IRS Issues Statement on New Plug-In Electric Drive Vehicle Credit (IRC 30D)

[cvalue13]

To be fair, I didn't see that outlined in the previous(BBB era) bill drafts either. So I don't know, maybe its something else the IRS gets to decide...

In this broader bill summary by a news outlet, obviously not super technical, there are two passing references that may be relevant:

In one section (describing different energy efficiency incentives for homes), it’s said that while the tax incentive is a credit and not a rebate, the credits can be rolled forward to future year tax liabilities. “But there's a silver lining there. Consumers who claim a residential clean energy tax credit but have an insufficient tax liability to benefit can carry forward any unused credits to future years to offset future taxes, Schmoll said.”

While in another section it speaks of “rebates” as being a POS exchange: “The rebates are meant to be delivered to consumers at the point of sale, Saul-Rinaldi said.”

Again, I’m really out of my bailiwick here, but perhaps the “rebate” discussions around the bill really were instead driving at this POS-rebate structure, whereby one never needs to claim a rebate on/through their taxes and can instead simply get the POS rebate in real time at spend. Generally, this would seem better than having to wait to file taxes and then declare and receive a rebate check.

You and others have raised a great point that the POS Regate is optional, which would seem to mean someone that opts out could be left only with a credit. Though, also as you mention, perhaps that’s just a gap/nuance left for the IRS to clarify and make rule on.

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[greenne]

In this broader bill summary by a news outlet, obviously not super technical, there are two passing references that may be relevant:

In one section (describing different energy efficiency incentives for homes), it’s said that while the tax incentive is a credit and not a rebate, the credits can be rolled forward to future year tax liabilities. “But there's a silver lining there. Consumers who claim a residential clean energy tax credit but have an insufficient tax liability to benefit can carry forward any unused credits to future years to offset future taxes, Schmoll said.”

While in another section it speaks of “rebates” as being a POS exchange: “The rebates are meant to be delivered to consumers at the point of sale, Saul-Rinaldi said.”

Again, I’m really out of my bailiwick here, but perhaps the “rebate” discussions around the bill really were instead driving at this POS-rebate structure, whereby one never needs to claim a rebate on/through their taxes and can instead simply get the POS rebate in real time at spend. Generally, this would seem better than having to wait to file taxes and then declare and receive a rebate check.

You and others have raised a great point that the POS Regate is optional, which would seem to mean someone that opts out could be left only with a credit. Though, also as you mention, perhaps that’s just a gap/nuance left for the IRS to clarify and make rule on.

FWIW the solar credits have always been able to be "rolled over" to the next year. There's no big hoopla about it or not in the FAQ anywhere..it just is.

I imagine more guidance will come out on this(including refundability) over the next few months as we roll into 2023.

 

[Roy2001]

That's my understanding. The Lightning which is assembled within the States, will be exempt from the income and 80k price through the end of the year. For all the MY22 orders, we're all good regardless of a binding contract or not.

Good to know that. It just makes me feel bad when others can buy a EV for $7500 less.

Glad I bought a Tesla in June with early 2021 price and now a Lariat ER with $7500 credit BEFORE 2023 price hike.

Maybe in future, I would just buy a used EV when price is good. The price should include the $7500 factor in.

 

[sotek2345]

That's my understanding. The Lightning which is assembled within the States, will be exempt from the income and 80k price through the end of the year. For all the MY22 orders, we're all good regardless of a binding contract or not.

I agree that all MY22 orders should be OK, but I wouldn't be surprised if some of them don't get delivered until 2023.

On the Mach-e forum there is a guy (as of last time I checked) still waiting on his MY21 Mach-e to be delivered.

 

[fitek]

Is there any rhyme or reason to which Lightnings are being delivered first?

 

[sotek2345]

Is there any rhyme or reason to which Lightnings are being delivered first?

Is there a rational plan? - yes. Do we know it or have a hope of guessing it? - No

 

[RavenYZF-R6]

I haven’t found much on this but for people smarter than I, are we seeing any income restrictions for the solar? I know you need enough tax liability and that it will carry over. Just might make too much money between the wife and I if the same EV restrictions apply.

Edit: Reference the new bill

Thanks!

 

[ExCivilian]

@sotek2345 ,

Does NY tax rebates/incentives similarly to CA?

In CA, if one opts for the $7,500 credit up front it will be taxed thereby reducing the full amount by roughly $650 depending on one's local tax rates.

