7500 EV tax credit update with new bill

[gunick06]

A simple 'it's answered above' would have been sufficient. I didn't realize that you or anyone else had already addressed the question of the delivery date and lack of an end date in the guidelines previously. I'll refrain from asking for additional information. I'll just look through every post on the forum to try to find the answers

I have not yet discovered the answer to this question, and I'm trying to remain optimistic, but my SA told me within the last few days that "all vehicles delivered before the end of this year qualify for it regardless of pricing. Going into next year, it’s best for to work with your tax advisor to navigate because the IRS keeps changing things." Sounds ominous.

However, in the same email they also said "Considering we’ve now been able to confirm your order and steadily ramping up production, I have a strong feeling we’ll get you your vehicle before the end of the year." However, I'm still waiting on the DA email and I've seen that others who have been contacted by a DA were provided with a 1-3 month time frame. The SA is correct about the ramp-up though; you can see the production time for the Grand Tourings have gone down exponentially. Ideally we get a much better picture from the November 15th event, but that's still a tight time frame.

(SA = Sales/Store Advisor & DA = Delivery Advisor)

 

[gunick06]

Upon further review, for those of you like me who are new to this debate, the question is whether what Lucid did for Touring reservation holders is sufficient in the eyes of the IRS. I suspect it never was, and it’s unfortunate Lucid did not know better at the time they asked everyone to make their deposits non-refundable.

The Treasury Notice is plain and simple, and just says you need to have entered into a contract before the date the new regulations went into effect: https://home.treasury.gov/news/press-releases/jy0923

However, if you click the additional guidance they provide, it explains that the real question is whether the contract is enforceable under your state’s laws. Simply having a non-refundable deposit is provided as an example of something that does not count.

 

[AIR.LUCID]

Ok.

Upon further review, for those of you like me who are new to this debate, the question is whether what Lucid did for Touring reservation holders is sufficient in the eyes of the IRS. I suspect it never was, and it’s unfortunate Lucid did not know better at the time they asked everyone to make their deposits non-refundable.

The Treasury Notice is plain and simple, and just says you need to have entered into a contract before the date the new regulations went into effect: https://home.treasury.gov/news/press-releases/jy0923

However, if you click the additional guidance they provide, it explains that the real question is whether the contract is enforceable under your state’s laws. Simply having a non-refundable deposit is provided as an example of something that does not count.

So is that for your state in particular?

 

[yiling1990]

However, if you click the additional guidance they provide, it explains that the real question is whether the contract is enforceable under your state’s laws. Simply having a non-refundable deposit is provided as an example of something that does not count.

Where does it say that just having a non-refundable deposit does not count?

 

[Volund]

Where does it say that just having a non-refundable deposit does not count?

Yeah, I don't see any source of proof of this either

 

[gunick06]

Yeah, I don't see any source of proof of this either

The first link I posted says: “Individuals who 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), can claim the EV credit based on the rules that were in effect before the Inflation Reduction Act’s enactment.”

There’s a link in that page to here: https://www.irs.gov/credits-deductions/individuals/plug-in-electric-drive-vehicle-credit-section-30d

The proof is there (copied below). The contract with Lucid is virtually non-existent. At the time we entered into the agreement, the only thing that was clear is that we clearly agreed to “forfeiture of a deposit.” It reads like the prime example of an unenforceable contract according to the IRS, and therefore not sufficient under the transition rules to qualify for a rebate.

What Is a Written Binding Contract?​

In general, a written contract is binding if it is enforceable under State law and does not limit damages to a specified amount (for example, by use of a liquidated damages provision or the forfeiture of a deposit).

 

[DJL]

The first link I posted says: “Individuals who 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), can claim the EV credit based on the rules that were in effect before the Inflation Reduction Act’s enactment.”

There’s a link in that page to here: https://www.irs.gov/credits-deductions/individuals/plug-in-electric-drive-vehicle-credit-section-30d

The proof is there (copied below). The contract with Lucid is virtually non-existent. At the time we entered into the agreement, the only thing that was clear is that we clearly agreed to “forfeiture of a deposit.” It reads like the prime example of an unenforceable contract according to the IRS, and therefore not sufficient under the transition rules to qualify for a rebate.

