Discussion : All discussion regarding Model 3 and Tax credit in model 3 subforum

[ElectricIAC]

This forum has a totally different take on how the rule changes take effect. On the Ionic 5 forums, the consensus was that if you had a purchase agreement, and a VIN, because a vin was needed for a purchase agreement, you were grandfathered under the previous $7500 credit even if your vehicle was delivered after the new green act took effect. This was even reiterated by Hyundai USA as a letter to all their dealers. I see my deposit as a purchase agreement, and once I get a VIN I meet all the criteria that the Ionic 5 purchasers did when they were trying to beat the bill signing date a few months ago. To me if I meet those 2 criteria, I would qualify for the credit even if my Model 3 is delivered after the bill is signed. I'm not saying one is right and one is wrong, but one does have the backing of Hyundai behind it. Tesla told me to go to the IRS website for clarification... They aren't really giving any guidance whatsoever.

Credits for new electric vehicles purchased in 2022 or before | Internal Revenue Service

If you bought or leased a new, qualified plug-in electric vehicle (EV) in 2022 or before, you may be eligible for a clean vehicle tax credit up to $7,500 under IRC 30D.

www.irs.gov

You don’t have a deposit, you paid an order fee.

 

[MP3Mike]

I see my deposit as a purchase agreement, and once I get a VIN I meet all the criteria that the Ionic 5 purchasers did when they were trying to beat the bill signing date a few months ago.

Unlikely. You don't have a binding contract. The main thing you are missing is that you haven't made a "significant non-refundable deposit or down payment."

You don’t have a deposit, you paid an order fee.

That, and even if it was, it isn't significant. (In terms of the purchase price.)

 

[MacO512]

This forum has a totally different take on how the rule changes take effect. On the Ionic 5 forums, the consensus was that if you had a purchase agreement, and a VIN, because a vin was needed for a purchase agreement, you were grandfathered under the previous $7500 credit even if your vehicle was delivered after the new green act took effect. This was even reiterated by Hyundai USA as a letter to all their dealers. I see my deposit as a purchase agreement, and once I get a VIN I meet all the criteria that the Ionic 5 purchasers did when they were trying to beat the bill signing date a few months ago. To me if I meet those 2 criteria, I would qualify for the credit even if my Model 3 is delivered after the bill is signed. I'm not saying one is right and one is wrong, but one does have the backing of Hyundai behind it. Tesla told me to go to the IRS website for clarification... They aren't really giving any guidance whatsoever.

Here's the link to the previous credit guidelines. I don't see why this round of changes would be any different. Credits for New Electric Vehicles Purchased in 2022 or Before | Internal Revenue Service

The Ioniq 5 and many other EVs (Rivian over 80k, ID4, etc) got the credit under the old law. The old law was replaced when the IRA took effect, unless you had a nonrefundable order. Tesla no longer did qualify as they exceeded the 200k vehicle limit on the old law. Having a nonrefundable (even $100) without a VIN allows those purchasers to claim the old tax credit anytime in the future that an order gets delivered.

So those Ioniq owners are correct if they had an order last year in place before the IRA took effect, they can still get the credit. This would provide zero benefit to a Tesla owner as the old credit was and is no longer available to Tesla purchasers.

 

[Irpilot]

The Ioniq 5 and many other EVs (Rivian over 80k, ID4, etc) got the credit under the old law. The old law was replaced when the IRA took effect, unless you had a nonrefundable order. Tesla no longer did qualify as they exceeded the 200k vehicle limit on the old law. Having a nonrefundable (even $100) without a VIN allows those purchasers to claim the old tax credit anytime in the future that an order gets delivered.

So those Ioniq owners are correct if they had an order last year in place before the IRA took effect, they can still get the credit. This would provide zero benefit to a Tesla owner as the old credit was and is no longer available to Tesla purchasers.

Yeah you totally misunderstood what I was trying to get at.... Was trying to complete it with to the current Tesla federal rebate. I know how the Ionic 5 rebate worked.

 

[wildm3p]

need some help again!

we will be purchasing a MYP under my partner and have some questions

i'm not eligible for the tax credit, partner is

if we were to trade in my car to tesla (mine, paid off) towards the cost of my partner's MYP, will my partner still be eligible for the tax credit?

 

[Enright]

need some help again!

we will be purchasing a MYP under my partner and have some questions

i'm not eligible for the tax credit, partner is

if we were to trade in my car to tesla (mine, paid off) towards the cost of my partner's MYP, will my partner still be eligible for the tax credit?

Trade ins should have no impact on the tax credit - however, your partner will probably have a challenge trading in a car they do not own. Most dealers (not sure about Tesla) require the buyer to own the car they are trading in (for obvious reasons).

During the ordering process - Tesla requires you to take a photo of the title of the car you are trading in - and you are likely to run into problems when the name on the title doesn’t match the buyers name. There might be a workaround for this, since it a common situation - worth asking about before starting the process.

