[URGENT] $7500 credit for current reservation holders

[mnat]

Can someone with tax expertise confirm that I'll need to owe the gov't at least $7500 after calculating my tax return in order to receive the full 2022 EV incentive (assuming Aug confirmed order & delivery before Jan)?

Last year I didn't owe on my taxes due to my level of withholding so I believe if this was the case again this year I wouldn't get anything back, but wanted to double check.

It’s about your total tax liability for the year, not how much you owe after deducting your witholdings for the year. Even if you withheld more than what you owed, as long as you owed more than $7500 you could claim the full rebate.

 

[ikonos]

Can someone with tax expertise confirm that I'll need to owe the gov't at least $7500 after calculating my tax return in order to receive the full 2022 EV incentive (assuming Aug confirmed order & delivery before Jan)?

Last year I didn't owe on my taxes due to my level of withholding so I believe if this was the case again this year I wouldn't get anything back, but wanted to double check.

Even if you did not have to pay anything when you filed your tax return because enough taxes were already withheld, you still paid federal taxes (part of the taxes withheld). If that amount is over zero, you can claim the credit and receive a refund up to $7500.

 

[noobzilla]

Agree with posts above. I you already paid $3000 fed income tax and you owe $0 when filing, then you will get refunded $3000. You will not get the remaining $4500. In my case I have $1600 withholding and will owe $5000 from capital gains this year. I will owe them $0 and get $1600 refund but miss out on the remaining $900 EV credit.

 

[lsbuffs]

I get the impression it's more of a stretch for me to buy my Lucid than many others on the forum. So many comments about consulting your CPA or tax advisor. I'm probably in the minority being a self-filer/Turbo Tax guy. Pretty sure once the final guidance is issued I'll be able to figure it out on my own.

 

[SCOOTERSD]

I get the impression it's more of a stretch for me to buy my Lucid than many others on the forum. So many comments about consulting your CPA or tax advisor. I'm probably in the minority being a self-filer/Turbo Tax guy. Pretty sure once the final guidance is issued I'll be able to figure it out on my ow

I am also a self filer and turbo tax guy but my next door neighbor is a CPA and has been advising me on this purchase. As mnat above stated, the credit is on your total tax liability it does not matter whether you owe anything at the end of year…..

 

[Adnillien]

I get the impression it's more of a stretch for me to buy my Lucid than many others on the forum. So many comments about consulting your CPA or tax advisor. I'm probably in the minority being a self-filer/Turbo Tax guy. Pretty sure once the final guidance is issued I'll be able to figure it out on my own.

There are many owners and reservations holders here that are similar to you.

 

[noobzilla]

@lsbuffs self filer here. Also a stretch for me too if you check my posts in the new member section (pretty much like a blog at this point). Ive been back and forth about the purchase and not being sure about the EV credit so I purchased a 2022 Tax and filled as much as I can estimate to get an idea if I would even get the credit. The credit is a big factor for me. I'm glad I did check and it turns out I will be getting most of it so pulled the trigger on the car. Had to be a bit more realistic with my finance so I'm getting a Pure instead of a Touring but even then a Pure is a bit much. Could be my last car, whichever gives out first haha

 

[eherlihy1]

There is just a month for those hoping for delivery until all of this becomes mute as the IRA details will completely exclude any Air in service after 1/1/2023. This if directly from the law that was passed:

Part 4--Clean Vehicles
(Sec. 13401) The act modifies requirements for the refundable income tax credit for qualifying plug-in electric vehicles. The modified credit is $3,750 for any vehicle meeting certain critical minerals requirements and $3,750 for vehicles meeting certain battery component requirements. The maximum allowable credit remains $7,500 per vehicle. Vehicles eligible for the credit include those made by qualified U.S. manufacturers and excludes those manufactured or assembled by a hostile foreign entity.

The credit is not available to taxpayers whose modified adjusted gross income exceeds $150,000 ($300,000 for married couples filing jointly) The credit is not allowed for vehicles that have a manufacturer's suggested retail price in excess of $80,000 for vans, sport utility vehicles (SUVs), or pickup trucks, and $55,000 for other vehicles.

https://www.congress.gov/bill/117th-congress/house-bill/5376

To net it out, if I am understanding this thread correctly;

1. the $300 deposit which converted your reservation to a binding order is non-refundable.
2. unless you take delivery of the Lucid Air that you reserved prior to August 12 in CY 2022, you don't get a $7500 EV Tax Credit.

If these two points are correct I will likely have to walk away from my $300 deposit.

IIRCC, the Air Pure was initially stated to have 480HP. This statement changed to the dual motor Air Pure would have 480HP, and no statement as to what the RWD Pure will have.

 

[CapHillDC]

I get the impression it's more of a stretch for me to buy my Lucid than many others on the forum. So many comments about consulting your CPA or tax advisor. I'm probably in the minority being a self-filer/Turbo Tax guy. Pretty sure once the final guidance is issued I'll be able to figure it out on my own.

I'm a CPA, but I still use TurboTax and have for 20 years. Fortunately, I'm not in public accounting anymore so I don't have to work on anyone else's taxes.

 

[gunick06]

To net it out, if I am understanding this thread correctly;

1. the $300 deposit which converted your reservation to a binding order is non-refundable.
2. unless you take delivery of the Lucid Air that you reserved prior to August 12 in CY 2022, you don't get a $7500 EV Tax Credit.