What Is a Written Binding Contract?​

In general, a written contract is binding if it is enforceable under State law and does not limit damages to a specified amount (for example, by use of a liquidated damages provision or the forfeiture of a deposit).

Here is what I wrote on this topic a few months ago. https://lucidowners.com/threads/7500-ev-tax-credit-update-with-new-bill.2120/post-62522

 

[gunick06]

Here is what I wrote on this topic a few months ago. https://lucidowners.com/threads/7500-ev-tax-credit-update-with-new-bill.2120/post-62522

Okay, thanks for linking that. That makes sense.

Effectively, there are currently two avenues for the $7500 refund under the old rules, and the one avenue Lucid told everyone to walk down was simply never available. That’s kinda f****d.

 

[Halodde]

Here is what I wrote on this topic a few months ago. https://lucidowners.com/threads/7500-ev-tax-credit-update-with-new-bill.2120/post-62522

Huh... A link. What a great idea. Wasn't that easier than being so cranky when I asked a similar question on this topic previously? It took you longer to type your snide response to my simple question than it would have taken to post a link

 

[DJL]

Huh... A link. What a great idea. Wasn't that easier than being so cranky when I asked a similar question on this topic previously? It took you longer to type your snide response to my simple question than it would have taken to post a link

Look it. I was tired that night and said so and tried to be nice about. After your snotty comment a few days ago, I decided to spend some time today to look for it. Something you should have done. It took me about 30 minutes to find it and post it. Instead of being grateful or appreciative , you decided to post your above comment. It just goes to show that no good deed goes unpunished. Just FYI, I decided to block you going forward just to avoid have any further contact with you.

 

[hydbob]

It would be awful if I have to lock this thread. Please refrain from commenting about this situation any further. Thank you for your cooperation!

 

[AIR.LUCID]

I am glad that rather than complain that we may NEVER know whether we will get a tax credit like some, we can have this thread.

 

[ikonos]

In addition to timing, is there any income limit to qualify for the rebate?

 

[changinator]

In addition to timing, is there any income limit to qualify for the rebate?

no because if you qualify for the transition rule, which gives you the old ev tax credits, the old ex tax credit eligibility applies, which doesn't have any income limits

 

[AIR.LUCID]

No,. The liquidated damages clause is in my confirmation purchase agreement. It is in Aricle 3, which is entitled: "Order Process - Cancellation" My deposit of $1,000 is only 0.07% of the contracted amount and, as such, does not meet the IRS' safe harbor value of 5% inorder to meet their definition of a "binding written contract". See my posting at: https://lucidowners.com/threads/7500-ev-tax-credit-update-with-new-bill.2120/page-21#post-56321 for more info.

FYI, In order to ensure my tax credit, I asked Lucid sales if I could increase my deposit to 5%. In case what you say is true. They said I could not until I placed the order. I replied that I had ordered in order to get the tax credit, and they said that I hadn’t actually ordered, but took the step to lock in the tax credit. When I am asked to order next year, I can increase my deposit then. Strange.

 

[HariK]

It would be awful if I have to lock this thread. Please refrain from commenting about this situation any further. Thank you for your cooperation!

In my opinion this topic has been beaten to death.

 

[DJL]

In my opinion this topic has been beaten to death.

Agreed! If people are still confused or don't wish to trust the opinions that have been posted here or on the IRS' website, they should just contact a CPA or tax attorney. It is a conplex and confusing issue with so many variables that have an impact.

 

[AIR.LUCID]

In my opinion this topic has been beaten to death.

Then leave the thread.

 

[HariK]

Then leave the thread.

Yes sir! Will do. See you on other threads.

 

[gunick06]

FYI, In order to ensure my tax credit, I asked Lucid sales if I could increase my deposit to 5%. In case what you say is true. They said I could not until I placed the order. I replied that I had ordered in order to get the tax credit, and they said that I hadn’t actually ordered, but took the step to lock in the tax credit. When I am asked to order next year, I can increase my deposit then. Strange.

Even if you increased your deposit now, it would not retroactively make your prior contract binding in the eyes of the IRS. If you don’t take delivery this year it’s probably the end of the line, so fingers crossed for some good news tomorrow.