Federal Tax Credit?

[Bobby]

I will also be getting a BMW i4M50 in addition to my AGT this year.

Will I be able to receive a $15,000 credit as I will now have two vehicles(BEV) delivered in one year

Yes.

 

[Bobby]

From a Reddit post, meaning I haven’t verified it’s real:
“..After December 31, 2021, and before the date of enactment of this Act, purchased, or entered into a written binding contract to purchase, a new qualified plug-in electric drive motor vehicle (as defined in section 30D(d)(1) of the Internal Revenue Code of 1986, as in effect on the day before the date of enactment of this Act), and (2) placed such vehicle in service on or after the date of enactment of this Act, such taxpayer may elect (at such time, and in such form and manner, as the Secretary of the Treasury, or the Secretary’s delegate, may prescribe) to treat such vehicle as having been placed in service on the day before the date of enactment of this Act.”

Sounds like if you’ve ordered it, but receive the car in 2023, it’s treated as this year?

"Placed in service" is the operative phrase here.

 

[TCGT]

Folks here may want to hold off on counting those tax credits...looks like that will have an income limit:

Schumer-Manchin reconciliation bill has $369 billion to fight climate change — here are the details

The Inflation Reduction Act of 2022 provides $369 billion for climate and clean energy programs, the most aggresive climate investment ever taken by Congress.

www.cnbc.com

 

[Shuasha]

"Placed in service" is the operative phrase here.

I would say “or entered into a written, binding contract to purchase” is the operative phrase. It sounds like if you’ve confirmed your order before Jan 1, you’re grandfathered in to the old tax credit.

 

[LCIDdreams]

I would say “or entered into a written, binding contract to purchase” is the operative phrase. It sounds like if you’ve confirmed your order before Jan 1, you’re grandfathered in to the old tax credit.

Agree. Although what specifically happens at order confirmation? I understand that deposit becomes non-refundable but my read is that would not be a “binding contract to purchase” as the purchaser can still chose to cancel. In other words the agreement between Lucid and purchaser gives purchaser the right to cancel and defines cancellation penalty as the forfeit of the deposit. Lucid cannot force the purchaser to go through with the sale (and cannot claim damages due to the purchaser’s cancellation beyond the forfeited deposit) so I would see that as a non-binding agreement.

Based on this I think Lucid would need to receive payment in full by 12/31, not just a non-refundable deposit (or rewrite their order confirmation agreement so purchaser is compelled to go through with the sale).

 

[Bobby]

I would say “or entered into a written, binding contract to purchase” is the operative phrase. It sounds like if you’ve confirmed your order before Jan 1, you’re grandfathered in to the old tax credit.

Then what’s to stop someone (other than honor) from confining multiple orders on vehicles, taking the tax credits, then cancelling the orders?

 

[MPawelek]

Maybe one could used the cagey way sellers on Ebay trim off their percentage due to Ebay by charging lower prices but making it up on shipping charges.

Buy the Air for 50k to get the tax rebate and then pay 100k for delivery….

 

[Shuasha]

Then what’s to stop someone (other than honor) from confining multiple orders on vehicles, taking the tax credits, then cancelling the orders?

Because it only applies if you actually purchase the vehicle?

(l) TRANSITION RULE.—Solely for purposes of the application of section 30D of the Internal Revenue Code of 1986, in the case of a taxpayer that— (1) after December 31, 2021, and before the date of enactment of this Act, purchased, or entered into a written binding contract to purchase, a new qualified plug-in electric drive motor vehicle (as defined in section 30D(d)(1) of the Internal Revenue Code of 1986, as in effect on the day before the date of enactment of this Act), and (2) placed such vehicle in service on or after the date of enactment of this Act, such taxpayer may elect (at such time, and in such form and manner, as the Secretary of the Treasury, or the Secretary’s delegate, may prescribe) to treat such vehicle as having been placed in service on the day before the date of enactment of this Act.

The phrase "date of enactment of this act" is the key phrase. Is that when everything starts on Jan 1, or is that when the bill is signed by the President?

