Tax credit 2023 [The tax credit discussion thread]

[hakunamattata]

this is not correct.

It all depends, two years ago when NJ pulled their rebate with only two or three days notice, they went by Order date and not Delivery date. Based on what I am understanding from IRS's statement i.e. "Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022" section
it looks like they are going by delivery date, would like others to opine on it.

Reference link - Plug-In Electric Vehicle Credit IRC 30 and IRC 30D | Internal Revenue Service (irs.gov)

 

[slybriguy44]

It all depends, two years ago when NJ pulled their rebate with only two or three days notice, they went by Order date and not Delivery date. Based on what I am understanding from IRS's statement i.e. "Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022" section
it looks like they are going by delivery date, would like others to opine on it.

Reference link - Plug-In Electric Vehicle Credit IRC 30 and IRC 30D | Internal Revenue Service (irs.gov)

Delivery date is the relevant date now for tesla vehicles. After 12/31/22 , potential for the new credit under the new rules. Before 12/31/22, no credit.

 

[cya2marra]

this is not correct.

I was also misinformed so I got the actual text from congress.gov. Not about the qualification for the tax credit but the tax credit itself: https://www.congress.gov/bill/117th-congress/house-bill/5376

"Part 4--Clean Vehicles
(Sec. 13401) The act modifies requirements for the refundable income tax credit for qualifying plug-in electric vehicles. The modified credit is $3,750 for any vehicle meeting certain critical minerals requirements and $3,750 for vehicles meeting certain battery component requirements. The maximum allowable credit remains $7,500 per vehicle. Vehicles eligible for the credit include those made by qualified U.S. manufacturers and excludes those manufactured or assembled by a hostile foreign entity.

The credit is not available to taxpayers whose modified adjusted gross income exceeds $150,000 ($300,000 for married couples filing jointly) The credit is not allowed for vehicles that have a manufacturer's suggested retail price in excess of $80,000 for vans, sport utility vehicles (SUVs), or pickup trucks, and $55,000 for other vehicles.

The credit does not apply to vehicles placed in service after 2032.

(Sec. 13402) The act allows a new tax credit for buyers of previously-owned qualified clean plug-in and fuel cell vehicles. The credit is limited to the lesser of $4,000 or 30% of the vehicle purchase price. The credit is disallowed for taxpayers whose modified adjusted gross income exceeds certain levels and applies only to vehicles with a sales price not exceeding $25,000. It does not apply to vehicles acquired after 2032.

(Sec. 13403) The act creates a new tax credit for qualified commercial clean vehicles. The amount of the credit is the lesser of 15% of the cost of the vehicle (30% for vehicles not powered by a gasoline or diesel internal combustion engine), or (2) the cost of the vehicle in relation to a comparable vehicle. The credit amount may not exceed $7,500 for vehicles weighing less than 14,000 pounds ($40,000 for other vehicles). Eligible vehicles must have a battery capacity of not less than 15 kilowatt hours and be capable of being recharged from an external source of electricity.

The credit does not apply to vehicles acquired after 2032.

(Sec. 13404) The act modifies and extends through 2032 the tax credit for alternative fuel refueling property. Beginning in 2023, charging or refueling property is eligible for the credit only if it is placed in service within a low-income or rural area."

Since this passed into law as of 8/16/2022 and the law is named, "Inflation Reduction Act of 2022," wouldn't it mean that if you took deliver of a qualifying vehicle after 8/16/2022, it would qualify?

 

[slybriguy44]

I was also misinformed so I got the actual text from congress.gov. Not about the qualification for the tax credit but the tax credit itself: https://www.congress.gov/bill/117th-congress/house-bill/5376

"Part 4--Clean Vehicles
(Sec. 13401) The act modifies requirements for the refundable income tax credit for qualifying plug-in electric vehicles. The modified credit is $3,750 for any vehicle meeting certain critical minerals requirements and $3,750 for vehicles meeting certain battery component requirements. The maximum allowable credit remains $7,500 per vehicle. Vehicles eligible for the credit include those made by qualified U.S. manufacturers and excludes those manufactured or assembled by a hostile foreign entity.

The credit is not available to taxpayers whose modified adjusted gross income exceeds $150,000 ($300,000 for married couples filing jointly) The credit is not allowed for vehicles that have a manufacturer's suggested retail price in excess of $80,000 for vans, sport utility vehicles (SUVs), or pickup trucks, and $55,000 for other vehicles.

The credit does not apply to vehicles placed in service after 2032.

(Sec. 13402) The act allows a new tax credit for buyers of previously-owned qualified clean plug-in and fuel cell vehicles. The credit is limited to the lesser of $4,000 or 30% of the vehicle purchase price. The credit is disallowed for taxpayers whose modified adjusted gross income exceeds certain levels and applies only to vehicles with a sales price not exceeding $25,000. It does not apply to vehicles acquired after 2032.

(Sec. 13403) The act creates a new tax credit for qualified commercial clean vehicles. The amount of the credit is the lesser of 15% of the cost of the vehicle (30% for vehicles not powered by a gasoline or diesel internal combustion engine), or (2) the cost of the vehicle in relation to a comparable vehicle. The credit amount may not exceed $7,500 for vehicles weighing less than 14,000 pounds ($40,000 for other vehicles). Eligible vehicles must have a battery capacity of not less than 15 kilowatt hours and be capable of being recharged from an external source of electricity.

