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

[Prime]

The key component here is the new upper bound posted on the IRS website.

“If you entered a written binding contract to buy a vehicle before August 16, 2022, but took possession on or after August 16, 2022, and before January 1, 2023, you may claim the credit based on the prior rules and disregard the assembly requirement.”

If that’s accurate we’re SOL.

Well not totally right? Since they are extending old rules until March 2023 as far as build and battery. What’s unclear is if income and msrp limits will apply considering the BPA being signed.

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[Jac]

https://www.irs.gov/credits-deductions/credits-for-new-electric-vehicles-purchased-in-2022-or-before

Purchase date vs. delivery date
If you entered a written binding contract to buy a vehicle before August 16, 2022, but took possession on or after August 16, 2022, and before January 1, 2023, you may claim the credit based on the prior rules and disregard the assembly requirement.

If you purchased a vehicle between August 16, 2022 and December 31, 2022 but don't take delivery of the vehicle until 2023, see Credit for New Clean Vehicles Purchased in 2023 and After.


This link does not give actual guidance for those who purchased before aug 16 but did not deliver before Jan 1 2023.

You’re right. The portion of the IRS notice above followed a section of the IRS notice about the new final assembly location requirement. That was the only new EV tax credit requirement that went into effect immediately In August. I’m reading this as clarifying that folks who have pre August 16 binding purchase agreements but didn’t get their vehicle by year end will fall under the full new EV credit rules regarding the final assembly location requirement. However, the link is to the full new EV credit qualifications, suggesting all the new requirements will apply for 2023 - with the battery component qualification details coming soon.

 

[Autolycus]

FWIW, the statute has language indicating that the transition rule related to “purchases” made before enactment would be implemented as directed by Treasury. That means if Treasury decides it only applies to the manufacturing location requirement in 2022, then tough luck for us.

 

[astonius]

Well not totally right? Since they are extending old rules until March 2023 as far as build and battery. What’s unclear is if income and msrp limits will apply considering the BPA being signed.

I think those are separate concerns. The way I’m reading it is…

If you signed before 8/16 you could take delivery until 1/1 under the old rules, meaning even final assembly didn’t matter.

If you didn’t sign before 8/16 you could take the credit until 1/1 under the old rules if the final assembly was in NA.

Starting 1/1, regardless of what you signed, the income and price caps are in effect (in addition to final assembly in NA) but no battery sourcing requirements until March.

 

[photontorque]

Well, blimey.

I thought I understood that the buyer's agreement (PBA) last fall had a fighting, though not guaranteed, chance of preserving the federal tax credit to those of us (myself including) whose R1S delivery date got bumped from 2020 to 2021 to two different dates in 2022 to now sometime in 2023.

Based on the discussion in this thread, it appears that in fact the tax credit is not possible, even with a PBA, because my locked configuration slightly exceeds $80k?

 

[Jac]

Well, blimey.

I thought I understood that the buyer's agreement (PBA) last fall had a fighting, though not guaranteed, chance of preserving the federal tax credit to those of us (myself including) whose R1S delivery date got bumped from 2020 to 2021 to two different dates in 2022 to now sometime in 2023.

Based on the discussion in this thread, it appears that in fact the tax credit is not possible, even with a PBA, because my locked configuration slightly exceeds $80k?

That is how things look. If you don’t expect to receive your Rivian before March ends, I think it makes sense to wait and see whether Rivians will qualify under the battery source rule before you take any items out of your configuration to squeeze under $80,000. If the batteries don’t qualify no reason to remove desired items from your configuration.

 

[SANZC02]

That is how things look. If you don’t expect to receive your Rivian before March ends, I think it makes sense to wait and see whether Rivians will qualify under the battery source rule before you take any items out of your configuration to squeeze under $80,000. If the batteries don’t qualify no reason to remove desired items from your configuration.

Pretty sure batteries are only half so assembly in US would still qualify for 3750 if max price and income are in spec.

It has been awhile since I looked at that thought.

 

[lefkonj]

This is a complete mess. They had an easy solution but couldn't get bi-partisan support.

13k for American company
7500 for Foreign... easy done

They could have done this and taken 10-15% off each year for 5 years then killed it. That would push adoption.

 

[Yossarian]

I frankly thought the purpose of signing a PBA before the Inflation Reduction Act went into effect in August was to be able to qualify under the old rules that had only manufacturers caps and not income, vehicle price and sourcing requirements. If this was right, it really wouldn't matter when you actually took possession of the vehicle; the PBA froze your purchase clock at the time your agreement was executed (pre-IRA).

