2022 vs 2023 Tax credit…Again

[JerseyGreens]

It's not looking good for those of us with binding purchase agreements who don't take delivery until this year. Here's the latest (January 31st, 2023) guidance from the IRS:

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.​

Don't know about you all but I would have taken something from the R1 shop if I knew I was going to lose my credit.

Well this is clear as day that the Binding Agreements won't hold their weight on deliveries after 12/31/2022.

Edit - I should clarify, they will still apply but the AGI and vehicle MSRP will come into play.

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[SANZC02]

It's not looking good for those of us with binding purchase agreements who don't take delivery until this year. Here's the latest (January 31st, 2023) guidance from the IRS:

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.​

Don't know about you all but I would have taken something from the R1 shop if I knew I was going to lose my credit.

Yes those were the instructions I saw a few weeks ago. I kept my vehicle under 80k (79k) and I will make sure to stay under 300 for AGI, since they delayed the battery component portion until at least March, they have said that portion will not apply to vehicles purchased prior to the definition being completed so If all other criteria is in line we should be good for the 7500. After the battery specs are defined we may still get the full 7500 depending on what they are but should still qualify for 3750 based on the other criteria.

 

[sacramentoelectric]

Well this is clear as day that the Binding Agreements won't hold their weight on deliveries after 12/31/2022.

I'm going to keep living in denial about losing the credit. Just like getting the camp kitchen, electric tonneau, Max Quad, and reasonable vampire drain.

 

[freshpow]

Well this is clear as day that the Binding Agreements won't hold their weight on deliveries after 12/31/2022.

Read it again. The part you bolded applies to purchases after 8/16. If you have a BPA you "purchased" before 8/16.

Q: If I signed a contract to purchase an electric vehicle prior to enactment of the Inflation Reduction Act (before August 16, 2022) but have not yet taken possession of the vehicle, will the changes in the Inflation Reduction Act impact my tax credit? No. If you entered into a written binding contract to purchase a qualifying electric vehicle before the date of enactment of the Inflation Reduction Act (August 16, 2022), the changes in the Inflation Reduction Act will not impact your tax credit. You may claim the credit based on the rules that were in effect before August 16, 2022. The Internal Revenue Service provides information on “written binding contract” here: https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d.

Source: Frequently Asked Questions on the Inflation Reduction Act’s Initial Changes to the Electric Vehicle Tax Credit (treasury.gov)

 

[SANZC02]

Read it again. The part you bolded applies to purchases after 8/16. If you have a BPA you "purchased" before 8/16.

Q: If I signed a contract to purchase an electric vehicle prior to enactment of the Inflation Reduction Act (before August 16, 2022) but have not yet taken possession of the vehicle, will the changes in the Inflation Reduction Act impact my tax credit? No. If you entered into a written binding contract to purchase a qualifying electric vehicle before the date of enactment of the Inflation Reduction Act (August 16, 2022), the changes in the Inflation Reduction Act will not impact your tax credit. You may claim the credit based on the rules that were in effect before August 16, 2022. The Internal Revenue Service provides information on “written binding contract” here: https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d.

Source: Frequently Asked Questions on the Inflation Reduction Act’s Initial Changes to the Electric Vehicle Tax Credit (treasury.gov)

Keep in mind the information in that answered question applies to 2022 taxes, the 2023 instructions are not out yet.

This is the paragraph that tells me no go after 1/1/2023;

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.

 

[freshpow]

Keep in mind the information in that answered question applies to 2022 taxes, the 2023 instructions are not out yet.

This is the paragraph that tells me no go after 1/1/2023;

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.

Lol. We have gone back and forth on this before. The text I referenced is not specific to 2022 taxes, but I'll admit that it is older guidance. The text you included is specific to 2022 and that's why they included the 1/1/2023 possession clause.

 

[JerseyGreens]

This makes my head hurt...They did release new guidance today:

https://www.irs.gov/pub/taxpros/fs-2023-04.pdf

I don't see anything listed about the binding agreements in the latest guidance.

Back to square one - hoping that sometime in 2023, the below wording changes from:
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.

To (living on a prayer):
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 2024, you may claim the credit based on the prior rules and disregard the assembly requirement.

 

[sacramentoelectric]

Lol. We have gone back and forth on this before. The text I referenced is not specific to 2022 taxes, but I'll admit that it is older guidance. The text you included is specific to 2022 and that's why they included the 1/1/2023 possession clause.

We all want you to be right. Let's hope the January 1st cutoff is just because they can't provide guidance for 2023. Seems unlikely to me since they do so in other instances. Either way, you're welcome to ride around my neighborhood of Denial with me in my Max Quad. It's awesome.

 

[SANZC02]

Lol. We have gone back and forth on this before. The text I referenced is not specific to 2022 taxes, but I'll admit that it is older guidance. The text you included is specific to 2022 and that's why they included the 1/1/2023 possession clause.

I am not really disagreeing, not sure what the 2023 final will be but for me I am making sure I meet the defined 2023 requirements to benefit when I file for 2023, I should be in good shape as I took delivery last week with a 79k MSRP.

Several people have talked about filing an amended 2022 after they take delivery. I think the highlighted portion in my previous post clearly states you cannot take the deduction for 2022 if delivered after 1/1/2023.

 

[Jac]

Lol. We have gone back and forth on this before. The text I referenced is not specific to 2022 taxes, but I'll admit that it is older guidance. The text you included is specific to 2022 and that's why they included the 1/1/2023 possession clause.

@freshpow, with my latest 1H 2024 Rivian delivery estimate I have LOTS of time to see whether my pre-August 16, 2022 binding purchase agreement will be accepted when I file my 2024 tax year return in 2025. ?

 

[freshpow]

We all want you to be right. Let's hope the January 1st cutoff is just because they can't provide guidance for 2023. Seems unlikely to me since they do so in other instances. Either way, you're welcome to ride around my neighborhood of Denial with me in my Max Quad. It's awesome.

I am riding shotgun! Not counting on the credit but I'm more optimistic than most. Conceptually, they are saying that the BPA means you purchased prior to 8/16. That concept doesn't change with the calendar year.

 

[Matt D.]

Keep in mind the information in that answered question applies to 2022 taxes, the 2023 instructions are not out yet.

This is the paragraph that tells me no go after 1/1/2023;

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 we all get what we want and the BPA is valid, do we amend our 2022 taxes as that’s the “purchase date” or does the tax credit apply in 2023 for the “delivery date”?

 

[sacramentoelectric]

I am riding shotgun! Not counting on the credit but I'm more optimistic than most. Conceptually, they are saying that the BPA means you purchased prior to 8/16. That concept doesn't change with the calendar year.

No way, man. You're driving!

 

[SANZC02]

If we all get what we want and the BPA is valid, do we amend our 2022 taxes as that’s the “purchase date” or does the tax credit apply in 2023 for the “delivery date”?

To me it looks like when you put it in service is the key date.

 

[DTown3011]

Keep in mind the information in that answered question applies to 2022 taxes, the 2023 instructions are not out yet.

This is the paragraph that tells me no go after 1/1/2023;

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.

Nice to see the IRS update some guidance today. I don't agree with your assessment. It still does not specifically address formally anyone that signed a BPA BEFORE August 16th and took delivery AFTER Jan 1, 2023. This group is omitted and there is no guidance provided.

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