Latest EV tax credit status (as of 12/30/22) - summary by NYT

[theyoungone]

If you can afford an $80k vehicle you don’t need your lifestyle subsidized by American taxpayers.

This is just outright ridiculous and in line with some of the other things I've seen on this sub and it just absolutely baffles me.

"If you can/can't afford X, then maybe you shouldn't be buying this car."

Not everyone who is buying this car sees 80K as a drop in a bucket. I'm single, upper middle class, and have a pretty good job, but by no means am I well off enough to just say almost 10% of my vehicle purchase is worth forgetting about because it's above a certain price point. That's absolutely bonkers to me.

Sponsored

 

[Jac]

There's been talk of the battery sourcing requirement to take effect in 2024 for one since literally zero manufacturers qualify as-is. This article also mentions the possibility of batteries assembled in the USA to qualify initially, and Rivian's packs are assembled in the Normal factory.

A lot of us will be very happy if either of those things that have been discussed actually happen!

 

[Thedude]

This is just outright ridiculous and in line with some of the other things I've seen on this sub and it just absolutely baffles me.

"If you can/can't afford X, then maybe you shouldn't be buying this car."

Not everyone who is buying this car sees 80K as a drop in a bucket. I'm single, upper middle class, and have a pretty good job, but by no means am I well off enough to just say almost 10% of my vehicle purchase is worth forgetting about because it's above a certain price point. That's absolutely bonkers to me.

Same, it’s definitely not a drop in the bucket for me. However, it’s also a totally luxury item and there’s really no way around that argument. A truck half the price can do all the “truck” stuff just as well and an EV half the price can outperform this on all the EV efficiency and economics side. Luxury items should not be subsidized by taxpayers.

 

[Yodi]

Ideally that is what will happen. It’s still up to the IRS and each state whether they will honor that agreement.

If the BPA is accepted by the IRS for 2023 deliveries the MSRP cap, income cap and battery sourcing requirements won’t apply as they didn exist in the prior EV tax credit law. If the BPA is not accepted by the IRS and you are over the income cap in the new EV law, you are ineligible for the tax credit so the MSRP is irrelevant.

Wow. A lot to digest here... @COdogman's comment about whether or not the IRS and your State will honor that agreement is Accurate under former IRS documentation regarding 'Written Binding Contract' terms, but now I can't find that verbiage anywhere.

My commentary here pertains to Pre-Aug 16 '22 Binding Contract holders who do NOT receive delivery until 2023 (because if you received it in 2022, you definitely follow the Old 2022 Rules).

I just wanted to point out a few things I noticed; IRS seems to be steering ALL 2023 vehicle deliveries towards the New 2023 Rules.

• Current 2022 Verbiage states:
  • 
  • The yellow highlight seems to imply that Dec 31, 2022 is the cutoff for the 'prior rules' of 2022.
  • Anyone who didn't have a written binding contract before Aug 16, '22 is directed to proceed under Current 2023 Rules.
• Former 2022 Verbiage (that is no longer relevant, I think, since it's been taken down) stated:
  • 
  • This did NOT state anything about taking possession before January 1, 2023, but that now seems to have been changed.
    • The same Jan 1 2023 addition was added on this website as well: https://www.fueleconomy.gov/feg/taxevb.shtml

Stay tuned, if future/S00n changes to the EV Battery requirements take effect, as referenced by @SANZC02, @Jac, @zefram47:

• https://www.reuters.com/business/au...ery-minerals-component-rule-march-2022-12-19/
• https://afdc.energy.gov/laws/409

For people who don't qualify under 2023 rules due to income limits, I'll let people much smarter than me determine if there are still other ways of interpreting application of the 'Transition Rule' from the original Inflation Reduction Act of 2022 or other published documentation.

 

[sac602]

MSRP is defined here: https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after


MSRP is the retail price of the automobile suggested by the manufacturer, including options, accessories and trim but excluding destination fees. It isn't necessarily the price you pay.

 

[sac602]

Wow. A lot to digest here... @COdogman's comment about whether or not the IRS and your State will honor that agreement is Accurate under former IRS documentation regarding 'Written Binding Contract' terms, but now I can't find that verbiage anywhere.

