Tax Credit Changes in new bill [LOCKED DUE TO POLITICS & ARGUING]

[Gsxr150]

Definitely a psychological bummer for us as our R1S was initially estimated to be here by the end of the year and we will now lose out on the 7.5k credit due to being just over salary cap (yeah, I know not exactly the worst problem one could have).

Need to try to convince some friends of mine holding out for a max pack R1T to instead try and snag a large pack this year as the max pack will now be costing them 17.5k.

So you were slated for one this year and on June 11th they changed it on you?

Sponsored

 

[Acoustic71]

Still worried about that tonneau though.

Tonneau reason better than yo reason

 

[Batman]

There's a POSSIBLE clue hidden in the wording regarding the tax credit - it says "The full EV tax credit will be available to individuals reporting adjusted gross incomes of $150,000 or less, $300,000 for joint filers."

KEYWORD: FULL

Some tax credits are called Phase Out tax credits where if you are over the limit, there is a formula that decreases the credit as your income increases. For example, for every $1000 over the limit, $100 is deducted from the tax credit.

Here's how it works for the child tax credit:

• Eligibility: Families with MAGIs less than $75,000 for single taxpayers, $112,500 for heads of household and $150,000 for married couples filing jointly were eligible for a full 2021 credit of $3,600 for each child under 6 and $3,000 for children under 18. (You may have received half of your available credit as monthly advance payments from July to December 2021.)
• Phase-out range: If your 2021 income exceeded the limits listed above, your child tax credit would be reduced by $50 for every $1,000 of income over the limit. A single mom who earned $80,000, for example, would receive a tax credit of $2,750 for her qualifying middle schooler: $3,000 - ($50 x 5) = $2,750.

Confused about the highlighted part? So is it $150k or $300k for joint filers?

"There's a POSSIBLE clue hidden in the wording regarding the tax credit - it says "The full EV tax credit will be available to individuals reporting adjusted gross incomes of $150,000 or less, $300,000 for joint filers."

KEYWORD: FULL

Some tax credits are called Phase Out tax credits where if you are over the limit, there is a formula that decreases the credit as your income increases. For example, for every $1000 over the limit, $100 is deducted from the tax credit.

Here's how it works for the child tax credit:

• Eligibility: Families with MAGIs less than $75,000 for single taxpayers, $112,500 for heads of household and $150,000 for married couples filing jointly were eligible for a full 2021 credit of $3,600 for each child under 6 and $3,000 for children under 18. (You may have received half of your available credit as monthly advance payments from July to December 2021.)
• Phase-out range: If your 2021 income exceeded the limits listed above, your child tax credit would be reduced by $50 for every $1,000 of income over the limit. A single mom who earned $80,000, for example, would receive a tax credit of $2,750 for her qualifying middle schooler: $3,000 - ($50 x 5) = $2,750"

 

[Rivian_Hugh_III]

Unfortunately no. Here’s the text.

1. No Obligations

Each Preorder you submit for a Vehicle acts as a deposit for a future purchase of the Vehicle. You are under no obligation to purchase a Vehicle from us, and we are under no obligation to supply you with a Vehicle.

These Terms do not constitute an agreement for the sale of a Vehicle and do not lock in pricing, a firm production slot, a firm delivery date, or specific Vehicle configuration. To complete the purchase or lease of a Vehicle, you will need to execute Rivian’s standard final Rivian Motor Vehicle Purchase Agreement (“Final Sales Agreement”) which will include additional terms and conditions, including the final price sheet for the vehicle you ultimately select (“Your Selected Vehicle”). The Final Sales Agreement may be made with another Rivian entity. Additional payment for Your Selected Vehicle, including taxes and other governmental fees, will be required at that time.

We may decline Preorders to avoid over-subscription or as we deem appropriate in our sole discretion. If your Preorder is declined, you will be notified and your Preorder payment will be refunded.

Maybe they could make a pre-order binding with a $5 fee for breaking the agreement.

 

[mabowden]

You are confounding pandemic induced supply constraints with market demand directed supply constraints.

