IRS Transition rule guidance changed

[EarlyAdptr]

Let's say you paid 10k in taxes and your tax computation after deductions and before credits is 10k. Now let's say your only credit is the 7500 EV credit-- the IRS doesn't get you a check for 7500, right? That's my understanding or am I totally wrong...
[/QUOTE

I think you're confusing the "tax liability" with taxes due at filing. Taxes due (or refund) at Filing is essentially the difference between your tax liability and any taxes you've paid to date (through pay check withholding or estimated payments).

With the amended return, you've already paid for a higher tax liability as now calculated in the amended return with the R1 tax credit. Since the filer already paid the full (higher) tax liability - the government needs to cut a check. But it's really just a refund for the excess taxes paid.

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[jollyroger]

Just filed an amended turbotax return for our R1S delivered this week, taxes already filed, and binding agreement signed in august. It was pretty simple, told them to do an amended return, and added an electric vehicle, Rivian was on the list. 08/15/22 was the aquire and delivery date via the IRS instructions. Added the curb weight and pack.

It showed me $7500, but my refund dropped to $7290 because of "other deductions that might not qualify me for the whole amount" ... not sure if this was because of a credit I got for a level 2 home charger I installed last year or something else. Was nice that you can efile with no additional cost.

That's probably what it was. The 7500 credit can reduce your liability below the Alternative Minimum Tax and the EV charging credit uses that number instead of what the 7500 credit reduced yours to. I got burned by that too.

Sorry but what happened here? I just had the wiring redone to accommodate the higher charge rate the Rivian supports. I have the Binding Purchase Agreement but thought I don't need to use it since we are both under the income limits and the truck wound up being less than 80k, I could just take the rebate for the 2023 year.

But if the electrical work somehow reduces the rebate of the truck. I'm wondering if I should use the BPA for this year (even though it was delivered in Feb this year 2023) so I get the full credit this year, and then just do the electrical credit next year.

Maybe this has something to do with the Alternative Minimum tax? I've never needed to worry about that.

 

[Freddie]

Sorry if this is already covered, did not go through the thread - one gray area is around the $100 non refundable deposit towards binding contract, does it make it significant?


What is a written binding contract?
In general, a written binding contract :

• is enforceable under state law, based on the state and relevant facts and circumstances, and
• does not limit the damages a buyer or seller can receive for a breached contract, such as forfeiting a deposit or paying a pre-determined dollar amount or a percentage of the total contract price for the vehicle.

An indication of a binding contract is if a buyer has made a significant non-refundable deposit or down payment.

 

[Autolycus]

Sorry if this is already covered, did not go through the thread - one gray area is around the $100 non refundable deposit towards binding contract, does it make it significant?


What is a written binding contract?
In general, a written binding contract :

• is enforceable under state law, based on the state and relevant facts and circumstances, and
• does not limit the damages a buyer or seller can receive for a breached contract, such as forfeiting a deposit or paying a pre-determined dollar amount or a percentage of the total contract price for the vehicle.

An indication of a binding contract is if a buyer has made a significant non-refundable deposit or down payment.

Definitely been discussed. Several times. Look through the other threads on the BPA, the tax credit, etc. Wish I had time to point you to the specific sections of the various threads, but I do not at the moment. But yes, it's been discussed a lot. Good searches will find it for you.

 

[Siva]

Sorry if this is already covered, did not go through the thread - one gray area is around the $100 non refundable deposit towards binding contract, does it make it significant?


What is a written binding contract?
In general, a written binding contract :

• is enforceable under state law, based on the state and relevant facts and circumstances, and
• does not limit the damages a buyer or seller can receive for a breached contract, such as forfeiting a deposit or paying a pre-determined dollar amount or a percentage of the total contract price for the vehicle.

An indication of a binding contract is if a buyer has made a significant non-refundable deposit or down payment.

As Autolycus said, it's been debated and I don't think we know for sure Rivian binding agreement will stand the test if IRS wants to scrutinize strictly. Whoever signed it and got delivery are applying for tax credit and are getting the credit. If IRS thinks in future that Rivian binding agreement doesn't qualify they may ask us to payback. I doubt that will happen.

 

[jeeden]

As an update I filed via TurboTax the second week of March. Says it was processing my ammended return until last week. Once I hit that mark it said it was updating my return and any refunds.

Today we got to check in the mail for the exact amount of $7425. We had originally filed electronically and gotten our refund electronically but I heard somebody else say they got their amended refund via a paper check so it wasn't exactly a shocker.

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