Colorado Tax Credits

[waitingonanr1s]

I have been wondering this as well, and I dug into it and cannot find a clear answer. I presume it may need to be something that you'd have to contact the DOR to get a clear answer on, unfortunately.

No, CO credit is based on the date of delivery.

" For the purpose of determining the allowable credit amount, the purchase or lease generally is not considered complete until the purchaser or lessee takes possession of the truck." See bottom of page 2 - https://tax.colorado.gov/sites/tax/files/documents/ITT_Innovative_Truck_Credit_Jun_2023.pdf

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[Spaceball1]

No, CO credit is based on the date of delivery.

" For the purpose of determining the allowable credit amount, the purchase or lease generally is not considered complete until the purchaser or lessee takes possession of the truck." See bottom of page 2 - https://tax.colorado.gov/sites/tax/files/documents/ITT_Innovative_Truck_Credit_Jun_2023.pdf

Good catch. The Fed credit talks about the difference between Purchase and Delivery date, while the CO one specifies Delivery date. You are likely correct!

Probably safest for anyone this year to just apply for the $2800 credit, and anyone taking delivery later this year, you may want to delay it until 2024 to get the $5000 credit.

 

[alextakesphotos]

Good catch. The Fed credit talks about the difference between Purchase and Delivery date, while the CO one specifies Delivery date. You are likely correct!

Probably safest for anyone this year to just apply for the $2800 credit, and anyone taking delivery later this year, you may want to delay it until 2024 to get the $5000 credit.

So they consider the R1S a light truck instead of a light duty passenger? Also where are you seeing that this doesn't take effect until 2024 for Rivian?

 

[zefram47]

So you are saying they don't take the binding contract into consideration like the IRS does?

I can only assume this is what you are referring to?

Yes...as someone else posted, the definition of purchase complete, where the IRS explicitly defined it as the date the binding contract was signed. But I'm not a CPA or a tax attorney, etc., etc...so consult someone who would know better.

You should be able to get the $2800 credit, though. The $5k credit doesn't go into affect for Rivians until 2024 anyway, since they fall into the "over 8500 lb GVWR" anyway.

Yes, though someone I know supposedly talked to the state and vehicles like the Rivian were not intended to fall into that category as a passenger vehicle. But as-written, they do...so I assume there's no issue claiming it due to the 8532 GVWR.

 

[alextakesphotos]

Okay I just got off the phone with CO DOR and the guy said we could try for the Light Duty $3500 with the 2022 binding contract & get away with it due to the "supply chain issues" but if they deny it then we can still apply for the $2800.

Like Zefram said, the Rivians were not intended to fall under that tax bracket but they do because they weight more than 8500GVWR & they qualify under it and there is no MSRP cap.

Good to know at least I can still at least qualify for the $2800 but for sure going to try for $3500. Us in CO know its not going to be cheap to register so anything back helps! ha!

 

[Spaceball1]

So they consider the R1S a light truck instead of a light duty passenger? Also where are you seeing that this doesn't take effect until 2024 for Rivian?

Good point. I was just thinking of R1T. Did they say when you called that R1S would still be considered a truck? I would think you’re right and it would fall into the passenger column.

 

[alextakesphotos]

Good point. I was just thinking of R1T. Did they say when you called that R1S would still be considered a truck? I would think you’re right and it would fall into the passenger column.

He said the wording on that chart is wrong. Where it says greater, it should be lesser. He seemed pretty sure we would qualify for the $2800 for sure even if they deny the $3500.

For those have already registered their car. On the registration do they call it a light duty truck?

 

[caliwagon]

Probably safest for anyone this year to just apply for the $2800 credit, and anyone taking delivery later this year, you may want to delay it until 2024 to get the $5000 credit.

I'm in that boat... Pre-price-hike reservation; R1S delivery expected Q4 2023. Just got my "please confirm your configuration email." But I would like to push off delivery until Q1 2024 for this reason and others. Anyone managed to do this with Rivian?

 

[Spaceball1]

I'm in that boat... Pre-price-hike reservation; R1S delivery expected Q4 2023. Just got my "please confirm your configuration email." But I would like to push off delivery until Q1 2024 for this reason and others. Anyone managed to do this with Rivian?

Could you switch the order to a max pack and then change it later in the year so it bumps you down the line a bit? Seems if they say Q4 you may be safe to just wait it out and just be slow on submitting your documents if that time comes.

 

[Lpool63]

Obviously I’m in Colorado and have been digging into the tax credits here. I actually bought a used R1T in February but still have my order that I switched to an R1S for now. Anyway, thought I’d share some info I’ve learned regarding the new/upcoming Colorado tax credits.

