Tax credit 2024 [The tax credit discussion thread]

[ItsNotAboutTheMoney]

I'm curious why/how the IRS will give the tax credit only for a lease. Not doubting at all, but curious about what convoluted logic/regulation/law led to that.

But related to that, what would be the total outlay for a single payment lease and immediate buy out? Or does Tesla not offer a single payment up front lease? I'm assuming the tax credit for leasing doesn't apply to 3rd party leases.

I believe commercial leasing is exempt from the restrictions on the basis of limited choice and commercial necessity.
The Biden administration has used that exemption to allow any leasing business to claim it, no matter whether leasing to businesses or individuals, much to Manchin's ire.

Tesla does not offer buyout of leases at all.
However, a 3rd party could buy a Tesla and lease it. However, do expect to pay extra. In order to qualify for the tax credit, the lease must not be structured as an effective purchase.

 

[UltraRedMX]

Apparently this was put out by the IRS on the 5th:

"IRS announces more time for dealers and sellers of clean vehicles to submit time-of-sale reports​

...Seller reporting in IRS Energy Credits Online (IRS ECO) became available on Jan. 1, 2024. To provide dealers and the IRS more time to submit and intake seller reports into this new system, the IRS is temporarily extending the 3-day time period to submit time-of-sale reports provided in Revenue Procedure 2023-38 through Jan. 16. This means dealers and sellers have until Jan. 19 to submit a time-of-sale report for vehicles sold Jan. 1 through Jan. 16."

It makes it sound like Tesla will be able to retroactively get the point of sale credit for those vehicles sold in those first 16 days? Am I reading this wrong or how would you interpret this?

 

[mongo]

Apparently this was put out by the IRS on the 5th:

"IRS announces more time for dealers and sellers of clean vehicles to submit time-of-sale reports​

...Seller reporting in IRS Energy Credits Online (IRS ECO) became available on Jan. 1, 2024. To provide dealers and the IRS more time to submit and intake seller reports into this new system, the IRS is temporarily extending the 3-day time period to submit time-of-sale reports provided in Revenue Procedure 2023-38 through Jan. 16. This means dealers and sellers have until Jan. 19 to submit a time-of-sale report for vehicles sold Jan. 1 through Jan. 16."

It makes it sound like Tesla will be able to retroactively get the point of sale credit for those vehicles sold in those first 16 days? Am I reading this wrong or how would you interpret this?

All vehicle sales need to be submitted through the portal to get any credit. Point of sale approval needs to be given before the sale so I think this is for non-PoS clean vehicle end of year filing credits.

Q11 How will a seller provide these reports to the IRS? (updated October 6, 2023)
A11. For vehicle sales occurring in calendar year 2023, sellers must file reports within 15 days after the end of the calendar year, via a method to be provided by the IRS or through IRS Energy Credits Online. For vehicle sales occurring in calendar year 2024 and later, sellers must file reports within 3 days of the time of sale, through IRS Energy Credits Online. For further details see Revenue Procedure 2022-42 and Revenue Procedure 2023-33.

 

[UltraRedMX]

All vehicle sales need to be submitted through the portal to get any credit. Point of sale approval needs to be given before the sale so I think this is for non-PoS clean vehicle end of year filing credits.

Q11 How will a seller provide these reports to the IRS? (updated October 6, 2023)
A11. For vehicle sales occurring in calendar year 2023, sellers must file reports within 15 days after the end of the calendar year, via a method to be provided by the IRS or through IRS Energy Credits Online. For vehicle sales occurring in calendar year 2024 and later, sellers must file reports within 3 days of the time of sale, through IRS Energy Credits Online. For further details see Revenue Procedure 2022-42 and Revenue Procedure 2023-33.

That makes sense, so the 3 day window is for reporting it AFTER the sale, and they are extending that specific window only since the portal doesn't work at this moment (but they expect it to by the 16th?)

 

[mongo]

That makes sense, so the 3 day window is for reporting it AFTER the sale, and they are extending that specific window only since the portal doesn't work at this moment (but they expect it to by the 16th?)

Like something like that.
Based on original guidance, it should all happen at vehicle purchase via portal, but it seems like they've fallen back to post-sale forms instead.

 

[vickh]

Like something like that.
Based on original guidance, it should all happen at vehicle purchase via portal, but it seems like they've fallen back to post-sale forms instead.

But will we/buyer get it POS? Till the ETA 16th?

 

[mongo]

But will we/buyer get it POS? Till the ETA 16th?

I wouldn't expect retroactive PoS...

 

[Hoosier-Daddy]

I wouldn't expect retroactive PoS...

Could buyers soften the blow by not paying the first $7.5k of withholding or estimated tax?

 

[mongo]

Could buyers soften the blow by not paying the first $7.5k of withholding or estimated tax?

Absolutely!

 

[mongo]

Absolutely!

Although be carefully on estimateds due to uniformity requirements. It could get dinged as 1st quarter underpayment.

 

[vickh]

Although be carefully on estimateds due to uniformity requirements. It could get dinged as 1st quarter underpayment.

This is why I like POS. With the IRS since I do my own taxes it's more of a challenge. Hope we get a good ETA with POS soon!

 

[Greg-]

I was just able to do the $7,500 tax credit transfer in the Telsa app for my new Model Y!

 

[OCR1]

I was just able to do the $7,500 tax credit transfer in the Telsa app for my new Model Y!

What does that mean? Did they deduct it from the purchase price? Was this for a custom order or inventory model with a discount?

 

[mongo]

What does that mean? Did they deduct it from the purchase price? Was this for a custom order or inventory model with a discount?

Point of sale credit acts like extra down payment.

 

[OCR1]

Point of sale credit acts like extra down payment.

Understood. I’m just not seeing that option when I try to order one.

 

[mongo]

Understood. I’m just not seeing that option when I try to order one.

It comes up at payment time (and during financing questions I think).
[It's on the incentives tab]

 

[CobaltLights]

It comes up at payment time (and during financing questions I think).

So, if I’m hearing this correctly, Tesla is now able to perform POS credits? If so, this is huge.

 

[mongo]

So, if I’m hearing this correctly, Tesla is now able to perform POS credits? If so, this is huge.

Yep, kinks have been resolved.

https://twitter.com/x/status/1745823034856849666

 

[Greg-]

What does that mean? Did they deduct it from the purchase price? Was this for a custom order or inventory model with a discount?

This was an inventory order. I was very fortunate as I received a $3,500 inventory adjustment. The $7,500 reduces the price of the vehicle (my understanding is this does not reduce the sales taxes).

 

[Greg-]

Understood. I’m just not seeing that option when I try to order one.

Note that this is all in the Tesla app after placing the order (I placed my order on January 5th). I had not previously made any elections on the incentives tab. When I looked at it early this morning, it looked like it had always had. When I looked again at 9:00 EST, the incentives tab was completely different.