 

[Enright]

It doesn't impact the model 3, but just FYI - the IRS clarified the SUV definitions today:

Treasury lifts EV tax credit confusion over SUV price cap

Tax credit rules for crossovers and SUVs, and whether the $80,000 price cap applies, are much clearer with new guidance: What is an SUV? Look at the EPA info on the window sticker.

www.greencarreports.com

Therefore making ALL model Ys eligible, even the MY Performance - which previously didn't qualify because it was over $55k AND could not be configured with 7 seats. The change is also retroactive to Jan 1st - which is interesting.

So you can now have any color you like on the Model Y, but you are still donating $7,500 to the federal government for the privilege of having a red car if you order the Model 3 and qualify for the tax credit.

 

[galimpic]

Did all of you who bought a tax credit eligible Tesla since 1/1/23 get the form mentioned here?

Q7. What information does a seller have to provide to a taxpayer purchasing a new clean vehicle to allow the taxpayer to
claim the new clean vehicle credit? (added December 29, 2022)
A7. A seller must provide the following information on a report to the taxpayer and to the IRS:
• Name and taxpayer identification number of the seller
• Name and taxpayer identification number of the taxpayer
• Vehicle identification number of the new clean vehicle
• Battery capacity of the new clean vehicle
• Verification that the taxpayer is the original user of the new clean vehicle
• The date of the sale and the sales price of the vehicle
• Maximum credit allowable for the new clean vehicle being sold
• Forsales after December 31, 2023, the amount of any transfer credit applied to purchase
• A declaration under penalties of perjury from the seller
For further details see Revenue Procedure 2022-42.
Q8. When must the seller provide the report to the taxpayer? (added December 29, 2022)
A8. The seller must provide the report to the taxpayer not later than the date the vehicle is purchased. For further details
see Revenue Procedure 2022-42.

 

[MacO512]

Yeah you totally misunderstood what I was trying to get at.... Was trying to complete it with to the current Tesla federal rebate. I know how the Ionic 5 rebate worked.

The nonrefundable purchase agreement was spelled out as a way to claim old tax credit when new IRA was signed and became law. The March IRA new rules taking effect and possibly changing the Tesla credit is a different change, it's issuance of Treasury guidelines, not a newly signed law, and will not follow a similar transition.

 

[MacO512]

Did all of you who bought a tax credit eligible Tesla since 1/1/23 get the form mentioned here?

Q7. What information does a seller have to provide to a taxpayer purchasing a new clean vehicle to allow the taxpayer to
claim the new clean vehicle credit? (added December 29, 2022)
A7. A seller must provide the following information on a report to the taxpayer and to the IRS:
• Name and taxpayer identification number of the seller
• Name and taxpayer identification number of the taxpayer
• Vehicle identification number of the new clean vehicle
• Battery capacity of the new clean vehicle
• Verification that the taxpayer is the original user of the new clean vehicle
• The date of the sale and the sales price of the vehicle
• Maximum credit allowable for the new clean vehicle being sold
• Forsales after December 31, 2023, the amount of any transfer credit applied to purchase
• A declaration under penalties of perjury from the seller
For further details see Revenue Procedure 2022-42.
Q8. When must the seller provide the report to the taxpayer? (added December 29, 2022)
A8. The seller must provide the report to the taxpayer not later than the date the vehicle is purchased. For further details
see Revenue Procedure 2022-42.

No I did not.

That's Tesla and IRS problem, taxpayer responsibility is to correctly claim the credit on their tax return.

 

[weidmao]

I am very confused if my 2022 Model qualified for $7500 tax credit. In IRS Form 8936, the Phaseout percentage for 2022 Tesla is 0. Then no credit . but the following link says 2022 model Y is eligible. Can anybody help? Thanks.

IRS says California, most state tax rebates aren't considered taxable income

The tax agency had previously asked taxpayers in those states to hold off on filing their returns until the issue was resolved.

www.cbsnews.com

 

[jjrandorin]

I am very confused if my 2022 Model qualified for $7500 tax credit. In IRS Form 8936, the Phaseout percentage for 2022 Tesla is 0. Then no credit . but the following link says 2022 model Y is eligible. Can anybody help? Thanks.

IRS says California, most state tax rebates aren't considered taxable income

The tax agency had previously asked taxpayers in those states to hold off on filing their returns until the issue was resolved.

www.cbsnews.com

Very very definitively, "No, not unless you bought it brand new from Tesla after Jan 1 2023".

 

[Clover]

If you bought it in 2022, it was not part of the new act thet went into effect on January 1, 2023. It does not really matter the model year. It matters when you bought it. In 2022, Tesla had exhausted the credits available under the old law and no Tesla's were eligible.

 

[discodanman45]

California people, it is official! Back on the CVRP!

Eligible Vehicles | Clean Vehicle Rebate Project

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cleanvehiclerebate.org

 

[GoHawks29]

I placed an order for a M3 LR in a couple of weeks ago and I'm seeing an EDD of March 15th. However, with the updated guidelines expected to come out from the Treasury in March, what's the likelihood that Model 3 qualifies for the full $7500?

