US Federal Tax Credit Changes/should I get MY2021 or MY2022?

[maddie]

I would check with the dealer if you can pay for it before the delivery, say last week of December? As long as you make the payment of the car in 2021, you are good (and likely safe). For a lease, this probably will be not a good idea since you may end up paying for 1-3 months vs in buying you only lose interest (which is this market would be couple hundreds I suppose? depends how you finance)

This is something I checked with my dealer too. But apparently they cannot bill, till the car can be handed over. Anyone got their dealer to do otherwise ?

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[WilderAZ]

This is something I checked with my dealer too. But apparently they cannot bill, till the car can be handed over. Anyone got their dealer to do otherwise ?

The delivery date takes precedence so paying in '21 will not help if the car isn't received and titled in the taxpayer's name until '22.

 

[abhasin1]

The delivery date takes precedence so paying in '21 will not help if the car isn't received and titled in the taxpayer's name until '22.

link to this info please? I didn’t find reference to this in IRA code

 

[abhasin1]

link to this info please? I didn’t find reference to this in IRA code

this is what I see from IRS

“For vehicles acquired after 12/31/2009, the credit is equal to $2,500 plus, for a vehicle which draws propulsion energy from a battery with at least 5 kilowatt hours of capacity, $417, plus an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours. The total amount of the credit allowed for a vehicle is limited to $7,500.”

It says acquired, not delivery date. If you make the full payment, it will have a VIN by then, an insurance will be needed and you make the car payments, hence it qualifies

 

[abhasin1]

This is something I checked with my dealer too. But apparently they cannot bill, till the car can be handed over. Anyone got their dealer to do otherwise ?

call out of state dealerships who can agree perhaps and also have an allocation? Your best bet is to convince your dealer.

 

[ithinkmac]

already tried this route with dealer. They cannot bill me until car is delivered (titled) to me, which they can't do till get the car at the dealership. so I'm told.

I also wanted to make the 2021 cut, but alas my 4CS CT is currently looking at Jan 14th 2022 delivery. Dealer thinks it might arrive at port on 12/31/21, but that doesn't do me any good.

-ThinkMac-

 

[Tsingtao]

already tried this route with dealer. They cannot bill me until car is delivered (titled) to me, which they can't do till get the car at the dealership. so I'm told.

I also wanted to make the 2021 cut, but alas my 4CS CT is currently looking at Jan 14th 2022 delivery. Dealer thinks it might arrive at port on 12/31/21, but that doesn't do me any good.

-ThinkMac-

It has been a while (and my brain loses a little functionality with each beer I drink) but my recollection from circa 2015 (when I last purchased an EV and claimed a credit from Uncle Sam) was that I told my accountant what I bought and when -- and maybe provided a VIN number -- and that was about it. If I was worried about Biden stealing the credit in 2022, I'd cut the dealer a check in 2021, include the VIN on the check memo, and tell the dealer to cash the check whenever they felt like cashing it. Then claim the credit and let "The Evil One" (IRS) challenge it.

 

[dickp]

It has been a while (and my brain loses a little functionality with each beer I drink) but my recollection from circa 2015 (when I last purchased an EV and claimed a credit from Uncle Sam) was that I told my accountant what I bought and when -- and maybe provided a VIN number -- and that was about it. If I was worried about Biden stealing the credit in 2022, I'd cut the dealer a check in 2021, include the VIN on the check memo, and tell the dealer to cash the check whenever they felt like cashing it. Then claim the credit and let "The Evil One" (IRS) challenge it.

You should consult with your tax advisor of course, but from my understanding this is how to file for the $7,500 Federal EV tax credit-My advise is worth exactly what you are paying for it.

The IRS tax forms to take the $7,500 EV tax credit for a Taycan are form 8936 & Schedule 3. The filing procedure is pretty straight forward.

On form 8936:
Line 1. Year, make , and model of vehicle
Line 2. Vehicle identification number
Line 3. Enter date vehicle was placed in service
Line 4a. Enter $7,500
Line 4b. Enter 100%
Carry over the $7,500 to lines 16, 19 & 23

On form Schedule 3:
Line 6. Check box C & enter form # 8936 & $7,500
Line 7. Enter $7,500 and carry it over to Form 1040 line 20 where the credit is taken.

 

[Tsingtao]

You should consult with your tax advisor of course, but from my understanding this is how to file for the $7,500 Federal EV tax credit-My advise is worth exactly what you are paying for it.

The IRS tax forms to take the $7,500 EV tax credit for a Taycan are form 8936 & Schedule 3. The filing procedure is pretty straight forward.

On form 8936:
Line 1. Year, make , and model of vehicle
Line 2. Vehicle identification number
Line 3. Enter date vehicle was placed in service
Line 4a. Enter $7,500
Line 4b. Enter 100%
Carry over the $7,500 to lines 16, 19 & 23

On form Schedule 3:
Line 6. Check box C & enter form # 8936 & $7,500
Line 7. Enter $7,500 and carry it over to Form 1040 line 20 where the credit is taken.

The key language on Form 8936 (which I admittedly have never reviewed) appears to be Line 3: "Date vehicle placed in service." The following link:
https://www.taxnotes.com/research/f...ot-delivered-in-tax-year-ineligible-for/1q4jc
provides an excellent discussion of how the term "placed in service" is interpreted (in the eyes of the IRS at least). Bottom line: "Qualified property is considered placed in service when it is in a condition or state of readiness and availability for a specifically assigned function." I think there is a lot of wiggle room in that definition and that good faith arguments could be made that the car was in a state of readiness/availability for its assigned function if you can prove that you purchased it in the year in question -- even if it was, for example, waiting on a software update to keep the hazard lights from being activated during emergencies. My guess is that you would get different answers to the question depending upon whether you asked a conservative accountant or an aggressive tax attorney. If the worst thing to happen is that you end up paying pack the credit, I'd go for the credit in the year I paid for the vehicle.

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