EV Tax credit question

[NewEnglander]

Folks this may have been discussed before but I could not find any thread and the tax experts in this community may know this. Does IRA allow 2 EV tax credits to be claimed in a year, ofcourse for 2 different vehicles. Or is there any limitation on how often you can claim. Thanks in advance!

 

[Bobby]

You may claim multiple tax credits each year, but the criteria for which vehicle type you may claim has gotten significantly narrower.

 

[NewEnglander]

Thanks Bobby. Yes, i am aware of the new criteria.

 

[des16]

I am curious if anyone has successfully submitted an amended 2022 tax return for the tax credit based on the letter that Lucid sent out before the deadline for the IRA last fall, and whether the IRS agreed to honor that letter as a binding order/sale.

 

[kurious]

I did read an IRS memo saying if your down payment was <5% of the contract value then it's not qualified.
I committed my $300 deposit on my $84,980 vehicle price, so definitely fails the binding order threshold.

 

[EZEVDriver]

I did read an IRS memo saying if your down payment was <5% of the contract value then it's not qualified.
I committed my $300 deposit on my $84,980 vehicle price, so definitely fails the binding order threshold.

Do you have a link to the IRS memo?

 

[kurious]

https://www.irs.gov/credits-deductions/credits-for-new-electric-vehicles-purchased-in-2022-or-before
I'm not willing to assert my $300 "non-refundable" deposit constituted a written binding contract that meant my purchase date was in Aug 2022 so the old rules should apply. My "placed in service" date is July 15, 2023. I'll run it all past my tax expert at some point but I'm not expecting to be eligible to claim the credit. Also I bought the car as a personal asset not a business, that matters.

What is a written binding contract?​

In general, a written binding contract :

• is enforceable under state law, based on the state and relevant facts and circumstances, and
• does not limit the damages a buyer or seller can receive for a breached contract, such as forfeiting a deposit or paying a pre-determined dollar amount or a percentage of the total contract price for the vehicle.

An indication of a binding contract is if a buyer has made a significant non-refundable deposit or down payment.

 

[Babyrocko1908]

https://www.irs.gov/credits-deductions/credits-for-new-electric-vehicles-purchased-in-2022-or-before
I'm not willing to assert my $300 "non-refundable" deposit constituted a written binding contract that meant my purchase date was in Aug 2022 so the old rules should apply. My "placed in service" date is July 15, 2023. I'll run it all past my tax expert at some point but I'm not expecting to be eligible to claim the credit. Also I bought the car as a personal asset not a business, that matters.

What is a written binding contract?​

In general, a written binding contract :

• is enforceable under state law, based on the state and relevant facts and circumstances, and
• does not limit the damages a buyer or seller can receive for a breached contract, such as forfeiting a deposit or paying a pre-determined dollar amount or a percentage of the total contract price for the vehicle.

An indication of a binding contract is if a buyer has made a significant non-refundable deposit or down payment.

You're eligible for the credit as long as you had that written and binding contract prior to the passage of the IRA whether your deposit was $300 or $1,000 or the delivery date. The language in the actual law (transition rule) is clear on this. Check out how I break this down in the older threads on this topic.

Do a search here with the term "transition rule." That should help you.

 

[EZEVDriver]

I checked the instructions about the transition rule on the IRS site, then used tax software that asked principally for the VIN number, submitted my 2022 amended return and ~four months later received my refund. Not an accountant or attorney. YMMV.

 

[Bobby]

I checked the instructions about the transition rule on the IRS site, then used tax software that asked principally for the VIN number, submitted my 2022 amended return and ~four months later received my refund. Not an accountant or attorney. YMMV.

Taxes are on the honor code. The IRS does not check your return for legality or accuracy unless you are audited. Just because it went through does not mean you did it right… or wrong.

 

[hmp10]

I have a question from a friend who bought a Bolt EUV last year. IRS regs say that in order for the buyer to receive the tax credit, the dealer must report the sale to the IRS:

Clean vehicle credit seller or dealer requirements | Internal Revenue Service

Sellers of eligible electric vehicles can help their customers take advantage of clean vehicle credits by registering with the IRS and meeting reporting requirements.

www.irs.gov

His Chevrolet dealer has not filed a report of the sale and claims he is under no obligation to do so and that it is the buyer's responsibility.

Questions to Lucid owners who received a tax credit for their Lucid: do you know if Lucid reported the sale to the IRS, and did Lucid ask you for your tax ID (or SSN) at time of purchase in order to file such a report? (I received the tax credit for my Lucid purchase but cannot remember if I had to provide my tax identification to Lucid.)

 

[Babyrocko1908]

I have a question from a friend who bought a Bolt EUV last year. IRS regs say that in order for the buyer to receive the tax credit, the dealer must report the sale to the IRS:

Clean vehicle credit seller or dealer requirements | Internal Revenue Service

Sellers of eligible electric vehicles can help their customers take advantage of clean vehicle credits by registering with the IRS and meeting reporting requirements.

www.irs.gov

His Chevrolet dealer has not filed a report of the sale and claims he is under no obligation to do so and that it is the buyer's responsibility.

Questions to Lucid owners who received a tax credit for their Lucid: do you know if Lucid reported the sale to the IRS, and did Lucid ask you for your tax ID (or SSN) at time of purchase in order to file such a report? (I received the tax credit for my Lucid purchase but cannot remember if I had to provide my tax identification to Lucid.)

Going strictly from memory but I thought the requirement for the dealer to notify the IRS started with 2024 models because the credit is applied at the point of sale. The 2023 model year allowed the buyer to claim credit on their tax 2023 tax return.

 

[hmp10]

Going strictly from memory but I thought the requirement for the dealer to notify the IRS started with 2024 models because the credit is applied at the point of sale. The 2023 model year allowed the buyer to claim credit on their tax 2023 tax return.

Thanks. I checked this out. Unfortunately, the switchover to the seller reporting requirement started with 2023 purchases:

Credits for new clean vehicles purchased in 2023 or after | Internal Revenue Service

You may qualify for a clean vehicle tax credit up to $7,500 if you buy a new, qualified plug-in electric vehicle or fuel cell electric vehicle.

www.irs.gov

 

[Babyrocko1908]

Thanks. I checked this out. Unfortunately, the switchover to the seller reporting requirement started with 2023 purchases:

Credits for new clean vehicles purchased in 2023 or after | Internal Revenue Service

You may qualify for a clean vehicle tax credit up to $7,500 if you buy a new, qualified plug-in electric vehicle or fuel cell electric vehicle.

www.irs.gov

Did your friend get his tax credit at the point of sale? If not, then they should be able to claim it on their 2023 taxes.