If if turns out that's not the case, and you actually need to take possession of the vehicle in the grey zone of early 2023 (i. e., before the IRS finally issues guidance, expected sometime in Q1), the PBA is virtually worthless, as most deliveries are much further down the road. This doesn't seem to make a lot of sense and if it is indeed the case, why did Rivian, Lucid, Fisker and other EV makers rush to get buyers PBA's to sign?

In any event, there is still the remaining larger unresolved issue of whether the IRS will accept a PBA that has less than a 5% penalty as binding for tax purposes.

 

[Jac]

I frankly thought the purpose of signing a PBA before the Inflation Reduction Act went into effect in August was to be able to qualify under the old rules that had only manufacturers caps and not income, vehicle price and sourcing requirements. If this was right, it really wouldn't matter when you actually took possession of the vehicle; the PBA froze your purchase clock at the time your agreement was executed (pre-IRA).

If if turns out that's not the case, and you actually need to take possession of the vehicle in the grey zone of early 2023 (i. e., before the IRS finally issues guidance, expected sometime in Q1), the PBA is virtually worthless, as most deliveries are much further down the road. This doesn't seem to make a lot of sense and if it is indeed the case, why did Rivian, Lucid, Fisker and other EV makers rush to get buyers PBA's to sign?

In any event, there is still the remaining larger unresolved issue of whether the IRS will accept a PBA that has less than a 5% penalty as binding for tax purposes.

It was unclear if a signed binding purchase agreement would work for 2023 deliveries, but it was certain we would not be eligible to apply the prior EV rules for 2023 deliveries without it. Rivian received numerous requests from customers to offer us a BPA to sign prior to enactment of the Inflation Reduction Act and, to their credit, they acted quickly to offer us the BPA.

 

[mike813]

It was unclear if a signed binding purchase agreement would work for 2023 deliveries, but it was certain we would not be eligible to apply the prior EV rules for 2023 deliveries without it. Rivian received numerous requests from customers to offer us a BPA to sign prior to enactment of the Inflation Reduction Act and, to their credit, they acted quickly to offer us the BPA.

this was my understanding as well. this is also why I took other than my original config that I could receive before the end of the year...

 

[photontorque]

That is how things look. If you don’t expect to receive your Rivian before March ends, I think it makes sense to wait and see whether Rivians will qualify under the battery source rule before you take any items out of your configuration to squeeze under $80,000. If the batteries don’t qualify no reason to remove desired items from your configuration.

Thanks for the feedback. If I, or anyone else, does receive an R1S (or R1T) before March, would the old rules regarding no vehicle price cap still apply, i.e. a vehicle slightly north of $80k would still get the tax credit? Sorry for being dense, I'm just a little confused by the overlapping timing of the PBA, the new tax rules, the latest announcement for relief on *some* of the new tax rules, and what takes precedence between today (Jan 1) and March 31.

 

[Jac]

Thanks for the feedback. If I, or anyone else, does receive an R1S (or R1T) before March, would the old rules regarding no vehicle price cap still apply, i.e. a vehicle slightly north of $80k would still get the tax credit? Sorry for being dense, I'm just a little confused by the overlapping timing of the PBA, the new tax rules, the latest announcement for relief on *some* of the new tax rules, and what takes precedence between today (Jan 1) and March 31.

Assuming this article is accurate, effective today the MSRP cap and income cap provisions are in effect. Only the battery sourcing test has been delayed through sometime in March.

“As reported by Reuters, the US Treasury Department has delayed its battery guidance for qualifying EV tax credits until sometime in March. Still, requirements like North American assembly of the EV as well as caps on MSRP and annual salary will still go into effect on January 1 as planned.”

Full article: https://electrek.co/2022/12/19/us-treasury-delays-ev-battery-guidance-qualify-for-2023-tax-credits/

 

[NY_Rob]

Let's hope the IRS "sometime in March" is like Rivian's "sometime in xxx" where the "sometime" is always the final hours of the final day of the month.

 

[RexRemus]

Seeing as how I think many of here would be disqualified on income caps regardless if we squeaked under the 80k vehicle limit - what are the available options there?

My partner makes much less than I do - when the 8 steps come around can I have her buy the vehicle? Because then It would be worth dropping wheels or whatever to slip under 80k. Otherwise changing options won't matter because of the income limits.

Is there anything stating that since *I* made the reservation, that someone else can't make the actual purchase of it? I can put the title in her name, and all that, doesn't matter. Where do things land on that front? Did the reservation and/or PBA "bind" the vehicle to YOU specifically or is it merely a place in line for a vehicle and the purchase could be made by anyone at that point?

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