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ITC eligibility - install date vs. purchase date

Discussion in 'Tesla Energy' started by astrorob, Dec 18, 2020.

  1. astrorob

    astrorob stealth performance M3

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    this seems like it would be a FAQ but i didn't find anything searching the forum. apologies in advance for bad-google fu.

    anybody know what date the IRS uses for ITC eligibility? i put a deposit down on 2x powerwalls in november 2019. the powerwalls were not installed until november 2020. it looks increasingly like final inspection won't happen until early 2021 at this point, thus i won't be paying the balance until 2021.

    obviously i want to take the 26% ITC for 2020 instead of the 22% for 2021. anyone have experience with whether or not the IRS would push back against a 2020 ITC claim in this situation? tesla tells me the IRS considers the relevant date as when the equipment was "put into service" which is clearly 2020. but of course they would say that in an effort to head off my trying to get them to refund me 4%.

    thanks
     
  2. wjgjr

    wjgjr Member

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    There are a number of discussions of this if you search through the forum, but I think the reason there is no FAQ about it is there really isn't a definitive answer that can be given, other than talk to your tax advisor. I think a number of people (myself included) would feel that installation is all that is required to meet the "put into service" threshold, but I am not aware of any official IRS statement that gets into the distinctions between installed/inspected/PTO.
     
  3. h2ofun

    h2ofun Active Member

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    I was told on various projects I have done that the complete payment was a must. So, I did this on a few things even though things were not 100% done.
     
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  4. ucmndd

    ucmndd Well-Known Member

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    The IRS, should they come asking in the form of an audit, will generally want proof you PAID and realized the expense in the year you are claiming the tax credit.

    If I were you I’d either pay the balance now, or backdate the check to Dec 30 whenever you do. ;)
     
  5. jboy210

    jboy210 Supporting Member

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    I talked to my accountant this week about these issues and she also tied it to when you pay.
     
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  6. astrorob

    astrorob stealth performance M3

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    i doubt i'll get audited as my taxes are very very straightforward and anyway enforcement has been completely decimated.

    when i bought a leaf in 2011, i claimed the EV credit and they sent me a letter, wanting to see the purchase agreement as loads of people were trying to claim the credit against F-150s and stuff. no audit, just proof.

    i def don't want to pay this year as that means i'll have paid before it's been inspected and if i have problems with that tesla will probably just disappear.

    based on those threads, it sounds like there are 2 schools of thought so given that its only 4% and the worst thing that can happen is they reject it, i'll probably just claim it for 2020.
     
  7. wjgjr

    wjgjr Member

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    Normally, I would agree that payment is a must, and it still makes sense to try and pay this year, if possible. That said, the instructions for form 5695 (https://www.irs.gov/pub/irs-pdf/i5695.pdf) read:

    (There are exceptions to the above for new construction or reconstruction where you are not in the house. Also, as of posting, these are still for the 2019 form - not sure when the 2020 version will be out.)
     
    • Informative x 2
  8. astrorob

    astrorob stealth performance M3

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    this is what the one-pager from DOE that tesla sent me implies - the language "placed in service" is used, but of course DOE is not Treasury.
     
  9. getakey

    getakey Member

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    My understanding is operational. Payment and PTO do not matter
     
  10. mjptech

    mjptech Being cyberbullied by TMC users PhilDavid + DCEV

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    It's for sure not based on payment - if you're getting a loan for it (through Tesla, at least), you don't start paying until a couple of months after it's up and running (according to them), and it's a loan, so, you won't be paying it all up front.

    I'm in a crunch right now since Tesla has dropped the ball (had to call the general number as my advisor's mailbox is always full), however, many of us did get an e-mail from Tesla mid last month stating that will cover the 4% difference on the credit should Tesla be unable to install before December 31st, so, it's definitely based on installation date.

    [​IMG]
     
  11. astrorob

    astrorob stealth performance M3

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    interesting - i wondered about that. as mentioned above i ordered in late 2019 and had heard of some people in a similar situation (bumped to 2020) where tesla covered the 4% drop from 30-26%. however it sounds like from tesla's standpoint the installation is also the trigger as this was not offered to me; it almost seems a certainty now that inspection won't occur until 2021.

    related, i got an email yesterday telling me it was time to pay. i forwarded that to my adviser and just said that i couldn't do that as it hasn't passed inspection. he said that he'd tell the finance side that the project was not actually complete. hopefully this is just a bug in their system.
     
  12. charlesj

    charlesj Member

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    Famous last words. ;):D
    Yes, enforcement was decimated but most of the audits are for the higher/middle class and poor, not the rich as it is more complex in that category. :)
     
  13. astrorob

    astrorob stealth performance M3

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    they ain’t gonna audit over a tax credit... if i was self employed i might be worried about it but that’s not the case. seriously my taxes are 1040EZ level besides this credit.
     

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