Good Bye $7,500 tax credit!

[f1eng]

I pay over 50% of my income to the government.

Move your business elsewhere then.
The US is supposed to be a low tax economy

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[PDACPA]

Per existing law, the tax credit for EV charging equipment - 26 U.S. Code § 30C - Alternative fuel vehicle refueling property credit- does not apply to property placed in service after December 31, 2021.
Unless that gets modified, the home EV charging equipment tax credit is no more.

Thanks for the cite. I thought I had read that there was language to extend it. It is a nice little credit that many EV owners forget about and most people spend $1,500-$2,000 between an aftermarket charger and some electrical work.

If you are trying to get EV adoption by the masses, this helps and you need to modify the MSRP numbers to get more EV's to qualify.

 

[Tooney]

@PDACPA Maybe they decided the millions being put into adding public charging stations was enough.
I don't know if the new bill modifies the expiration date in 26 USC Section 30C or not. If it did, I'd expect EVSE vendors like Clipper Creek and others to post the news on their websites soon.

Also, I've seen a couple of articles today claiming that, at the moment, almost no US-made EVs can qualify for the new tax credit, due to combination of MSRP limits and the restrictions on battery sourcing.
if true.

 

[PDACPA]

@PDACPA Maybe they decided the millions being put into adding public charging stations was enough.
I don't know if the new bill modifies the expiration date in 26 USC Section 30C or not. If it did, I'd expect EVSE vendors like Clipper Creek and others to post the news on their websites soon.

Also, I've seen a couple of articles today claiming that, at the moment, almost no US-made EVs can qualify for the new tax credit, due to combination of MSRP limits and the restrictions on battery sourcing.
if true.

I did a quick search of the new bill text, but did not hit any of my keywords I was searching and have not had time to read it all, but you are right Clipper and Chargepoint might mention it.

I too read the article about non-meeting it. Mostly due to the battery (China produces 76% of the batteries and they want 40% or something made in the US. I did notice Ford Lightning prices on the 3 lower models might meet the $ limit, but the bill mentions car and SUV (is a pick up an SUV?).

 

[Tooney]

Because the bill refers to EPA and DOE vehicle classifications, I believe relevant classifications are here: https://afdc.energy.gov/data/10380#:~:text=These classes, 1-8,,(Class 7-8).
and here: https://www.fueleconomy.gov/feg/pdfs/guides/FEG2022.pdf
but am not sure of it.

 

[ben1]

Maybe it is more useful to spend government money on improving the charging infrastructure instead of temporary tax credit for buying cars.
The government should do the things that can't be easily done privately.

So this could make sense if some of the money goes to infrastructure.

 

[Tooney]

The US is supposed to be a low tax economy

That's only what the people who want to raise taxes say.

 

[Riche77]

Quick question…I apologize if someone has already asked. I actually am leasing my taycan and they took the 7500 credit off on the top, explaining that this tax scenario may very well happen and if I don’t take it now they may get rid of the credit by the time I file taxes at the end of 2022. does anyone have any thoughts if I’m going to have to repay that on my tax return?

 

[fgwinn]

If the effective date of 1/1/23 stays at final signing into law, then you will need to take delivery (put in service) your Taycan by 12/31/2022 to qualify to get the tax credit of $7,500 for Tax Year 2022.....

The way the IRA text reads (to me) is that only vehicles where there is a "written binding contract to purchase" in place prior to the enactment of the bill (i.e. the date Biden signs it into law) will qualify for the $7500 tax credit under the old rules.

The new rules regarding MSRP cap, AGI thresholds, and North America assembly and content, apply to vehicles delivered beginning in 2023.

The way I read the bill, no EV vehicle ordered after Biden signs the bill and delivered in the last few months of 2022 will qualify for the credit. If someone can point to the section in the bill that contradicts what I am saying I will apologize and be happy to eat my words.

Edit 11-Aug-2022: Sorry about misstating the tax credit rules in the paragraph immediately above this note. It turns out that vehicles assembled in North America could be eligible for the tax credit if ordered and delivered after the date signed and before 1/1/2023.

 

[Jhenson29]

The government should do the things that can't be easily done privately.

I agree! If (privately) I can’t easily buy a Taycan, the government should help me!?

 

[Kayone73]

Quick question…I apologize if someone has already asked. I actually am leasing my taycan and they took the 7500 credit off on the top, explaining that this tax scenario may very well happen and if I don’t take it now they may get rid of the credit by the time I file taxes at the end of 2022. does anyone have any thoughts if I’m going to have to repay that on my tax return?

