Tax credit 2023 [The tax credit discussion thread]

[rickybobbee]

prices are going down real soon. People don't have the pandemic time and money to play with anymore. Elon ordered all twitter employees.....that are "still left" to return to the office, interest rates, layoffs etc..........world is primed for a correction and supply will outweigh demand in early 2023 when reality sets in

 

[honkbahh]

Then you have to meet the income requirements. Then you have to actually owe that amount on Federal tax return. So say the car qualified for $7500. If you only owe $4000 on your taxes you will only get $4000 not the full $7500. So you need to owe $7500 or more to even get the full credit (assuming the car even qualifies).

It boggles my mind how someone could afford a Tesla yet not have a federal tax liability of 7.5k.

 

[hakunamattata]

December 30th is safe. Anything before and they will hand you someone's cancellation.

Global slowdown. see attached. Mass layoffs in tech. Those are the biggest Tesla buyers.

Tesla is lowering prices outside of US already. MY is almost $20k cheaper elsewhere already. Don't see how they would increase prices. Also good % of Tesla buyers don't qualify for Tax credit. What do u think will happen to them?

Just as a reference in 2020 I had placed my order on December 14th, got VIN assigned within a day and took delivery on December 22nd. Given the year end rush they were doing almost 100 car deliveries per day per service center. We have four service centers in NJ.

I agree anything after December 26th is safe as you can push the delivery out by a week.

Also my concern is what date the MVPA will have the order date or actual delivery date. Again back in 2020 for NJ rebate they had used the order date on MVPA. I tried reading the criteria on IRS's website for cars purchased between Aug 16th and Dec 31st and was confused on the verbiage. Any feedback will be appreciated.

 

[vickh]

It boggles my mind how someone could afford a Tesla yet not have a federal tax liability of 7.5k.

I agree. only exceptions would be retirees with high assets, but low income or those who are big savers (rare)

 

[vickh]

Looks like CR is shooting down my quest for a PHEV or EV, but they endorse hybrids.

MSN

 

[Kokukenji]

Looks like CR is shooting down my quest for a PHEV or EV, but they endorse hybrids.

MSN

The industry is facing a look in the mirror moment. The minute you invest fully into EV, you basically set a death clock for your ICE product line. This includes not just the product itself but all the people/resources/etc. I think that's why it's hard to go full in if you're a current ICE manu.

Then there's the new brand doing all EV, they are still learning and with said learning curve there will be failures.

With Tesla, I think Tesla owners and those that like the brand are borderline done with the brand. Tesla no longer have the excuse of trying to be different so please look beyond our flaws since they have been at it for years by now. With new entries into the EV world being sometime cheaper and yet better in quality/fit/finish, people are just expecting more from the brand that took us here in the first place. We're talking about over 10 years, you can't keep saying that we're still trying after 10 years. Some people would have 2 cars within the 10 year span and if they are a Tesla loyalist to begin with and decides to purchase their 2nd Tesla 10 years later only to be greeted by the same protocol of going through a checklist from random webpage/github looking for panel gaps, well then...lol

 

[kithytom]

Can someone translates these language from IRS into English?

Transition Rule for Vehicles Purchased before August 16, 2022​

If you entered into a written binding contract to purchase a new qualifying electric vehicle before August 16, 2022, but do not take possession of the vehicle until on or after August 16, 2022 (for example, because the vehicle has not been delivered), you may claim the EV credit based on the rules that were in effect before August 16, 2022. The final assembly requirement does not apply before August 16, 2022.

Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022​

If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold). If you entered into a written binding contract to purchase a new qualifying vehicle before August 16, 2022, see the rule above.

 

[Kokukenji]

Can someone translates these language from IRS into English?

Transition Rule for Vehicles Purchased before August 16, 2022​

If you entered into a written binding contract to purchase a new qualifying electric vehicle before August 16, 2022, but do not take possession of the vehicle until on or after August 16, 2022 (for example, because the vehicle has not been delivered), you may claim the EV credit based on the rules that were in effect before August 16, 2022. The final assembly requirement does not apply before August 16, 2022.

Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022​

If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold). If you entered into a written binding contract to purchase a new qualifying vehicle before August 16, 2022, see the rule above.

Are you trying to get the tax credit that's coming for 2023, or? There's no more EV credit for Tesla until the new one comes up in 2023. The above is basically saying that if you purchase an EV before 8/16/22 but didn't get the car until or after 8/16/22, you can claim whatever EV credit is available that was in effect BEFORE 8/16/22.

Any EV purchased and delivered between 8/16/22 to 12/31/22, you will fall under the rules before the enactment of the inflation reduction act for ev.

But all of this will not apply to Tesla since the credit have all been spent.

 

[hakunamattata]

Are you trying to get the tax credit that's coming for 2023, or? There's no more EV credit for Tesla until the new one comes up in 2023. The above is basically saying that if you purchase an EV before 8/16/22 but didn't get the car until or after 8/16/22, you can claim whatever EV credit is available that was in effect BEFORE 8/16/22.

Any EV purchased and delivered between 8/16/22 to 12/31/22, you will fall under the rules before the enactment of the inflation reduction act for ev.

But all of this will not apply to Tesla since the credit have all been spent.