My commentary here pertains to Pre-Aug 16 '22 Binding Contract holders who do NOT receive delivery until 2023 (because if you received it in 2022, you definitely follow the Old 2022 Rules).

I just wanted to point out a few things I noticed; In my opinion, IRS seems to be steering ALL 2023 vehicle deliveries towards the New 2023 Rules.

• Current 2022 Verbiage states:
  • 
  • The yellow highlight seems to imply that Dec 31, 2022 is the cutoff for the 'prior rules' of 2022.
    • Same is true by
  • Anyone who didn't have a written binding contract before Aug 16, '22 is directed to proceed under Current 2023 Rules.
• Former 2022 Verbiage (that is no longer Relevant, I think, since it's been taken down) stated:
  • 
  • This did NOT state anything about taking possession before January 1, 2023, but that now seems to have been changed.
    • The same Jan 1 2023 addition was added on this website as well: https://www.fueleconomy.gov/feg/taxevb.shtml

Stay tuned, if future/S00n changes to the EV Battery requirements take effect, as referenced by @SANZC02, @Jac, @zefram47:

• https://www.reuters.com/business/au...ery-minerals-component-rule-march-2022-12-19/
• https://afdc.energy.gov/laws/409

For people who don't qualify under 2023 rules due to income limits, I'll let people much smarter than me determine if there are still other ways of interpreting application of the 'Transition Rule' from the original Inflation Reduction Act of 2022 or other published documentation.

Unfortunately, I agree. I think the transition rule (written binding contract) is dead starting in 2023. We are left with the income cap and msrp cap. Damn...

 

[Autolycus]

MSRP is defined here: https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after


MSRP is the retail price of the automobile suggested by the manufacturer, including options, accessories and trim but excluding destination fees. It isn't necessarily the price you pay.

Had already started to type the same! Very important detail for a lot of us R1S people.

MSRP is the retail price of the automobile suggested by the manufacturer, including options, accessories and trim but excluding destination fees. It isn't necessarily the price you pay.

Pretty funny to me that a Model Y with 2 rows is capped at $55k for the credit, but add that 3rd row and you get up to $80k. Too bad the cheapest Model Y is nearly $66k. I would wonder if Tesla might drop the pricing, but I can't see them dropping it $11k and even then it doesn't help anybody who wants a color other than white.

 

[EVentually]

I could be wrong, but I feel like the majority of R1T owners likely make more than $150k single/$300k couple/$225k head of household

As unfair as it may seem, many buying a car at $80k+ with a high income are buying the best car for them; raising that limit won't exactly lead to mass adoption (i.e. the goal of the new tax break). They're excluding, by definition, the top 10% of Americans. Without getting too political, it's fair to reason that reducing the tax burden for that demographic (myself included) can be seen as excessive government spending.

 

[Autolycus]

I could be wrong, but I feel like the majority of R1T owners likely make more than $150k single/$300k couple/$225k head of household

As unfair as it may seem, many buying a car at $80k+ with a high income are buying the best car for them; raising that limit won't exactly lead to mass adoption (i.e. the goal of the new tax break). They're excluding, by definition, the top 10% of Americans. Without getting too political, it's fair to reason that reducing the tax burden for that demographic (myself included) can be seen as excessive government spending.

The purpose of the credit isn't (or at least shouldn't be) to subsidize or not subsidize the lifestyles of wealthy people. The purpose of the credit is to increase EV adoption. If I'm comparing 2 cars -- an EV SUV with an MSRP of $81k or an ICE SUV with an MSRP of $75k -- that credit can absolutely still influence my decision. With the $80k MSRP cap on the credit, the comparison is that the ICE is $6k cheaper. Without the cap, the EV is $1500 cheaper. It's literally equivalent to a 9.3% discount on the EV. You have to be in a much higher level of wealth than $300k/year and buying a $75-81k vehicle to get to a point where a 9.3% discount has no effect on your decision-making.

