IRS Transition rule guidance changed

[riviantogo]

It was pointed out to me that the IRS changed their 2022 page about the transition rule. It appears as though they expect anyone claiming the tax credit under the transition rule to claim the credit against their 2022 taxes.

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

That's a good pickup. But then do you think they mean to include vehicles put into service in 2023? Even though they removed that language, their form still asks for the date that the vehicle entered service. Do they give a tax credits on a vehicle you haven't paid for? Possibly, if you take delivery before you file your 2022 taxes, they would allow it. What do you think their intent is here?


Form 8936(Rev. January 2023)
Department of the Treasury
Internal Revenue Service
Qualified Plug-in Electric Drive Motor Vehicle Credit
(Including Qualified Two-Wheeled Plug-in Electric Vehicles and New Clean Vehicles)
Attach to your tax return.
Go to www.irs.gov/Form8936 for instructions and the latest information.
OMB No. 1545-2137
Attachment
Sequence No. 69
Name(s) shown on return Identifying number
Note: This credit is for qualified plug-in electric drive motor vehicles placed in service before 2023, qualified two-wheeled plug-in
electric vehicles acquired before but placed in service in 2022, and new clean vehicles placed in service after 2022. See separate
instructions for vehicle definitions and other requirements.
Part I Tentative Credit
Use a separate column for each vehicle. If you need more columns,
use additional Forms 8936 and include the totals on lines 12 and 19. (a) Vehicle 1 (b) Vehicle 2
1 Year, make, and model of vehicle . . . . . . . 1
2 Vehicle identification number (see instructions) . . 2
3 Enter date vehicle was placed in service (MM/DD/YYYY) 3
4a If the vehicle is a two-wheeled vehicle, enter the cost of
the vehicle. If the vehicle has at least four wheels, see
instructions . . . . . . . . . . . . . . 4a
b Phase-out percentage (see instructions) . . . . . 4b % %
c Tentative credit. Multiply line 4a by line 4b . . . . 4c

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[Dark-Fx]

That's a good pickup. But then do you think they mean to include vehicles put into service in 2023? Even though they removed that language, their form still asks for the date that the vehicle entered service. Do they give a tax credits on a vehicle you haven't paid for? Possibly, if you take delivery before you file your 2022 taxes, they would allow it. What do you think their intent is here?

Instructions on the form from here: https://www.irs.gov/instructions/i8936

Line 3
Enter 08/15/2022 if you qualify and elect to apply the transition rule discussed below.

Transition rule.

If you purchased, or entered into a written binding contract to purchase, a qualified plug-in electric drive motor vehicle after 2021 and before August 16, 2022, you may elect to treat such vehicle as having been placed in service on August 15, 2022, the day before the enactment date of the Inflation Reduction Act of 2022.

 

[riviantogo]

Instructions on the form from here: https://www.irs.gov/instructions/i8936

Then that's how anyone with a binding agreement will need to file.

Thanks for the clarification.

 

[SeaGeo]

This still does not solve the Date Acquired being earlier than the Date Placed in Service, but Im thinking that the solution may be to use 08/15/22 for both

I am not a CPA but I would use the date on your BPA as "Date Acquired" and 8/15/22 as the "Date Placed in Service".

Idk, I'm guessing either is fine and keep your receipts. If you get audited you have your paperwork to back it up and explain it to the IRS.

 

[Hilbe]

So I have a BPA signed, within the AGI/80k limits, and taking delivery July-Sept 2023 supposedly. Would I amend my 2022 tax return after delivery OR claim it on 2023? I have no other EV purchases to claim.

 

[DTown3011]

Rivian just sent the following email:

The IRS has released guidance on how taxpayers with valid written binding contracts signed on or before August 15, 2022 can claim the original EV tax credit—without restrictions on vehicle MSRP, buyer income, and manufacturing requirements—even if they don’t take delivery of the vehicle until 2023 or later. To claim this credit, you can use Form 8936. Here are the Instructions and IRS Guidance. Please note two key considerations:​

​ From the Guidance: “To elect the credit under the prior rules you must elect the credit on your 2022 tax return after you take delivery of the vehicle. Depending on the date the vehicle is delivered, you can claim the credit on your original, superseding, or amended 2022 tax return.”​ ​ From the Instructions: “Taxpayers who took delivery in 2023 or after must use August 15, 2022 as the date placed in service when filing out Form 8936.”​

More information can be found at the Support Center. As a reminder, ultimate eligibility for tax credits is determined by the IRS. We recommend you consult with a tax professional for questions about your specific situation. If you have any further questions please don’t hesitate to reach out. We’re always here to help.​

 

[909phillyman]

FYI, just received this info from Rivian regarding the tax credit...

 

[lalettan]

This mean...Even if vehicle price is above80K and Combined income > 350K, we still get tax credit ?

 

[DTown3011]

This mean...Even if vehicle price is above80K and Combined income > 350K, we still get tax credit ?

If you signed a BPA pre-Aug 15, then yes.

 

[DuoRivians]

Oh yeah!

 

[DuoRivians]

Who canceled their Rivian orders after signing a binding purchase agreement? Haha

 

[Dark-Fx]

Who canceled their Rivian orders after signing a binding purchase agreement? Haha

At least a couple people claim they did since they were adamant they didn't qualify anymore under previous guidance. I tried my best to convince them they were and the IRS was ultimately going to either revise the guidance or issue new guidance for next tax year, but horses and water don't mix.

 

[JerseyGreens]

Where are all of those CPAs that were acting like ambulance chasers arguing with me...??

?

 

[SANZC02]

At least a couple people claim they did since they were adamant they didn't qualify anymore under previous guidance. I tried my best to convince them they were and the IRS was ultimately going to either revise the guidance or issue new guidance for next tax year, but horses and water don't mix.

In reality, if people needed the tax credit to get the vehicle it probably is a good thing they canceled. Just not prudent to strain your budget to get into one of these.

 

[Dark-Fx]

Where are all of those CPAs that were acting like ambulance chasers arguing with me...??

?

Sorry, I fired them all

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