I think he is saying what happens if he ordered after 8/16/22 and took delivery after 01/01/2023?

 

[frankvb]

I think he is saying what happens if he ordered after 8/16/22 and took delivery after 01/01/2023?

Date of delivery is the only relevant date (there was an explicit exemption from that for vehicles order before August 16 2022 only)

 

[frankvb]

Any EV purchased and delivered between 8/16/22 to 12/31/22, you will fall under the rules before the enactment of the inflation reduction act for ev.

Not correct, the rule of final assembly location applies during this period.

aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply

 

[hakunamattata]

Not correct, the rule of final assembly location applies during this period.

aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply

I agree with Frank's assessment

 

[Kokukenji]

I think he is saying what happens if he ordered after 8/16/22 and took delivery after 01/01/2023?

OO okay, that makes sense.

 

[AndrewZ]

The car being built in N. America (not just US) is just an overall qualifying requirement to even try and qualify for the two halves of the $7500 credit. Being built in N. America does not in itself qualify the car for $3750. If not built in NA then you don't have a chance to qualify. Built in NA is just a gatekeeper to get through the door to try and qualify.

The two halves are:
1) A certain minimum percentage (which will increase each year) of critical minerals must be extracted or processed in the US or a free trade partner country, or recycled in North America.
2) The second requirement is that a certain minimum percentage (which will increase each year) of battery components must be manufactured or assembled in North America.

Then you have to meet the income requirements. Then you have to actually owe that amount on Federal tax return. So say the car qualified for $7500. If you only owe $4000 on your taxes you will only get $4000 not the full $7500. So you need to owe $7500 or more to even get the full credit (assuming the car even qualifies).

There are also further requirements coming that will affect the definition of a "new clean vehicle" and will exclude:

1. any vehicle placed in service after December 31, 2023, with respect to which any of the components contained in the battery of such vehicle (as described in subsection (e)(2)(A)) were manufactured or assembled by a foreign entity of concern (as so defined)
2. any vehicle placed in service after December 31, 2024, with respect to which any of the applicable critical minerals contained in the battery of such vehicle (as described in subsection (e)(1)(A)) were extracted, processed, or recycled by a foreign entity of concern (as defined in section 40207(a)(5) of the Infrastructure Investment and Jobs Act (42 U.S.C. 18741(a)(5)))

So starting in 2024, a vehicle will not be defined as a "new clean vehicle" and will be disqualified entirely if it contains any battery components coming from (current list) China, Russia, North Korea, or Iran. Starting in 2025, that same condition will apply to any critical battery minerals contained in the vehicle.

These are extremely onerous conditions designed to bring the supply chain onto our shores and offset the additional cost that will come with manufacturing the stuff domestically.

 

[frankvb]

Date of delivery is the only relevant date (there was an explicit exemption from that for vehicles order before August 16 2022 only)

Just realised I misread the original question. No idea what will happen if the (final) order was made before August 16, and then delivery is after January 1, 2023. That all depends on the exact definition of that exemption.

 

[TesMarley]

Just realised I misread the original question. No idea what will happen if the (final) order was made before August 16, and then delivery is after January 1, 2023. That all depends on the exact definition of that exemption.

First and foremost you should understand that this law is useless for Tesla orders until fulfilled after 01/01/23. These are only for other auto makers that did not reach their 250000 limit with the previous version of this tax crediT. Example Kia, Vinfast, Polestar, Rivian etc.

 

[vickh]

First and foremost you should understand that this law is useless for Tesla orders until fulfilled after 01/01/23. These are only for other auto makers that did not reach their 250000 limit with the previous version of this tax crediT. Example Kia, Vinfast, Polestar, Rivian etc.

So if I buy a new Outlander PHEV now, no credit right?

How about a used Outlander PHEV after 01/01/23 (they're avail. under 25K in my area!)? Are the AGI income limit 2022 or 23 ?

 

[slybriguy44]

My understanding is the tax credit applies to when the vehicle is ordered. I would imagine since the Order Date in the Order Agreement is in 2022, it will not apply if the tax credit goes in affect in 2023. You would need to actually order the vehicle in 2023.

this is not correct.

 

[slybriguy44]

I’m curious everyone’s inputs for when the earliest you can order a Model Y this year but feel certain you won’t receive it until next year? I’m thinking that as soon as Tesla sees that their 2022 orders are completely filled and they are looking for new orders that they will raise prices. They must know that there are customers lined up at the starting line of a marathon waiting to place their orders once 2023 nears to receive the $7500 credit. People have been holding out since the Inflation Reduction Act was passed back back in August! If they raise their prices just several thousand dollars in the next few weeks, that will create a lot of false starts at the line from customers fearing that the prices will only go up again by the time 2023 turns over and this will at least get Tesla some orders on the books. For Tesla, it doesn’t make sense to sell a $65,000 Model Y that buyers think will only cost $57,500 when they already know people are willing to pay the $65,000. So Tesla will raise the price. I think almost every EV manufacturer will do this which then actually erodes the incentive for buyers to switch to EV. Hope I’m wrong but would like to hear other peoples thoughts?

Totally agree - would be the smart thing for Tesla to do.

 

[slybriguy44]

It boggles my mind how someone could afford a Tesla yet not have a federal tax liability of 7.5k.

Retirees?