 

[EVentually]

The purpose of the credit isn't (or at least shouldn't be) to subsidize or not subsidize the lifestyles of wealthy people. The purpose of the credit is to increase EV adoption. If I'm comparing 2 cars -- an EV SUV with an MSRP of $81k or an ICE SUV with an MSRP of $75k -- that credit can absolutely still influence my decision. With the $80k MSRP cap on the credit, the comparison is that the ICE is $6k cheaper. Without the cap, the EV is $1500 cheaper. It's literally equivalent to a 9.3% discount on the EV. You have to be in a much higher level of wealth than $300k/year and buying a $75-81k vehicle to get to a point where a 9.3% discount has no effect on your decision-making.

I hear you, but we're still talking about a minority of Americans. 9.3% is also a bit misleading since many are priced above that (also when pricing the car with respect to %income, that number can vary widely). Because it's static, we should stick with the $7500 figure. While I can completely understand why a $7500 swing would change which car you buy, there are a ton of other factors that reduce its value in decision-making:

• the price range would specifically have to be very narrow at around $80k+ for $7500 to change your mind. Rivian is a great example showing this is a rare case -where they gained 90k+ preorders after the price hike.
• you would need to be cross-shopping an EV with an equivalent ICE. Not a ton are doing that in this price range. Especially with Audi, BMW, Porsche, etc phasing out ICEs.
• High income households are already considering purchasing EVs as their next car

My argument is solely based on the perspective that there will be diminishing returns on lifting the existing rules under the goal of "mass EV adoption".

 

[Count Orlok]

80k seems pretty random too... I wonder if it is inflation adjusted going forward or will it become another tax rule creep like the old AMT.

 

[COdogman]

I support the idea of there being a cap, but it seems like they could have used a tiered cap, so lower priced EVs/ lower income get the most credit while higher priced EVs/ higher income get less.

The elusive “affordable” EV the majority of people can afford and offers decent range will be more impactful for the world than the few people who buy a Lucid Air Sapphire. Right now they just need to encourage adoption of what’s available.

 

[MXA121]

Got VIN and Insurance and signed purchase dated 12/30/2022. I was hoping to dodge the 2023 limits and claim it on 2022 even though I won't receive it until Jan... Time to hire a good CPA! ?

 

[SANZC02]

Wow. A lot to digest here... @COdogman's comment about whether or not the IRS and your State will honor that agreement is Accurate under former IRS documentation regarding 'Written Binding Contract' terms, but now I can't find that verbiage anywhere.

My commentary here pertains to Pre-Aug 16 '22 Binding Contract holders who do NOT receive delivery until 2023 (because if you received it in 2022, you definitely follow the Old 2022 Rules).

I just wanted to point out a few things I noticed; IRS seems to be steering ALL 2023 vehicle deliveries towards the New 2023 Rules.

• Current 2022 Verbiage states:
  • 
  • The yellow highlight seems to imply that Dec 31, 2022 is the cutoff for the 'prior rules' of 2022.
  • Anyone who didn't have a written binding contract before Aug 16, '22 is directed to proceed under Current 2023 Rules.
• Former 2022 Verbiage (that is no longer relevant, I think, since it's been taken down) stated:
  • 
  • This did NOT state anything about taking possession before January 1, 2023, but that now seems to have been changed.
    • The same Jan 1 2023 addition was added on this website as well: https://www.fueleconomy.gov/feg/taxevb.shtml

Stay tuned, if future/S00n changes to the EV Battery requirements take effect, as referenced by @SANZC02, @Jac, @zefram47:

• https://www.reuters.com/business/au...ery-minerals-component-rule-march-2022-12-19/
• https://afdc.energy.gov/laws/409

For people who don't qualify under 2023 rules due to income limits, I'll let people much smarter than me determine if there are still other ways of interpreting application of the 'Transition Rule' from the original Inflation Reduction Act of 2022 or other published documentation.

I have my guide looking into this portion, seems Rivian has to report the sale with buyers name and SS at time of purchase but they are not collecting that information in the 8 step process. I’ll let you know what they say as with pre-March pricing my R1S comes in at 77k.

The sale qualifies only if:

• You buy the vehicle new
• The seller reports required information to you at the time of sale and to the IRS.
  • Sellers are required to report your name and taxpayer identification number to the IRS for you to be eligible to claim the credit.

 

[CappyJax]

How long must you own the vehicle to avoid having to pay back the tax credit?

Sponsored