No tax credit for customers with binding contracts.

[JerseyGreens]

Sorry, I hit post early an was editing my post when you replied. I was meaning to say that the door that they seem to have closed is the idea that our $100 deposit will be enough to get us to qualify as a "binding purchase agreement."

The IRS punts back the definition of a binding contract to each States interpretation of case law. Don't look too much into the $100 aspect. Look into what constitutes a binding contract in your particular state.

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[Critter]

Your speaking in absolute statements.

In the most simplistic view - the IRS will give us 2023 tax guidance sometime in late 2022 for those of us that signed the BPAs but took delivery in 2023.

I guess all I would say is good luck with that. I get your point, but the fact remains it would have been incredibly simple for them to say:

If you entered a written binding contract to buy a vehicle before August 16, 2022, but took possession on or after August 16, 2022, you may claim the credit based on the prior rules.

They didn't. If it were me, I would not expect to be allowed to apply pre August 16, 2022 rules to any vehicle delivered in 2023. I'll bow out of this debate at this point - would love to be wrong, but I think the chances of you getting to tell me "I told you so" are slim to none. Would be delighted to be wrong.

 

[JerseyGreens]

I guess all I would say is good luck with that. I get your point, but the fact remains it would have been incredibly simple for them to say:

If you entered a written binding contract to buy a vehicle before August 16, 2022, but took possession on or after August 16, 2022, you may claim the credit based on the prior rules.

They didn't. If it were me, I would not expect to be allowed to apply pre August 16, 2022 rules to any vehicle delivered in 2023. I'll bow out of this debate at this point - would love to be wrong, but I think the chances of you getting to tell me "I told you so" are slim to none. Would be delighted to be wrong.

I'm not debating just sticking to the facts. The IRS does this all the time - they won't remain silent on this topic. If we get it great...if not, then I'll still be fine!

 

[lefkonj]

Binding contract or purchase after the August 22 date means no credit for a Rivian or a long list of EVs. This has been discussed at length and well known. You needed a binding contract prior to the date and there are still questions as to whether or not the IRS will accept even that.

 

[racekarl]

The IRS punts back the definition of a binding contract to each States interpretation of case law. Don't look too much into the $100 aspect. Look into what constitutes a binding contract in your particular state.

I am not nearly so sanguine, I guess. I do not expect to be able to claim this credit and won't risk it unless they specifically say that the $100 payment to Rivian is OK, since if they choose to make an issue of it the cost of fighting it would eclipse the value of the credit.

 

[Dark-Fx]

The IRS punts back the definition of a binding contract to each States interpretation of case law. Don't look too much into the $100 aspect. Look into what constitutes a binding contract in your particular state.

I've got a binding contract for Rivian and for Fisker, but the Fisker Ocean One was already binding at the time of reservation with a $5,000 non-refundable deposit. Personally I think if it applies in the case of the Fisker, it really should still apply for the Rivian.

 

[SANZC02]

If it makes you feel any better...I read it the same way. But I haven't been following much of this closely since I took delivery last year.

I read it the same way as well. I think the binding contract got you around the income limits and max vehicle price for 2022, I do not think it will be of any value in 2023.

The IRS did extend the battery rule deadline so if you meet the income and MSRP limits until the battery specs are defined you can still get the 7500 credit for 2023 or at least that is how I read it so I kept my January, 2023 vehicle price under 80 k. After the battery rules are defined seems like the 3750 credit will still be available for 2023 if you meet the MSRP and AGI limit in either 2022 or 2023 as you can use current or previous year AGI to qualify.

To me the key is keep MSRP under 80k, it is a lot easier now for pre-March pricing since a lot of the options are removed. I was able to get my Launch Green R1S with BM and dark 22s for 79k, the other config I would have taken was El Cap R1S with BM and bright 22s at 77k.

 

[SASSquatch]

Unfortunately, people have pointed to the following line in the pages you link along with related guidance from the IRS to cast doubt on the idea that "we should have no issue getting the $7,500 credit."

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

Below are links to IRS documents where they say that "significant" is somewhere above 5% of the contract value, so the total $1000 deposit we paid to Rivian would not be sufficient to qualify, to say nothing of the $100 part that became non-refundable.

Here is a quote from the press release which accompanied guidance re: the IRA EV credit:

"For tax purposes in general, a contract provision that limits damages to an amount equal to at least 5 percent of the total contract price is not treated as limiting damages to a specified amount. For example, if a customer has made a non-refundable deposit or down payment of 5 percent of the total contract price, it is an indication of a binding contract."

https://www.taxequitytimes.com/wp-content/uploads/sites/15/2022/08/EV-Guidance-8-16-2022-1.pdf

I have purchased many vehicles from BMW over the years that needed to be ordered. I have never, and I mean never, placed 5% down to secure an order of a vehicle that sometimes took a year to be manufactured, shipped, and delivered.

I have usually placed 1-2K which is much less than the 5% referenced. If this is the rule, I doubt anyone would ever qualify for any vehicle purchase.

 

[JerseyGreens]

I've got a binding contract for Rivian and for Fisker, but the Fisker Ocean One was already binding at the time of reservation with a $5,000 non-refundable deposit. Personally I think if it applies in the case of the Fisker, it really should still apply for the Rivian.

I concur.

We will glean a lot of information from folks who signed the BPAs and took delivery in 2022. Forgot to add - once they file their taxes and come back to share their Intel.

 

[Sharpobjects4321]

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.

They pulled the rug out from under us.

since this is now the #1 thread on this website, maybe you should edit your beginning comment to reflect your mistake?

 

[Chuppi]

It certainly won’t work for me with my estimate moved to 2024 now.
my car price is < 80K. I earn more than the income limit set. Can I add my younger brother to the title and let him collect the tax credit? His income is below the limit. Can anybody confirm if this is possible and if Rivian lets me do It.
Thanks

 

[Ngkgb]

since this is now the #1 thread on this website, maybe you should edit your beginning comment to reflect your mistake?

What mistake?

 

[soumak]

Do you get the full tax credit if you are purchasing the r1T at the original price below $80k? seems like that should work right? (given that you have tax liabilities, filing jointly ect).

 

[mkennedy1996]

Do you get the full tax credit if you are purchasing the r1T at the original price below $80k? seems like that should work right? (given that you have tax liabilities, filing jointly ect).

If you take delivery before they add the battery sourcing rules in March. After that, probably $3,750.

 

[Rblue]

I concur.

We will glean a lot of information from folks who signed the BPAs and took delivery in 2022. Forgot to add - once they file their taxes and come back to share their Intel.

Signed BPA prior to August 16th 2022
Took delivery in September 2022 (I realize this is implied but if anyone reads this thread next year specificity might be helpful)

We've filled out the forms and are reviewing them prior to submitting our taxes this weekend. Turbo Tax claims we're eligible for the full Federal and Colorado credits. Once we finish filing and get confirmation, I'll report back.

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