Since you're leasing the car, the manufacturer (Porsche) claims the tax credit instead of you and instead you get a discount on your lease rate instead. So you have nothing to claim on your 2022 Federal tax return as its taken care of already. You can only claim the fed tax credit if you BUY the car, not lease.

 

[fullmetalbaal]

To be honest, in an environment where it is hard to even get a car, a tax subsidy makes zero sense.

They don't need to encourage demand - so what is the point? Encouraging specific actions on part of the OEMs is still on the table, and that's what they are doing by incentivizing US sourced etc.

As much as I'd love to continue benefitting from these rebates - from a strictly objective perspective this change makes sense to me.

And IMHO subsidizing charging networks along highways isn't much better - OEMs have billions, and Tesla demonstrated that you actually don't need billions to roll out a network. Why should tax payers foot that bill?They should focus on aspects that big corporations won't chase: transit, better road infrastructure, charging networks in underprivileged or remote areas.

 

[Torv]

Quick question…I apologize if someone has already asked. I actually am leasing my taycan and they took the 7500 credit off on the top, explaining that this tax scenario may very well happen and if I don’t take it now they may get rid of the credit by the time I file taxes at the end of 2022. does anyone have any thoughts if I’m going to have to repay that on my tax return?

just like the movie, “Nope.”

 

[PDACPA]

The way the IRA text reads (to me) is that only vehicles where there is a "written binding contract to purchase" in place prior to the enactment of the bill (i.e. the date Biden signs it into law) will qualify for the $7500 tax credit under the old rules.

The new rules regarding MSRP cap, AGI thresholds, and North America assembly and content, apply to vehicles delivered beginning in 2023.

The way I read the bill, no EV vehicle ordered after Biden signs the bill and delivered in the last few months of 2022 will qualify for the credit. If someone can point to the section in the bill that contradicts what I am saying I will apologize and be happy to eat my words.

There were two sections regarding Effective Dates. The first one said it applies to vehicles placed in service after 12/31/2022 except for paragraphs 2, 3, 4, and 5. (need to go back to those paragraphs).

The one you quoted was the "transition rule." And you are totally correct in how I read it. In reading it if you could have a written binding contract prior to the enactment of the act and irregardless of the actual date placed in service, elect the day before the enactment of the Act for the in service date.

That would mean, if you had a contract in place today and the car arrives in 2023, it would be treated as "in service" the day before the enactment of the act (a 2022 tax credit). That might stimulate a rush of EV sales prior to enactment, but effectively kill EV sales from the date of enactment through the end of the year if no vehicles qualify.

Do you agree with that analysis?

 

[fgwinn]

There were two sections regarding Effective Dates. The first one said it applies to vehicles placed in service after 12/31/2022 except for paragraphs 2, 3, 4, and 5. (need to go back to those paragraphs).

The one you quoted was the "transition rule." And you are totally correct in how I read it. In reading it if you could have a written binding contract prior to the enactment of the act and irregardless of the actual date placed in service, elect the day before the enactment of the Act for the in service date.

That would mean, if you had a contract in place today and the car arrives in 2023, it would be treated as "in service" the day before the enactment of the act (a 2022 tax credit). That might stimulate a rush of EV sales prior to enactment, but effectively kill EV sales from the date of enactment through the end of the year if no vehicles qualify.

Do you agree with that analysis?

I think we may be in agreement, now. But, I am not certain. Earlier you said, "If the effective date of 1/1/23 stays at final signing into law, then you will need to take delivery (put in service) your Taycan by 12/31/2022 to qualify to get the tax credit of $7,500 for Tax Year 2022." I don't agree with that statement, since the "transition rule" requires a "written binding contract to purchase" prior to Biden signing the bill, and your earlier statement implies that simply taking delivery prior to 1/1/2023 will qualify the transaction for the tax credit under the old rules.

The info in paragraphs 2, 3, 4, and 5, doesn't impact our analysis. The info in these paragraphs basically describes the new rules which in effect reduce the number of EVs that qualify after 12/31/2022.

I have a hard time believing that the Senate and House intended to disqualify all EVs ordered and delivered between the enactment date and 1/1/2023. But, that's the way the IRA bill seems to be worded. I suspect there are some Taycan customers who will take delivery of their car in the last four months of the year who do not have a "written binding contract to purchase" in place now. Hopefully the 87000 new IRS agents will go easy on those customers. Biden could do Taycan forum members a favor by waiting until 1/1/2023 to sign the bill.

Edit 11-Aug-2022: I misread the text of the IRA act. As it turns out vehicles assembled in North America do qualify for the tax credit if delivered by the end of the year provided that they are assembled in North America.

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