Binding Agreement: Delivery in 2023

[Gsxr150]

I know this topic has been discussed ad nauseum, so I will keep this short. Are these correct statements?

1) If you DIDN'T have a binding agreement and bought (took delivery of) a Rivian after August 16th, you wouldn't qualify for the $7500. Correct?

2) If you HAVE a binding agreement and bought (took delivery of) after August 16th through December 31st, 2022, you will receive the $7500. Also correct?

3) If you HAVE a binding agreement and bought (took delivery of) on or after January 1st, 2023, you will NOT received the $7500 credit. Correct?

(Or, in the last case there is no verbiage from the IRS confirming this - all speculation for point, simply rolling the dice in #3, correct?)

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[astonius]

On point 2, if you buy between Aug 16 and Dec 31 you still get the credit regardless of the binding agreement. The only additional constraint is final assembly in the US, which of course the Rivian meets.

On point 3, we are assuming we are eligible, hence the mad rush to get the option to sign out to everyone the week before. We’ll see how it shakes out once the official rules are determined.

 

[Grajjie]

From my understanding... any Rivian delivery before 12/31/22 will qualify for the credit, regardless of MSRP, your income, battery materials, and if you signed or didn't sign the binding agreement. The only limitation in place between 8/16 and 12/31 is the one for the final assembly being in the US which isn't a problem for Rivian. I also believe but am not entirely sure but the credit will need to be filed in your taxes and it will not be a point of sale credit until after Jan 1, 2023.

For your #3, it's hard to say since the following are still in speculation like if the binding agreement will be valid according to the IRS to even be able to use the old credit rules or if Rivian's battery materials make it eligible for the new rules (full, half, none of the credit). This also assumes your build is below the $80k MSRP limit and your income is below the limit as well.

 

[ERguy]

2) If you HAVE a binding agreement and bought (took delivery of) after August 16th through December 31st, 2022, you will receive the $7500. Also correct?

While that's technically correct... You don't need the binding contract. You can get the credit with or without the binding contract.

3) If you HAVE a binding agreement and bought (took delivery of) on or after January 1st, 2023, you will NOT received the $7500 credit. Correct?

I don't think that's correct.

The entire purpose of the binding contract was to allow people to claim the credit in future years as if they had purchased it in 2022.

Final IRS rules could in theory determine the binding contracts are invalid or don't count, but based on the new law the binding contract appears to lock in that rebate for people who take delivery next year.

 

[ERguy]

I also believe but am not entirely sure but the credit will need to be filed in your taxes and it will not be a point of sale credit until after Jan 1, 2023

The point of sale credit starts in 2024.

it's hard to say since the following are still in speculation like if the binding agreement will be valid according to the IRS to even be able to use the old credit rules or if Rivian's battery materials make it eligible for the new rules (full, half, none of the credit). This also assumes your build is below the $80k MSRP limit and your income is below the limit as well.

Although it's very possible the Rivian binding contracts are declared invalid according to the final IRS rules as you mentioned, as long as the contracts are considered valid the income limits and MSRP limits won't affect the ability to claim the tax credit.

I'm cautiously optimistic the IRS will honor the contracts, but I'm fully aware there are no guarantees.

 

[freshpow]

While that's technically correct... You don't need the binding contract. You can get the credit with or without the binding contract.



I don't think that's correct.

The entire purpose of the binding contract was to allow people to claim the credit in future years as if they had purchased it in 2022.

Final IRS rules could in theory determine the binding contracts are invalid or don't count, but based on the new law the binding contract appears to lock in that rebate for people who take delivery next year.

Agree on all points. To make it easy, 1, 2 & 3 from OP are incorrect.

 

[Gsxr150]

Thanks you, folks! Your messages were extremely helpful. I'm glad you guys are much smart! Seems we are hopeful the Binding Agreement will be valid in 2023, but no guarantees just yet, ha.

 

[linkwpc]

This a good video on this Topic

 

[Gsxr150]

Agree on all points. To make it easy, 1, 2 & 3 from OP are incorrect.

Did you read the folks posts above? Sounds like they agree question 3 is a roll of the dice and no one knows for sure either way.

 

[The_Frog]

While that's technically correct... You don't need the binding contract. You can get the credit with or without the binding contract.



I don't think that's correct.

The entire purpose of the binding contract was to allow people to claim the credit in future years as if they had purchased it in 2022.

That is my understanding as well, ie the loophole is that a biding contract is treated the same as taking delivery before 12/31/22.

 

[freshpow]

Did you read the folks posts above? Sounds like they agree question 3 is a roll of the dice and no one knows for sure either way.

Sure. We won't know for sure until someone has their refund approved or rejected, which won't happen for quite some time, but the whole point of the binding agreement that Rivian drafted was to help those with #3. If you read through all the other threads, seems like most CPAs feel confident that it will be legit. Of course, IRS will have the final say.

 

[Gsxr150]

Sure. We won't know for sure until someone has their refund approved or rejected, which won't happen for quite some time, but the whole point of the binding agreement that Rivian drafted was to help those with #3. If you read through all the other threads, seems like most CPAs feel confident that it will be legit. Of course, IRS will have the final say.

Yep, fair enough! I guess it is what it is at this point...you're right we'll have to see. Either way, good to know!

 

[TexasBob]

So to summarize the correct version of this is:

1) If you took delivery of your Rivian anytime before December 31st, 2022, you WILL receive the $7500.

2) If you HAVE a binding agreement* in place before August 16th and take delivery on or after January 1st, 2023, you WILL receive the $7500 credit.

3) If you do NOT have a binding agreement in place and you take delivery on or after January 1st, 2023 you may or may not receive some or all of the $7,500 credit depending on (a) your income, (b) mineral content in Rivian batteries (c) sticker price of your vehicle. All still tbd.


* No one knows exactly what will and won't count as a "binding agreement" for the IRS, but if you have one that meets the criteria, then you are good.

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