If you have a non refundable deposit on the car along with a signed sales agreement that occurred prior to President Biden signing the law into effect, don’t you have all of 2023 in order to take delivery?

 

Unfortunately none of us know ANYTHING about how the exact language of this confusingly worded law will be interpreted and applied by the IRS come tax filing time next year. We are all completely at their mercy when it comes to claiming the full EV tax credit on a purchase being made during the ambiguous in between period.

 

And I'm sure one of the 87K new IRS agents will be happy to explain it to you....

 

​​​​​​... In the form of an unwanted surprise IRS audit 👎🏽

 

Something tells me that there might be a few IRS clarifications coming out in the next few months. Maybe Joe Manchin can help explain it.

 

EV tax credits just got totally revamped. Here's what car buyers need to know

 

With all the emphasis on reducing combustion engines to effect improvement in climate change, this bill will not help and most likely will hurt some of us on the fence about buying an EV. Stupid thinking by some stupid people in congress. Time for change.

 

You are absolutely correct. When tax legislation is passed it always contains ambiguous language. This language is then interpreted by the IRS and published as a "Technical Correction Act". Often times, the technical corrections are quite different from the legislation. For example, the original legislation creating the PPP program was silent as to taxability on the forgiveness. The IRS interpreted the forgiveness as a taxable event. It took new legislation to move the IRS off that position.

Unfortunately, the EV credit is no longer available for Porsche as the MSRP must be less than $55k for cars and $80k for SUV's. The transition rule will largely be governed by what constitutes a "binding contract", which is state driven. Perhaps the industry will lower MSRP's and we will all pay a market driven price, which is what we are doing now anyway. I can see it now, a Taycan with an MSRP of $40K, and a market driven price of $140K.

 

I want a text credit for buying an EV, no question. But at a high level, the new limits on the tax credits make sense:

No more 200K units cap. Great.
Partial credit for used cars. Great.
No credit if you make a ton of money. Prevents wealth transfer to those who don't need it and won't prevent us relatively wealthy folks from going EV
No credit for expensive vehicles. Same, though I wish the cap was a bit higher and that the benefits slowly faded instead of simply disappearing at $55K/$80K, since $55K doesn't buy much of an EV these days
Assembled in the US requirement. Sounds like protecting US producers, not promoting EV adoption. Sad face.
US derived batteries. Again sounds like protecting US producers, not promoting EV adoption. Sad face.

 

So when does the $150K income limitation kick in? Is it now or after 2022? Is it AGI or total income from all sources?

 

Starts for cars purchased in 2023. The $150k income limit is for single filers, $225k for head of household, and $300k for married filing jointly.

https://www.thedrive.com/news/heres-...cle-tax-credit

I'm pretty happy the bill removed the 200k vehicle cap. It was pretty unfair to the early adopters (i.e., Tesla and GM).

 

I guess it doesn't matter because I was looking at the Audi e-Tron GT and Audi says none of their cars now qualify even in 2022 except the Q5 Hybrid. But the income limit is just more class warfare from the Dumbocrats, it is their bread and butter.

 

What if it is not an individual purchasing the EV? But an LLC or C corp?

Do the income limitations still apply?

 

The intent is to make everyone a criminal. If your politics don't align, you'll be painted as a dirt bag charged with tax evasion.