Question is will the new rules force Ford to move the MME final assembly to USA for USA sold MME's?

I am sure the credit is a large part of ones decision to purchase.

 

[generaltso]

Question is will the new rules force Ford to move the MME final assembly to USA for USA sold MME's?

There are a lot of questions in the new bill, but that’s not one of them. Unless, of course, Mexico is planning to secede from North America.

 

[RickMachE]

It is exactly how the current (2022 tax year)7500$ tax credit works. The new one for 2023 taxes is probably different. RickMachE, are you saying I'm right or SnBGC?

You are wrong.

I checked with my dealer. They received no guidance from Ford. My interpretation is without that, they don't really have a viable way (or an interest) to provide a signed purchase agreement for a vehicle that was ordered but not produced or on their lot.

Why would they have? There is no bill signed into law yet.

On the tax credit issue, we may just be trying to say the same thing. It's basically that the IRS will not add the 7,500 to any money it owes you. You get to deduct it from any money you owe for the 2022 tax year. If you don't owe them any money and didn't already take the tax credit into account on your tax payments for 2022, your SOL on the tax credit.

Incorrect. You could have overpaid them $30,000. Irrelevant.

https://www.macheforum.com/site/thr...husband-and-wife-tax-credits.7591/post-275961

 

[Mrn]

No. That is incorrect.

Let's say your income is such that you can expect to have a tax liability of $12,000 for 2022. Let's also assume you are a wage earner and your employer withholds $1000/month from your paycheck. By now, you would have around $8k withheld from your paycheck.

Let's say you bought a MME last week. And you don't make any changes to your withholding for the remainder of the year.

You file your taxes, your liability is $12k as expected but then you get to deduct $7500 for the EV so now your "EV Adjusted" tax liability is $4500. But you had $12k withheld so you will get a refund of $7500.

Does that make sense?

Not really. Multiple articles I've seen on the CURRENT tax credit said the IRS would NOT send you a check to cover the credit. And with the way the IRS has been gutted and gotten way behind on looking at tax filings, that kind of makes sense.

 

[generaltso]

Not really. Multiple articles I've seen on the CURRENT tax credit said the IRS would NOT send you a check to cover the credit. And with the way the IRS has been gutted and gotten way behind on looking at tax filings, that kind of makes sense.

Dude, give it up. You’re wrong on this. Plenty of us have gotten the tax credit even though we were already getting a refund due to withholding too much. I’ve done it 3 times personally.

 

[dbsb3233]

Question is will the new rules force Ford to move the MME final assembly to USA for USA sold MME's?

I am sure the credit is a large part of ones decision to purchase.

No. Vehicle assembly only needs to be in North America to qualify (which the MME already is - Mexico).

But it will squeeze them on what battery cells they buy and/or build, based on where the raw materials come from. That's no simple task. In fact it may be a nearly impossible task for years for a significant portion of their batteries. That's why (unless the govt issues waivers) we're likely to see the credit available on only a small% of their EVs for the next few years. (My guess would be the Escape PHEV since they'll get the most credits for a limited supply of "approved" battery cells, but that's just a guess. Logistically that may not even be possible.)

By 2025 or 2026, Ford will have their own battery plant and probably be able to produce more qualifying EVs at that point. But of course they'll still be competing with everyone else for those "approved" raw materials sources that will could still be in short supply from the "right" countries.

(The other possibility is that this new law gets amended in a year or two when Congress realizes what a total mess they created, which at the moment is starting to look like a giant (and unnecessary) giveaway to Tesla.)

 

[Regulus7]

[QUOTE="dbsb3233, post: 486252, member: 475"
(The other possibility is that this new law gets amended in a year or two when Congress realizes what a total mess they created, which at the moment is starting to look like a giant (and unnecessary) giveaway to Tesla.)
[/QUOTE]
Tesla only has two factories in n America right? Fremont and Texas. And those factories are producing how many cars? I thought their main driver of new growth was their Shanghai factory which musk praises as their best in terms of worker productivity. So I think the number of EVs sold by Tesla into the US market probably does not increase from what it is now - but this does allow them to increase prices again

 

[dbsb3233]

Tesla only has two factories in n America right? Fremont and Texas. And those factories are producing how many cars? I thought their main driver of new growth was their Shanghai factory which musk praises as their best in terms of worker productivity. So I think the number of EVs sold by Tesla into the US market probably does not increase from what it is now - but this does allow them to increase prices again

Their Shanghai and Berlin factories are irrelevant for this tax credit because they don't produce vehicle that sell in the US. Just Freemont and Austin. And Austin keeps ramping up more and more production each month. They're expecting upwards of a million vehicles a year from there when fully up to speed. Mostly Y's and CTs. They'll surely tweak the features and pricing to make sure they qualify for the $7500, which is on an unlimited # of units. They could be sucking down $5-7 BILLION a year in taxpayer credits soon.

And they're the only ones with their own battery factory in the US (yet). And they've already got some source material supply chains in place. They'll likely be able to secure way more "approved" battery cells than anyone else, probably by a mile.

I don't know how well the Korea and Poland battery plants will be able to adjust to supply US-approved cells for sale to Ford, GM, etc, but that won't be their main focus because they sell all over the world. While the Tesla battery plant in NV can focus 100% on that sourcing.

I may be wrong, but all that seems to add up to Tesla probably getting 3/4ths of the credits for the next few years.

 

[Mrn]

Dude, give it up. You’re wrong on this. Plenty of us have gotten the tax credit even though we were already getting a refund due to withholding too much. I’ve done it 3 times personally.

What the tax law says and what people do don't always match. Las últimas palabras de Miguel en ese topico.

 

[dbsb3233]

What the tax law says and what people do don't always match. Las últimas palabras de Miguel en ese topico.

Well sure, if people do it wrong and fail to claim the credit because they misunderstood how it works and thought they didn't qualify, they won't get it. But that's on them.

We're talking about how the credit actually works from the IRS. Then it's up to filers to claim it if they qualify. And of course, for them to figure out if they qualify. That's true for every credit and deduction in the tax code.

 

[generaltso]

What the tax law says and what people do don't always match. Las últimas palabras de Miguel en ese topico.

But in this case, they do.

 

[SnBGC]

Not really. Multiple articles I've seen on the CURRENT tax credit said the IRS would NOT send you a check to cover the credit. And with the way the IRS has been gutted and gotten way behind on looking at tax filings, that kind of makes sense.

I don't know what articles you are reading but they are mistaken. I received a check from the IRS. Many others have as well.

 

[Deleted member 3569]

It‘s still a tax credit, but it‘s refundable and can be assigned to the dealer so that it can apply at point of purchase. But that provision doesn’t start until 2024.

Wait for the guidance regulations to be published by Secretary or Treasury, which may take a year later.

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