 

[changinator]

Folks here may want to hold off on counting those tax credits...looks like that will have an income limit:

Schumer-Manchin reconciliation bill has $369 billion to fight climate change — here are the details

The Inflation Reduction Act of 2022 provides $369 billion for climate and clean energy programs, the most aggresive climate investment ever taken by Congress.

www.cnbc.com

On top of the income limit, there's a cap on the price of the EV. There is a cap of $55,000 for sedans/cars, and $80,000 for trucks/SUVs/vans. So basically all Lucid Airs would not qualify.

 

[bhramabull]

Not a lawyer or accountant but...
An income cap or MSRP cap would not affect people who have confirmed their order (aka "written binding agreement") before this thing becomes law. Even if you take delivery of the car next year or after this Act becomes law, you will be STILL be eligible for current tax credits (upto $7.5k given you have that much tax liability to begin with). In other words, the Inflation Reduction Act, if signed as is written currently, is NOT RETROACTIVE in nature

 

[Shuasha]

Not a lawyer or accountant but...
An income cap or MSRP cap would not affect people who have confirmed their order (aka "written binding agreement") before this thing becomes law. Even if you take delivery of the car next year or after this Act becomes law, you will be STILL be eligible for current tax credits (upto $7.5k given you have that much tax liability to begin with). In other words, the Inflation Reduction Act, if signed as is written currently, is NOT RETROACTIVE in nature

I did some looking and as it's written, the date that's important for the grandfathering is when the bill is signed by the President, not Jan 1. Let's get going on those Touring confirmations!

 

[bhramabull]

I did some looking and as it's written, the date that's important for the grandfathering is when the bill is signed by the President, not Jan 1. Let's get going on those Touring confirmations!

Exactly why I stated "when this Act becomes Law", meaning regardless of whether Biden signs it today, late this year, next year. Although some people say they should keep it simple and have it take effect Jan 1, 2023

 

[LCIDdreams]

Not a lawyer or accountant but...
An income cap or MSRP cap would not affect people who have confirmed their order (aka "written binding agreement") before this thing becomes law. Even if you take delivery of the car next year or after this Act becomes law, you will be STILL be eligible for current tax credits (upto $7.5k given you have that much tax liability to begin with). In other words, the Inflation Reduction Act, if signed as is written currently, is NOT RETROACTIVE in nature

I hope you are right (per my above post, given order confirmation has an “out” for the purchaser I’m not positive it qualifies). If it does I hope Lucid offers my Pure order confirmation before that point (not holding up much hope though).

 

[joec]

Exactly why I stated "when this Act becomes Law", meaning regardless of whether Biden signs it today, late this year, next year. Although some people say they should keep it simple and have it take effect Jan 1, 2023

Seems like a bad idea, given the upcoming midterm elections, that Democrats would want to take away a tax credit many upper-middle class suburban voters were planning on taking this year. But Democrats doing a dumb thing in an election year isn't exactly uncommon.

 

[Shuasha]

Seems like a bad idea, given the upcoming midterm elections, that Democrats would want to take away a tax credit many upper-middle class suburban voters were planning on taking this year. But Democrats doing a dumb thing in an election year isn't exactly uncommon.

True, but also keep in mind this bill may change many times before it's actually passed.

 

[hydbob]

True, but also keep in mind this bill may change many times before it's actually passed.

It'll end up being $750 off any car under 15k

 

[bhramabull]

I hope you are right (per my above post, given order confirmation has an “out” for the purchaser I’m not positive it qualifies). If it does I hope Lucid offers my Pure order confirmation before that point (not holding up much hope though).

The reason I think Order confirmation qualifies is because if you do not go through with the purchase, you lose on the $1,000. It's called the 'Order Agreement" per the PDF you get in an email when you confirm the order. In fact the first point under the T&Cs is about Agreement to Purchase

 

[AIR.LUCID]

If it is true that in order to get the $7,500 tax credit, the deposit has to be at least 5% of the purchase price, can I just wire Lucid another $5,000?

 

[hydbob]

You guys must be really bored to keep arguing about something no one can give an answer about until the IRS says what it wants to do, but carry on

 

[AIR.LUCID]

You guys must be really bored to keep arguing about something no one can give an answer about until the IRS says what it wants to do, but carry on

https://home.treasury.gov/news/press-releases/jy0923