7500 EV tax credit update with new bill

[BeachFred]

As an FYI, I ended up leasing my Air GT and received a full $7500 tax credit allowance in my lease payment computation (through Lucid Financial/BOA). So that eliiminates any mystery around the value of the tax credit and as I look at it, I get optionality after three years if either the car or Lucid (the company) aren’t performing as well as hoped.

 

[idiot900]

Against the government? That would have to be under the takings clause. Good luck with that one.

Had to look that up and still not sure how it applies, but I appreciate the correction

 

[gunick06]

Had to look that up and still not sure how it applies, but I appreciate the correction

Haha. Hope that didn’t come off as being rude.

The Takings Clause comes from the 5th amendment and it’s basically whenever the government takes something from you without compensating you for it. It doesn’t really apply here, so your only redress is the ballot box.

 

[idiot900]

Haha. Hope that didn’t come off as being rude.

The Takings Clause comes from the 5th amendment and it’s basically whenever the government takes something from you without compensating you for it. It doesn’t really apply here, so your only redress is the ballot box.

Not rude at all! One of the nice things about this forum is peoples‘ complementary knowledge, perspectives, and the climate of constructive communication.

 

[AlignTrex]

I've received the vin, signed the purchase agreement, and will be making the full payment before the end of the year even though I have not taken delivery of the car yet. Waiting for the car to pass inspections so I can take delivery. Still waiting... If I ended up taking delivery next year, anyone know the chances of getting the $7500 tax credit with the above conditions I mentioned?

 

[gunick06]

I've received the vin, signed the purchase agreement, and will be making the full payment before the end of the year even though I have not taken delivery of the car yet. Waiting for the car to pass inspections so I can take delivery. Still waiting... If I ended up taking delivery next year, anyone know the chances of getting the $7500 tax credit with the above conditions I mentioned?

Nope. That’s pretty much the gist of the debate in this forum.

 

[noobzilla]

I've received the vin, signed the purchase agreement, and will be making the full payment before the end of the year even though I have not taken delivery of the car yet. Waiting for the car to pass inspections so I can take delivery. Still waiting... If I ended up taking delivery next year, anyone know the chances of getting the $7500 tax credit with the above conditions I mentioned?

Not a lawyer here but I don't think paying for the car now would make any difference. If paid prior to the signing of the EV bill then yes, but we are past that. Placed in Service is the date the car is delivered.

 

[Babyrocko1908]

Not a lawyer here but I don't think paying for the car now would make any difference. If paid prior to the signing of the EV bill then yes, but we are past that. Placed in Service is the date the car is delivered.

But the actual language in the bill under the transition rule allows those of us who had a binding contract prior to the passage of the IRA to elect to have our placed in service date be the day before the IRA passed which is August 15, 2022.

 

[AlignTrex]

This is from the IRS website. Not sure if posted here before. Bottom line is you need to take delivery before the end of the year to qualify assuming you entered into a biding contract already before the new law was passed.

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.

 

[Tim-in-CA]

This is from the IRS website. Not sure if posted here before. Bottom line is you need to take delivery before the end of the year to qualify assuming you entered into a biding contract already before the new law was passed.

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.

Do we know how the IRS is validating this? Are they linked to DMV registrations to confirm? Or is this something to be concerned about if you are audited? I too like @AlignTrex plan on paying for my vehicle in full if I haven't taken delivery before 12-31 ... although I'm still hopeful that it will come. I also did execute the so called binding contract before Aug 16th, so I have that to fall back on. The entire IRA has been a cluster and in true fashion, the govt/IRS was not clear on all he rules.

 

[gunick06]

This is from the IRS website. Not sure if posted here before. Bottom line is you need to take delivery before the end of the year to qualify assuming you entered into a biding contract already before the new law was passed.

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 has been posted several times and heavily debated. Those are two separate options. The first option requires a binding contract and there’s a separate rule saying that generally means 5% down. The second option is delivery in 2022 and everyone agrees on the interpretation of that one (including Lucid).

 

[gunick06]

Do we know how the IRS is validating this? Are they linked to DMV registrations to confirm? Or is this something to be concerned about if you are audited? I too like @AlignTrex plan on paying for my vehicle in full if I haven't taken delivery before 12-31 ... although I'm still hopeful that it will come. I also did execute the so called binding contract before Aug 16th, so I have that to fall back on. The entire IRA has been a cluster and in true fashion, the govt/IRS was not clear on all he rules.

The official answer is to talk to your tax consultant because yes, there’s a risk you will be audited.

 

[CrewChief]

But the actual language in the bill under the transition rule allows those of us who had a binding contract prior to the passage of the IRA to elect to have our placed in service date be the day before the IRA passed which is August 15, 2022.

I agree with you! I’m not a lawyer or CPA but I can’t see how the ACTUAL LANGUAGE in the IRA can be interpreted any other way.

 

[gunick06]

I agree with you! I’m not a lawyer or CPA but I can’t see how the ACTUAL LANGUAGE in the IRA can be interpreted any other way.

Others in this forum beg to differ. Haha.

Separately, I am a lawyer, so EVERYTHING is up to interpretation in my mind.

 

[noobzilla]

But the actual language in the bill under the transition rule allows those of us who had a binding contract prior to the passage of the IRA to elect to have our placed in service date be the day before the IRA passed which is August 15, 2022.

He did not specify or ask about confirmation prior to new EV passage so I assumed full new purchase.

 

[noobzilla]

We are going in circles here again, but no, to answer the question,

I've received the vin, signed the purchase agreement, and will be making the full payment before the end of the year even though I have not taken delivery of the car yet. Waiting for the car to pass inspections so I can take delivery. Still waiting... If I ended up taking delivery next year, anyone know the chances of getting the $7500 tax credit with the above conditions I mentioned?

full payment now will not do or add anything new to what's already being discussed.

 

[CrewChief]

Others in this forum beg to differ. Haha.

Separately, I am a lawyer, so EVERYTHING is up to interpretation in my mind.

Point well taken!!!

 

[AlignTrex]

This has been posted several times and heavily debated. Those are two separate options. The first option requires a binding contract and there’s a separate rule saying that generally means 5% down. The second option is delivery in 2022 and everyone agrees on the interpretation of that one (including Lucid).

The IRS website is pretty clear. 5% down payment OR a non-refundable deposit. Either way, time will tell.

 

[noobzilla]

I agree with you! I’m not a lawyer or CPA but I can’t see how the ACTUAL LANGUAGE in the IRA can be interpreted any other way.

Others in this forum beg to differ. Haha.

Separately, I am a lawyer, so EVERYTHING is up to interpretation in my mind.

Icing on cake, even the same lawyer can have different ways to interpret the same law. Lawyer have various skills and tool sets to manipulate evidence to fit what they want.

 

[joec]

The IRS website is pretty clear. 5% down payment OR a non-refundable deposit. Either way, time will tell.

Down payment or non-refundable deposit.

Either one being 5%.

Why would a down payment need to be 5%, but a deposit could be $1? Does that make any sense to you?