Go to a GM dealer and ask for a Chevy Bolt. You will leave the dealership with one the same day.

Agreed!

Or a nissan leaf. Or a bmw i3.

The problem is the EV adoption rate is currently too small. And the lower end offerings do not compete. We need economies of scale to do better and get the bottom 80% of buyers because currently the most in demand vehicles are all in high income brackets.

Incentives will help adoption, which should help economies of scale. Without Tesla, EV components would be more expensive now because there wouldn't be much of an economy of scale. The spending package on the charging network hopefully will see some relief with infrastructure woes.

 

[mabowden]

Ok, I don’t get it. I live in SoCal. We own a house, have two kids, and make nowhere near $300k.
I guess we don’t splurge… except for the Rivian.

People make blanket statements that sometimes don't know what they're talking about. Only you know your financial situation and can make the call what you can afford. Net worth at times is a better indicator of affordability.

For Example: If you're trading in a paid-off model Y to get the rivian, does it really matter what your income level is? No, because the cost delta will be so low. Not saying this is your situation, but it might be for someone.

Now, if you're putting 10% down and making 100k in los angeles, you might be in for a hard time...

 

[Friscorays]

So you were slated for one this year and on June 11th they changed it on you?

Initial estimate for our R1S last quarter 2022. New estimate in email received June 30: first half 2023. It isn't a deal breaker but again has been somewhat of an emotional roller coaster. Also bit of a bummer that 295k is still completely good to go while 305k completely isn't.

 

[Friscorays]

I found this video pretty informative and seems to be well-informed.


Some specifics pertinent to this discussion:
The income caps seem to be all or none as far as tax credit: 8 minute 40 mark.

Vehicle's not in service by December 31, 2022 will be subject to the new law so deposit or pre-payment in full won't be a work around: 9 minute mark.

 

[Siguy90]

Everyone's talking about the income limit but do we even have information on if Rivian's battery materials will even make it eligible for the full or even half of the credit to begin with?

For me personally losing the $7500 isn't really going to prevent me from getting the Rivian but it did play a part in deciding to go for one. Was initially going to go for a BMW X3M but with the credit included the Rivian seemed like a much better value (and may still be without it imo).

 

[R1Sky Business]

Everyone's talking about the income limit but do we even have information on if Rivian's battery materials will even make it eligible for the full or even half of the credit to begin with?

For me personally losing the $7500 isn't really going to prevent me from getting the Rivian but it did play a part in deciding to go for one. Was initially going to go for a BMW X3M but with the credit included the Rivian seemed like a much better value (and may still be without it imo).

Just exploring all possible possibilities!!!!

 

[Sully151]

Anyone else think the $80k price cap will be removed?

This isn’t only bad news for Rivian, but for Hummer, higher end Lightnings, probably the Silverado, and CyberTruck.

I can’t believe Ford, Chevy, and Elon will be happy about that.

 

[derekmw]

Sorry if this is repeated, but for those who already received or about to receive a Rivian this year, shouldn't be affected at all by this? We can still claim the $7500 tax credit when filing for 2022 tax year? Or is this bill going to affect us? (I'm about to take delivery this week or next)

 

[hilld]

I would like to see if RIvian will issue binding sales contracts for people that are expected to receive a vehicle in 2023 so the 2022 rules can apply. That is a make it or break it scenario for me.

 

[ads75]

Anyone else think the $80k price cap will be removed?

This isn’t only bad news for Rivian, but for Hummer, higher end Lightnings, probably the Silverado, and CyberTruck.

I can’t believe Ford, Chevy, and Elon will be happy about that.

If they keep a $80k limit, maybe it will provide incentives for manufacturers to keep prices below that. And let's be honest, the majority of Americans cannot afford a $80k vehicle, and convincing them that someone who can deserves another tax deduction is a hard sell.

 

[jbssfelix]

What’s interesting is this will likely cause us not to buy a 2nd EV for a while due to the lost tax credits. No we don’t need government subsidies to afford them, but with 3 kids in daycare it would be nice!

Look at you, Mr Rich Guy, affording 3x daycare costs.

Sponsored