If these two points are correct I will likely have to walk away from my $300 deposit.

IIRCC, the Air Pure was initially stated to have 480HP. This statement changed to the dual motor Air Pure would have 480HP, and no statement as to what the RWD Pure will have.

Regarding point 1, it doesn’t hurt to ask Lucid for a refund.

Regarding point 2, this is the subject of much debate on the other tax thread: https://lucidowners.com/threads/7500-ev-tax-credit-update-with-new-bill.2120/page-27

I think your assessment is correct but many others will disagree. If you ask Lucid, they will confirm 2022 delivery counts under the transition rules but tell you to talk to a tax professional if you take delivery in 2023.

 

[eherlihy1]

This is the subject of much debate on the other tax thread: https://lucidowners.com/threads/7500-ev-tax-credit-update-with-new-bill.2120/page-27

I think your assessment is correct but many others will disagree. If you ask Lucid, they will confirm 2022 delivery counts under the transition rules but tell you to talk to a tax professional if you take delivery in 2023.

Thanks for the confirmation.

For now, I'll keep the reservation. Who knows, I may win PowerBall (gotta' start buying tickets first). But for me, right now, $83K+ is too much for a car. I don't lease cars, I don't trade cars in at the dealer, and I don't take out loans. It seems that a lot of people here are fiscally creative. They seem to flip cars after a year or two, and then move onto something new. When I buy a vehicle, I pay cash, I maintain it well (myself if at all possible) and I drive it until it dies, or until I sell it privately. My 21 year-old Toyota is still running like new, and I know how to maintain it. I seriously doubt that owners will be able to do any maintenance to the Lucid, other than washing and waxing.

 

[mallig]

Even if you did not have to pay anything when you filed your tax return because enough taxes were already withheld, you still paid federal taxes (part of the taxes withheld). If that amount is over zero, you can claim the credit and receive a refund up to $7500.

the $7,500 is NOT a refund. It is a credit against INCOME - taxes are computed on Adjusted Net. SO - if you owed nothing and successfully claimed the $7500 credit you get NOTHING.

 

[ikonos]

the $7,500 is NOT a refund. It is a credit against INCOME - taxes are computed on Adjusted Net. SO - if you owed nothing and successfully claimed the $7500 credit you get NOTHING.

I hear you. You probably over looked the part "if that amount is over zero, you can claim the credit and receive a refund up to $7500." It will be a refund since the poster in question already paid the taxes through withholding.

 

[HariK]

Agree with posts above. I you already paid $3000 fed income tax and you owe $0 when filing, then you will get refunded $3000. You will not get the remaining $4500. In my case I have $1600 withholding and will owe $5000 from capital gains this year. I will owe them $0 and get $1600 refund but miss out on the remaining $900 EV credit.

If you have a retirement account consider a withdrawal even if you pay penalty on early withdrawal and collect 7.5k tax credit.

 

[noobzilla]

If you have a retirement account consider a withdrawal even if you pay penalty on early withdrawal and collect 7.5k tax credit.

I'm considering buying stocks from relatives lol aka "gift" me stocks and I give them cash. I'd take the hit on capital gains

 

[mallig]

I hear you. You probably over looked the part "if that amount is over zero, you can claim the credit and receive a refund up to $7500." It will be a refund since the poster in question already paid the taxes through withholding.

it's still a credit against adjusted income - NOT A REFUND - please see and understand IRS Form 8936.

 

[idiot900]

it's still a credit against adjusted income - NOT A REFUND - please see and understand IRS Form 8936.

Wait, so it reduces your taxable income by $7500 - or is it a credit applied to federal tax owed (or already paid)?

 

[WildRide47]

Wait, so it reduces your taxable income by $7500 - or is it a credit applied to federal tax owed (or already paid)?

It is a credit.

 

[Ampere]

Lucid keeps my head spinning. Last week my SA was jubilant, telling me it was likely that I would receive my Pure before the end of the year if I changed to the fixed initial configuration (metallic blue, DD Pro. etc.). Today he told me there were a very limited number of initial Pures and they were spoken for. Those receiving the first Pures would have to collect them from the factory in Casa Grande. I told him I would be happy to fly down there, but he said I wasn't on the list. So I switched my configuration back to zenith red and dropped the DD Pro. (I would have paid for the DD Pro with the fed tax rebate.) With luck, I'll have a car by spring. I don't plan to cancel. At the same time reading some of the posts on this forum, considering Lucid's cash burn and faltering stock price, I'm a little nervous, not about the quality of the car, but the fate of the company.

 

[wklglider]

Lucid keeps my head spinning. Last week my SA was jubilant, telling me it was likely that I would receive my Pure before the end of the year if I changed to the fixed initial configuration (metallic blue, DD Pro. etc.). Today he told me there were a very limited number of initial Pures and they were spoken for. Those receiving the first Pures would have to collect them from the factory in Casa Grande. I told him I would be happy to fly down there, but he said I wasn't on the list. So I switched my configuration back to zenith red and dropped the DD Pro. (I would have paid for the DD Pro with the fed tax rebate.) With luck, I'll have a car by spring. I don't plan to cancel. At the same time reading some of the posts on this forum, considering Lucid's cash burn and faltering stock price, I'm a little nervous, not about the quality of the car, but the fate of the company.

Agreed. The car is fantastic but the company...