From my understanding, there's two $3750 credits that make up the $7500 and even after the guidelines are updated with regards to mineral sourcing, Teslas can still qualify for 1 of the 2 credits (battery manufactured in North America) which would be good for at least $3750. With that being said, there was an announcement earlier in the month which allowed more Model Y's to be eligible which no doubt lead to an increase in orders, many of which won't be delivered until March and beyond. I can't be the only one who thinks that the Treasury wouldn't just suddenly update their guidelines in March and make all of those recent orders lose $3750-$7500 of credit value, right? Is there a single EV in North America, Tesla or not, that would qualify for the full $7500 after the guidelines are updated? Wouldn't this have to be phased in gradually as supply chains and sourcing requirements/logistics are figured out for all these EV manufacturers? Maybe I'm just overthinking it but it's tough for me to believe that they would slash the credits in half given how many orders have been placed in the last couple of weeks.

With regards to my M3 LR, assuming the credit guidelines are updated in March, how much should I expect to have if they really do go ahead and update the guidelines?

Any thoughts, knowledge or additional information regarding this?

 

[Clover]

I placed an order for a M3 LR in a couple of weeks ago and I'm seeing an EDD of March 15th. However, with the updated guidelines expected to come out from the Treasury in March, what's the likelihood that Model 3 qualifies for the full $7500?

From my understanding, there's two $3750 credits that make up the $7500 and even after the guidelines are updated with regards to mineral sourcing, Teslas can still qualify for 1 of the 2 credits (battery manufactured in North America) which would be good for at least $3750. With that being said, there was an announcement earlier in the month which allowed more Model Y's to be eligible which no doubt lead to an increase in orders, many of which won't be delivered until March and beyond. I can't be the only one who thinks that the Treasury wouldn't just suddenly update their guidelines in March and make all of those recent orders lose $3750-$7500 of credit value, right? Is there a single EV in North America, Tesla or not, that would qualify for the full $7500 after the guidelines are updated? Wouldn't this have to be phased in gradually as supply chains and sourcing requirements/logistics are figured out for all these EV manufacturers? Maybe I'm just overthinking it but it's tough for me to believe that they would slash the credits in half given how many orders have been placed in the last couple of weeks.

With regards to my M3 LR, assuming the credit guidelines are updated in March, how much should I expect to have if they really do go ahead and update the guidelines?

Any thoughts, knowledge or additional information regarding this?

The treasury could care less how many orders there are and even if they did, that's not going away anytime soon on any of the competitive EVs. They already threw people and companies a bone by delaying the full mandate until March. The truth is that there is not a single company that sources half its battery materials from North America. If anyone qualifies, it will be the new Ys that have the updated 4680 battery but I doubt they qualify once the guidelines are announced. No, the drafters of this provision did not want all cars to fully qualify for $7,500 right away. Once those guidelines come out, I expect all EV credits to drop to $3,750 max. They could kick the can further down the road, but the optics of that are not great so I would not expect it.

 

[GoHawks29]

The treasury could care less how many orders there are and even if they did, that's not going away anytime soon on any of the competitive EVs. They already threw people and companies a bone by delaying the full mandate until March. The truth is that there is not a single company that sources half its battery materials from North America. If anyone qualifies, it will be the new Ys that have the updated 4680 battery but I doubt they qualify once the guidelines are announced. No, the drafters of this provision did not want all cars to fully qualify for $7,500 right away. Once those guidelines come out, I expect all EV credits to drop to $3,750 max. They could kick the can further down the road, but the optics of that are not great so I would not expect it.

Very true. It just seems baffling to me that they want the battery sourcing credit to take effect now in 2023, what is the point of that if 0 cars qualify for it? Wouldn't it make more sense to announce that it takes place in 2024 onwards to give these companies time and give people more clarity that there's only one $3750 credit that will be applicable for purchases this year? Would immensely help both companies and potential buyers that are clueless as to how March is going to play out. I don't understand the whole "up in the air" mystery the IRS currently operating with in regards to these credits.

 

[introkevin]

Hey, I’ve been looking to buy a Model 3 Tesla before the end of the tax exemption (exp march 2023 - this month)

But I am curious to know if I buy one right now will I receive HW4? I’m hearing that HW3 won’t be able to upgrade to it. And if so is it worth waiting and missing out on the $7500 credit tax exemption.

It’s a really tough decision and I’m not sure what to do. I have very limited time.

 

[Clover]

No model 3's have HW4 and I would be shocked it they had it anytime soon. Musk said on the Q3 earnings call that Cybertruck would get it first, though it looks like some X's might have it. If you buying the car for autopilot it might be worth waiting for, but that sure was not something I'm interested in paying thousands extra for.

If you are interested in one before the treasury issues guidance, you better snap one that shows up in inventory quick. Those are commonly not actually in inventory and have over a one week or even longer wait often. The cars ordered now likely have a 7-8 week wait.

 

[Mr.Stark]

Are you supposed to let the SA know during delivery that you intend to apply for the EV tax credit? Does the dealer need to let IRS know about this sale? Or is it just all on me while filing the return.

I picked up my M3 yesterday and totally forgot about the tax credit due to excitement.