Colorado Truck Credit PDF

Innovative Motor Vehicle Credit

As of July 1, 2023, the tax credit for light duty vehicles (8500 lb GVWR or less) is upped to $5k. Most people know this now. But Light duty trucks with GVWR above 8500 doesn’t go up to $5k until January 1, 2024. Word of caution to those expecting their R1 this year! no word yet that I can find if the dual motors will be the same GVWR or not.

Also note that with the Innovative truck credit there appears to be no price cap, which I found interesting. There is a note that the credit cannot be more than the MSRP difference between an equivalent ICE version of the truck (so a Tacoma/4Runner for us, I guess?).


So, in summary, if you’re in Colorado and like me have a binding agreement for purchase, you can maximize tax credits in the following ways:

• Purchase Jan 2024 or late: Get full $5k CO credit and amend Federal 2022 to get the $7500 federal credit.
• Purchase between July 2023 and January 2024: Binding agreement gets you the $7500 fed no matter what, but CO credit will be by old rules which is $2800 for the light duty truck above 8500 GVWR.

If you don’t have binding agreement, unfortunately you’ll be stuck with $80k price caps for the federal credit on any scenario.

I would check with an accountant on the federal tax credit and a 2024 delivery. Based on my accountants advice it’s is the MY year which determines the eligibility for the $7500 for reservations with the none refundable deposit which applies only to MY 22 and 23 vehicles. If your vehicle is a MY 24 you’re now under the revised IRS rules with the $80k price cap, reduced IRS credit of $3750 and limits on your income (AGI).

 

[Rivian in CO]

... the none refundable deposit which applies only to MY 22 and 23 vehicles. If your vehicle is a MY 24 you’re now under the revised IRS rules with the $80k....

What's your accountant's basis for these statements? Unless I'm missing something (which is entirely possible, given that the IRS is involved), this doesn't seem to be the case because...

...the RIvian Binding Contract to Purchase that I signed doesn't limit the purchase agreement to specific model years. It just says that the contract "...creates a binding obligation for you to purchase (the “Order”) a Rivian R1 vehicle...". That implies that the contract applies to any R1 vehicle (Truck or SUV) for any model year.

Further, the IRS Info Sheet Credits for New Electric Vehicles Purchased in 2022 or Before doesn't seem to limit the qualifying vehicles to specific model years .

 

[Lpool63]

What's your accountant's basis for these statements? Unless I'm missing something (which is entirely possible, given that the IRS is involved), this doesn't seem to be the case because...

...the RIvian Binding Contract to Purchase that I signed doesn't limit the purchase agreement to specific model years. It just says that the contract "...creates a binding obligation for you to purchase (the “Order”) a Rivian R1 vehicle...". That implies that the contract applies to any R1 vehicle (Truck or SUV) for any model year.

Further, the IRS Info Sheet Credits for New Electric Vehicles Purchased in 2022 or Before doesn't seem to limit the qualifying vehicles to specific model years .

Here's his exact reply


Here's a quick Rivian summary for you.



For tax year 2022 for vehicles purchased before August 17, 2022 (prior to the Inflation Reduction Act of 2022) :



If you entered into a binding contract to buy a 2022/2023 Rivian before August 17, 2022 (which you did per your previous email), you may elect to claim the new electric vehicle tax credit based on the prior rules. To elect to the credit under the prior rules you must elect the credit on your 2022 tax return after you take delivery of the vehicle. To do this we would amend your 2022 tax return to take the credit.



Rivians that qualify:

 

[Lpool63]

Here's his exact reply


Here's a quick Rivian summary for you.



For tax year 2022 for vehicles purchased before August 17, 2022 (prior to the Inflation Reduction Act of 2022) :



If you entered into a binding contract to buy a 2022/2023 Rivian before August 17, 2022 (which you did per your previous email), you may elect to claim the new electric vehicle tax credit based on the prior rules. To elect to the credit under the prior rules you must elect the credit on your 2022 tax return after you take delivery of the vehicle. To do this we would amend your 2022 tax return to take the credit.



Rivians that qualify:

He then stated the following:



Since the contract doesn’t specify the year of the vehicle, I believe it could be a 2022 or 2023 model. The fact that the contract is in place before the August date is the important part. And when you take delivery doesn’t matter either. The only vehicles eligible however are those I listed in the previous email. 2002 and 2023 models. The 2024 model would be part of the Inflation Reduction Act regs.

 

[Lpool63]

This is the source of his information

https://www.irs.gov/credits-deducti...d-clean-vehicles-purchased-in-2022-and-before

 

[Rivian in CO]

Thanks Lpool63 for providing that info. I do see that the IRS publication you linked to only lists the 2022 and 2023 model years. I wonder though why the 2024 MY isn't listed. I assume it doesn't have any noteworthy changes that would disqualify it. But since it's not currently listed, I guess it would be risky to try to get the tax credit for a 2024 MY vehicle based on the pre-Aug 2022 criteria.

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