Official IRS Guidance on Tax Credit Until 1/1/23

[Sam2084]

Looks like Mach Es are in the clear to get the $7500 like many of us thought.

https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d

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[Atxsw]

Seems like basically what everyone expected

 

[pcpacker]

Transition Rule for Vehicles Purchased before August 16, 2022
If you entered into a written binding contract to purchase a new qualifying electric vehicle before August 16, 2022, but do not take possession of the vehicle until on or after August 16, 2022 (for example, because the vehicle has not been delivered), you may claim the EV credit based on the rules that were in effect before August 16, 2022. The final assembly requirement does not apply before August 16, 2022.

Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022
If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold). If you entered into a written binding contract to purchase a new qualifying vehicle before August 16, 2022, see the rule above.



This doesn’t specifically say that the income limits don’t take affect until 2023 but I guess that part that says “aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply” makes me believe that is true. I might just squeak by.

 

[Mach1E]

Seems like basically what everyone expected

Nope.

Not what Rivian expected.

Written binding contract requires at least a 5% nonrefundable deposit.

Oopsie.

 

[Atxsw]

Nope.

Not what Rivian expected.

Written binding contract requires at least a 5% nonrefundable deposit.

Oopsie.

Not a lawyer, but it says significant but gives an example that 5% would be enough but doesn't specify the actual limit. It does say it has to be a deposit and not a clause that someone would have to pay a certain % of the price.

 

[Mach1E]

Not a lawyer, but it says significant but gives an example that 5% would be enough but doesn't specify the actual limit. It does say it has to be a deposit and not a clause that someone would have to pay a certain % of the price.

It says more than that.

Specifically: “ For tax purposes in general, a contract provision that limits damages to an amount equal to at least 5 percent of the total contract price is not treated as limiting damages to a specified amount.”

5% seems the minimum, but it will vary state by state. The words “at LEAST 5%” are important.

Either way, $100 or $1000 isn’t remotely close.

 

[West1134]

Looks like Mach Es are in the clear to get the $7500 like many of us thought.

https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d

Thanks for sharing! Just reading this for the first time (been a long day at work) and happy to see the 2022 I have (EDIT taken over from someone who walked away from their order- slated to arrive early October - will still apply. With the $10k ADM (since this was a walk away order ADM was applied) without tax credit I was gonna release it. However, now that the credit looks to still apply I'm still considering taking delivery. Figure the tax credit will wipe out most of the ADM, then with prices expected to go up (~$5k/vehicle) for a 2023 order, I'll still squeak out ahead financially vs just waiting to order a 2023. Still debating though because well... F the dealers charging that much over because they can...then again, I can't find a MME available otherwise. Strange times.

 

[Atxsw]

It says more than that.

Specifically: “ For tax purposes in general, a contract provision that limits damages to an amount equal to at least 5 percent of the total contract price is not treated as limiting damages to a specified amount.”

5% seems the minimum, but it will vary state by state. The words “at LEAST 5%” are important.

Either way, $100 or $1000 isn’t remotely close.

Good point, although it would have been nice for them to actually publish this before the law took effect for folks.

 

[Mach1E]

Good point, although it would have been nice for them to actually publish this before the law took effect for folks.

Would be nice but that will never happen.

No point in the IRS posting guidance on “bills.” Until it is law, it doesn’t matter. Bills change and get killed last minute all the time.

Plus, especially with tax law changes, they really don’t want you to be able to skirt the new rules ahead of the change.

That would completely negate the purpose of the change. “The government” likes the new law better than the old one. That’s why they changed it.

 

[xaudiblex]

It says more than that.

Specifically: “ For tax purposes in general, a contract provision that limits damages to an amount equal to at least 5 percent of the total contract price is not treated as limiting damages to a specified amount.”

5% seems the minimum, but it will vary state by state. The words “at LEAST 5%” are important.

Either way, $100 or $1000 isn’t remotely close.

The sentences before the example are very important.

"the enforceability of a contract under State law is a facts-and-circumstances determination to be made under relevant State law"

They are giving the lawyerly answer... "It depends" on relevant state law.

 

[opbarnes]

This doesn’t specifically say that the income limits don’t take affect until 2023 but I guess that part that says “aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply” makes me believe that is true. I might just squeak by.

I hope the income limits don’t take effect in 2022. I already have my Mach-E (since March 2021), but I have an order placed for the Lincoln Aviator PHEV.

 

[Spectre]

Thanks for sharing! Just reading this for the first time (been a long day at work) and happy to see the 2022 I have reserved - slated to arrive early October - will still apply. With the $10k ADM without tax credit I was gonna release it. However, now that the credit looks to still apply I'm still considering taking delivery. Figure the tax credit will wipe out most of the ADM, then with prices expected to go up (~$5k/vehicle) for a 2023 order, I'll still squeak out ahead financially vs just waiting to order a 2023. Still debating though because well... F the dealers charging that much over because they can...then again, I can't find a MME available otherwise. Strange times.

I’m confused, if you have a reservation, why are you paying ADM? Do you just have a terrible dealer? You should be paying MSRP

 

[Spectre]

I hope the income limits don’t take effect in 2022. I already have my Mach-E (since March 2021), but I have an order placed for the Lincoln Aviator PHEV.

They won’t. The bill text specifically says income limits don’t start until after 12/31/22

 

[West1134]

I’m confused, if you have a reservation, why are you paying ADM? Do you just have a terrible dealer? You should be paying MSRP

Good question, didn’t word that correctly. I was on a waiting list for a MME reservation if someone walked away from it. Someone did and I “took over” their reservation, put down deposit etc but had to agree to ADM or they would go to the next person on the list.

 

[opbarnes]

I’m confused, if you have a reservation, why are you paying ADM? Do you just have a terrible dealer? You should be paying MSRP

Eff The dealers indeed. Farley warned dealers not to do this. I’m not sure if he’s still doing anything about these things anymore, but try tweeting Mike Levine about the ADM. He’s previously helped others.

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