2022 vs 2023 Tax credit…Again

[bbonkk]

LOL, we could dispute this 'Binding Contract' interpretation all day... OR, we could revisit past Forum discussions on the subject here:

https://www.rivianforums.com/forum/threads/irs-guidance-on-binding-agreement.7564/




Regardless of interpretation, please note that the IRS Definition never explicitly states that a 5%+ deposit is required, and references enforceability under State law.

I wish you luck getting clarity from Rivian, @bbonkk , but I'm pretty sure their legal team will respond with an answer already written into the Binding Contract to Purchase Agreement (highlighted in BOLD even):

I just hope for clarity. Maybe add to the deposit???

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[tomis916]

You may want to go back and check the previous discussion thread on this forum about the BPA and the IRS' position that 5% is considered a binding purchase agreement. The guidance also indicates that what constitutes a BPA is determined based on state law.

https://www.rivianforums.com/forum/threads/irs-guidance-on-binding-agreement.7564/

 

[SANZC02]

Some interesting information on a delay for the EV battery sourcing portion of the tax credit…

 

[NY_Rob]

^ well, that is an interesting development! Give us Jan-Feb delivery folks hope

 

[Mjl]

Some interesting information on a delay for the EV battery sourcing portion of the tax credit…

This is very promising for some of us! I have a tentative delivery date of 12/31, so thats cutting it insanely close!

 

[Gavinmcc]

I’m getting mine 12/28. Days to spare.

 

[brancky3]

I’m getting mine 12/28. Days to spare.

Me too, but 12/23. We don't qualify for the 2023 credit so this year will be great since we bought the Rivian and the Mach E which both get a full $7500.

 

[DTown3011]

It is my accountants understanding that I/we will be grandfathered in under the old rules if we had a binding contract to purchase an EV before the new law was passed on August 16, 2022 (which we do by signing the agreement).

He found this interpretation in the law:

The Inflation Reduction Act offers some relief for EV buyers who have written, binding sales contracts from this year to purchase EVs that will be placed in service or delivered on, or after, August 16, 2022, or in 2023.

He is recommending we include the credit on our 2023 return and attach a copy of the binding contract. This is just my personal situation. I'm not providing any specific tax advice for anyone else here!

 

[electruck]

It is my accountants understanding that I/we will be grandfathered in under the old rules if we had a binding contract to purchase an EV before the new law was passed on August 16, 2022 (which we do by signing the agreement).

He found this interpretation in the law:

The Inflation Reduction Act offers some relief for EV buyers who have written, binding sales contracts from this year to purchase EVs that will be placed in service or delivered on, or after, August 16, 2022, or in 2023.

He is recommending we include the credit on our 2022 return and attach a copy of the binding contract. This is just my personal situation. I'm not providing any specific tax advice for anyone else here!

The issue isn't so much what the IRA says as what it doesn't say. Specifically at issue is the definition of a binding contract (which seems may be based on state level definitions) and whether the Rivian agreement and non-refundable $100 will satisfy the eventual interpretation of the IRA.

 

[Yodi]

It is my accountants understanding that I/we will be grandfathered in under the old rules if we had a binding contract to purchase an EV before the new law was passed on August 16, 2022 (which we do by signing the agreement).

He found this interpretation in the law:

The Inflation Reduction Act offers some relief for EV buyers who have written, binding sales contracts from this year to purchase EVs that will be placed in service or delivered on, or after, August 16, 2022, or in 2023.

He is recommending we include the credit on our 2022 return and attach a copy of the binding contract. This is just my personal situation. I'm not providing any specific tax advice for anyone else here!

@DTown3011, Do you know the direct source of this law interpretation? Could be helpful ... I found that statement in a Kiplinger article, but wondered if it was sourced somewhere else. Wholly respect that everyone's got to make their own interpretations. Thx!

 

[sac602]

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

and

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. "

 

[DTown3011]

@DTown3011, Do you know the direct source of this law interpretation? Could be helpful ... I found that statement in a Kiplinger article, but wondered if it was sourced somewhere else. Wholly respect that everyone's got to make their own interpretations. Thx!

There was a typo on my original post - if I take delivery in 2023 I will take the deduction on my 2023 return, not 2022.

 

[kentma]

I think if you take delivery in Jan to March of 2023, the only two new tax credit rules that applies are , MSRP cap and being Assembled in USA which Rivian R1T can qualify for (excluding income limits). The question is, do IRS care about what MSRP is on your purchase agreement, or they would go with Rivian new MSRP in 2023 which is already increased since March of 2022 regardless? Since the value of the car is at the new MSRP meaning car now worth more?

 

[freshpow]

I think if you take delivery in Jan to March of 2023, the only two new tax credit rules that applies are , MSRP cap and being Assembled in USA which Rivian R1T can qualify for (excluding income limits). The question is, do IRS care about what MSRP is on your purchase agreement, or they would go with Rivian new MSRP in 2023 which is already increased since March of 2022 regardless? Since the value of the car is at the new MSRP meaning car now worth more?

and INCOME.

 

[CharonPDX]

I think if you take delivery in Jan to March of 2023, the only two new tax credit rules that applies are , MSRP cap and being Assembled in USA which Rivian R1T can qualify for (excluding income limits). The question is, do IRS care about what MSRP is on your purchase agreement, or they would go with Rivian new MSRP in 2023 which is already increased since March of 2022 regardless? Since the value of the car is at the new MSRP meaning car now worth more?

It is the MSRP+options+accessories (but not including destination or registration fees) of your specific vehicle.

Which means yes, if you are grandfathered in to the old pricing, you can get more options and still be under the $80k; while a post-price-increase vehicle you can bump over $80k based solely on exterior color.

Note that the IRS seems to have declared that the "Binding Purchase Agreement signed before the IRA went into effect" only applies to 2022 deliveries. The relevant page on the IRS' website mentions the BPA for 2022 deliveries, but says for Jan 1 2023 or later deliveries to see the 2023 page - and the 2023 page says absolutely nothing about BPAs.

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