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

[Mach Tuch]

If Ford was smart they would have opened up the orders for Mach-E for 2023 this week, and done a "written binding contract" then ever car ordered would qualify for the rebate under the old rules. The 200k limit wouldn't matter is how I read it since everyone will be deemed to buy it the day before the President signs the bill into law.

And base it on last years income level rather than this years.

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[SWO]

Wow, good point. That is insane. You'd think they'd have done it better to where those that still qualify for the previous can still utilize those funds if they don't qualify for the new one, without going full bore on double dipping both funds. Man, Tesla just pulls 'em out, holy cow.

It was written in part by automaker lobbiests. Not surprising that it hurts the startups.

 

[ridgebackpilot]

Fisker just sent all Ocean reservation holders an offer to convert their reservations into binding orders. You go on their website and sign an order form that makes your existing deposit ($250) nonrefundable.

According to Fisker, they're offering this in an effort to make sure their early adopters can take advantage of the existing tax credit, even for vehicles assembled in Europe and delivered next year.

 

[phil]

So Rivian's "contract" is both binding and cancellable...

Good luck with that. It might work.

 

[dbsb3233]

So Rivian's "contract" is both binding and cancellable...

Good luck with that. It might work.

Fisker too. Interesting assumption for how they expect (hope?) the IRS will interpret and implement "binding contract". Maybe that'll work. Maybe.

What a terrible position to put both buyers and sellers in. Gave everyone maybe 2 weeks to figure out how to react to the blindside. None of this should have taken effect for 2022 (at least).

 

[Travman1974]

Fisker too. Interesting assumption for how they expect (hope?) the IRS will interpret and implement "binding contract". Maybe that'll work. Maybe.

What a terrible position to put both buyers and sellers in. Gave everyone maybe 2 weeks to figure out how to react to the blindside. None of this should have taken effect for 2022 (at least).

I am not a lawyer but a Binding contract is a standard legal term and really only requires,
Offer - You can buy this car for XX amount.
Acceptance - Both parties agree to the offer
Consideration - $250 non refundable deposit.

Also, any contract can be canceled by agreement of both parties.

The only question would be if a VIN would be required when the contract is drawn up.

 

[DadzBoyz]

@Ford Motor Company
An opinion, offering, option on this would be GREATLY appreciated.

You have THOUSANDS of prospective customers that are concerned about this. $7,500 is more than 10% of the MSRP purchase price of a Mustang Mach-E. We/They are worried that we/they may not be able to afford their Ford product if the purchase price suddenly increases 10-15% without this tax credit.

With Ford cutting off all 2022 model year orders early in the year, on April 15, and thousands of those orders potentially not being delivered in the 7.5 months between April 15, 2022 and December 31, 2022, this is a SIGNIFICANT concern. Many of these orders were placed with statements from dealers or Ford content stating a 5-6 month delivery intent.

- Is the “Binding Contract” clause an option that will allow your prospective customers to retain the $7,500 tax credit that they certainly considered (and counted on) when placing orders for your product(s)?
- Are orders placed online “Binding Contracts” according to this clause? If not, will Ford offer an option that WILL make these orders qualify for this clause?
- Are orders at Ford dealerships “Binding Contracts” according to this clause? If yes, what should we ask for as proof of this? If not, will Ford offer an option that WILL make these orders qualify for this clause?

Note: I asked “will” @Ford Motor Company offer an option. I did not ask “can”. If they can, but won’t, “can” is a useless question.

 

[SnBGC]

I am not a lawyer but a Binding contract is a standard legal term and really only requires,
Offer - You can buy this car for XX amount.
Acceptance - Both parties agree to the offer
Consideration - $250 non refundable deposit.

Also, any contract can be canceled by agreement of both parties.

The only question would be if a VIN would be required when the contract is drawn up.

Rivian labeled the document so it would be clear and simple. I showed this to our in-house counsel and they said it appears reasonable and should be accepted by the IRS in the event I end up purchasing the vehicle.

Rivian signed it digitally.
I signed it in ink and notarized it.

Let's see what happens.

 

[Mrn]

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.

 

[SnBGC]

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.

That isn't how it works.
The total income tax liability is reduced by $7500.
Many of us have a total tax liability that is greater than $7500 so we can make full use of the incentive.

 

[RickMachE]

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.

A very common misunderstanding.

 

[Mrn]

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?

 

[dbsb3233]

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?

The current (old) $7500 tax credit is non-refundable. That means you can only subtract the credit from your TOTAL TAX up to the amount of your total TOTAL TAX. If your TOTAL TAX is $9000, you get to use the full $7500 credit. If your TOTAL TAX is $6000, you can only use $6000 of the tax credit. TOTAL TAX is not your balance due. TOTAL TAX is your total tax liability, before counting any tax you're already paid in with paycheck withholding.

The credit in the new law for 2023+ is a refundable tax credit (or can be applied right at purchase). That means it won't matter what your TOTAL TAX is anymore, you get the full credit (assuming your car qualifies, and you don't exceed the income limits).

 

[Deleted member 3569]

To my understanding an online pre-order is not a sale agreement, you will need an actual sales invoice from a dealer with VIN., since Ford cannot sale a car directly to the consumer. I am confused about the 200,000 cap ... it is no longer a requirement during the transition into 2023? So a brand that has exceed 200,000 cap can still be entitled to rebate up to $7.5K against one's tax liability? .... I know that from 2023 forward it will not be a tax rebate but a "cash incentive" from dealer(?).

 

[generaltso]

I know that from 2023 forward it will not be a tax rebate but a "cash incentive" from dealer(?).

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.

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