The credit does not apply to vehicles acquired after 2032.

(Sec. 13404) The act modifies and extends through 2032 the tax credit for alternative fuel refueling property. Beginning in 2023, charging or refueling property is eligible for the credit only if it is placed in service within a low-income or rural area."

Since this passed into law as of 8/16/2022 and the law is named, "Inflation Reduction Act of 2022," wouldn't it mean that if you took deliver of a qualifying vehicle after 8/16/2022, it would qualify?

NO, not a Tesla.

 

[cya2marra]

NO, not a Tesla.

Why specifically excluding Teslas?

 

[singlestack]

Why specifically excluding Teslas?

Specifically excluding Tesla, GM, and Toyota, actually.

The new EV Credit goes into effect in 2023*. Until then, the old EV Credit and all of its rules still apply, including the 200k unit manufacturer cap. Tesla, GM, and Toyota have all exceeded that cap so none of their vehicles can qualify for the old credit; they must wait for 2023 to try and qualify for the new credit.

*there is ONE clause from the New EV Credit that took effect immediately: the “assembled in North America “ requirement.

This article breaks it down well: Here's every electric vehicle that qualifies for the current and upcoming US federal tax credit

 

[vickh]

*there is ONE clause from the New EV Credit that took effect immediately: the “assembled in North America “ requirement.

This article breaks it down well: Here's every electric vehicle that qualifies for the current and upcoming US federal tax credit

that ONE clause really disrupted the market. Eg. I'm going to wait till 2023 to buy a PHEV now. Used Outlander or new from the list. TSLA might make the list if they can bring down the costs like they did with my SR.

Good article. My understanding is there is no downside to waiting till 2023 now, as this list will only grow, not shrink like it did in 2022

 

[cdub]

So we're still unclear on whether the Model Y will qualify for the full $7,500?

Take delivery now and get $3,750 for sure or take delivery in 2023 and get $0 to $7,500 in 2024 with my tax refund (or I adjust my withholding).

 

[singlestack]

So we're still unclear on whether the Model Y will qualify for the full $7,500?

Take delivery now and get $3,750 for sure or take delivery in 2023 and get $0 to $7,500 in 2024 with my tax refund (or I adjust my withholding).

If you're in a state with sales tax, the $3,750 credit is actually more like $4,100 (and you get it immediately). That's definitely a better bet than "maybe" getting either $3,750 or $7,500 a year later.

Also worth noting: the RWD Model 3 definitely will not qualify for the full $7,500. Also the $3,750 credit is enough to bring some builds of RWD Model 3 down below $45k -this is a crucial cutoff in WA state to receive state incentives (no sales tax).

 

[cdub]

Tax is calculated after credit subtraction? Cool.

 

[Happy Hippo]

Tax is calculated after credit subtraction? Cool.

DO WE KNOW THAT FOR SURE? Sorry about the caps.

 

[cdub]

DO WE KNOW THAT FOR SURE? Sorry about the caps.

We know nothing

 

[RavenYZF-R6]

DO WE KNOW THAT FOR SURE? Sorry about the caps.

People who have purchased confirmed it lowers the price of the vehicle before tax.

 

[singlestack]

DO WE KNOW THAT FOR SURE? Sorry about the caps.

Several people on this thread have confirmed that it lowers the immediate purchase price before taxes:

https://teslamotorsclub.com/tmc/threads/electrek-tesla-gives-3-750-discount-for-model-3-y-in-the-us-this-month

 

[rpraveen]

All, if any of you or your friends were negatively affected by this drastic price drop, request your Senators and Rep to extend the credit to 2022 buyers as well, to help ease the pain. I think it's only fair:

U.S. Senate: Contacting U.S. Senators

www.senate.gov

Find Your Representative | house.gov

www.house.gov

 

[thejason7891]

Hi all, new member here. I just took delivery of a 2023 Model Y on 1-15-2023. Before I bought, the Tesla site said my car is eligible for the $7500 EV tax credit. However, I never received any tax documents from the dealership before I left. So my question is:

For tesla buyers who claimed a tax credit in the past, did you get any paperwork from Tesla to claim the credit? Do you need any paperwork from Tesla to claim the $7500 credit?

The IRS websites says I should get something at the point of sale...
"The sale qualifies only if:

• You buy the vehicle new
• The seller reports required information to you at the time of sale and to the IRS.
  • Sellers are required to report your name and taxpayer identification number to the IRS for you to be eligible to claim the credit."

 

[wow1450]

How much was the invoice?

 

[evannole]

I claimed the credit four years ago, when I bought my 3. I recall entering the VIN on the form for the credit, but that's all. Don't think I had to submit any additional documentation, though it's been a while, and of course the procedure may have changed.

Did you buy a 7-seat Y ? As far as I am aware, the only Ys that were eligible for the credit at the time you purchased were of the 7-seat variety, because with their third row, they're considered SUVs and thus qualify for the higher maximum price under the tax credit eligibility requirements. Of course, since Tesla cut prices a week ago, subsequent purchases of the 5-seat Y are eligible, provided that the price remains below $55k.

 

[evannole]

Incidentally, all of the paperwork related to your purchase should be available online, in your Tesla account, so if you need to refer to it to claim the credit, you should have access to it.

 

[thejason7891]

How much was the invoice?

52,990 before all fees and taxes.