If one doesn't know how that's handled in one's state, a quick spot check would be how your phone purchases are handled: if you've bought an iPhone on Black Friday or under a carrier plan where the cost was $0, did you still have to pay taxes on MSRP? If so, the $7,500 will be taxed at point of sale, also.

@RavenYZF-R6
We put solar on our condo in 2016 and there wasn't any income caps back then. Putting solar on our home now and there still doesn't seem to be any income caps.

 

[sotek2345]

@sotek2345,

Does NY tax rebates/incentives similarly to CA?

In CA, if one opts for the $7,500 credit up front it will be taxed thereby reducing the full amount by roughly $650 depending on one's local tax rates.

If one doesn't know how that's handled in one's state, a quick spot check would be how your phone purchases are handled: if you've bought an iPhone on Black Friday or under a carrier plan where the cost was $0, did you still have to pay taxes on MSRP? If so, the $7,500 will be taxed at point of sale, also.

In NY you will still pay sales tax on the full price of the truck - the $7,500 just comes off the full price.

example:

$80,000k truck X 1.0825 (sales tax) = 86,600. the 7,500 comes off of that. You pay the same sales tax regardless of any tax credit.

You DO NOT pay income tax on the tax credit. Not sure if that is what you are talking about in CA

 

[TaxmanHog]

Moderator edit of OP adding links to yet to be revised form 8936 and instructions , please maintain a respectful discussion.

 

[jpepper07]

Good to know that. It just makes me feel bad when others can buy a EV for $7500 less.

Glad I bought a Tesla in June with early 2021 price and now a Lariat ER with $7500 credit BEFORE 2023 price hike.

Maybe in future, I would just buy a used EV when price is good. The price should include the $7500 factor in.

This has been my thoughts too. I got so lucky to be invited in wave 6 for a late September delivery. This kept the 7500 tax credit in take and saved me like 7k from the price hike. So my same vehicle is like 15k cheaper than a 2023 lariat er.

 

[ExCivilian]

In NY you will still pay sales tax on the full price of the truck - the $7,500 just comes off the full price.

example:

$80,000k truck X 1.0825 (sales tax) = 86,600. the 7,500 comes off of that. You pay the same sales tax regardless of any tax credit.

You DO NOT pay income tax on the tax credit. Not sure if that is what you are talking about in CA

In CA, one pays taxes on the incentive, too. See my lease from last year, for example:

Since leases often (not always--lessors weren't required to pass the credit through) passed the $7,500 through at signing (since that's the only way a lessee would receive the benefit), this approximates how a $7,500 credit would pass through on a sale.

Notice Box A.2. includes tax on the remainder of the incentive after drive-off fees.

This was one way to benefit from the tax credit (albeit slightly reduced) if one was concerned about qualifying for the credit under the old laws.

I don't know how this all gets hammered out at income tax time, though. I don't remember how we had to claim the last few EVs. We're doing solar now but it's not in, yet. Last time we did solar was in 2016 so it's been a while but we had to back out state/local incentives in our federal filings, IIRC. I don't recall if we had to pay taxes to CA for the federal incentives.

FWIW the solar credits have always been able to be "rolled over" to the next year. There's no big hoopla about it or not in the FAQ anywhere..it just is.

For people with solar systems but without batteries, I believe the new law allows for batteries to be installed on a pre-existing system and claim the full credit of the battery. I think that's new--I don't remember that in the old law.

 

[astricklin]

Good to know that. It just makes me feel bad when others can buy a EV for $7500 less.

Glad I bought a Tesla in June with early 2021 price and now a Lariat ER with $7500 credit BEFORE 2023 price hike.

Maybe in future, I would just buy a used EV when price is good. The price should include the $7500 factor in.

Right now, the price of used EVs is often above MSRP because there's hardly any available new or used.

 

[Roy2001]

Right now, the price of used EVs is often above MSRP because there's hardly any available new or used.

I know. I mean in future when supply is improved and price is reasonable.

 

[astricklin]

I know. I mean in future when supply is improved and price is reasonable.

Hopefully, but it's hard to know exactly what the future holds for residual values.
There is also an additional $4k incentive for used EVs that are under $25k and at least 2 years old.
So if Ford is accurate in that the 22 trucks will lose about 50% value in 36 months,and this legislation stays in place, you might be able to get a Pro lightning in 3-4 years for around $20k. Freaking steal if you ask me.

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