IRS releases new EV credit rules - effective 4/18/23

[TaxmanHog]

UPDATE for 3/31/2023
https://www.irs.gov/newsroom/irs-is...hicle-critical-mineral-and-battery-components

Link to revised FAQ
https://www.irs.gov/pub/taxpros/fs-2023-08.pdf

Fueleconomy.gov
https://fueleconomy.gov/feg/tax2023.shtml

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[Grumpy2]

April 18 cutoff, but I can't find the decision about the mineral content for the Lightning after that date?

 

[TaxmanHog]

April 18 cutoff, but I can't find the decision about the mineral content for the Lightning after that date?

They have not listed the breakout yet from what I've researched so far, for the time being the old rules still apply for trucks placed in service on or before 4/17/2023. New rules (assuming the minerals and content rule of 40% is not met) will apply on vehicles in service on 4/18/2023 and beyond.

For vehicles placed in service before or on April 17, 2023, the credit is calculated as a $2,500 base amount plus, for a vehicle which draws propulsion energy from a battery with at least 7 kilowatt hours of capacity, $417, plus an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours, up to an additional $5,000 beyond the base amount. In general, the minimum credit amount will be $3,751 ($2,500 + 3 * $417), representing the credit amount for a vehicle with the required minimum of 7 kilowatt hours of battery capacity.

 

[Chado]

Ford CEO Farley Comments On Newly Released Guidance On Inflation Reduction Act Implementation; Says Will Help Customers Determine Whether They're Eligible To Receive Incentives, Plan To Share More Information Soon

BENZINGA 3:41 AM ET 3/31/2023

 

[metroshot]

They have not listed the breakout yet from what I've researched so far, for the time being the old rules still apply for trucks placed in service on or before 4/17/2023. New rules (assuming the minerals and content rule of 40% is not met) will apply on vehicles in service on 4/18/2023 and beyond.

For vehicles placed in service before or on April 17, 2023, the credit is calculated as a $2,500 base amount plus, for a vehicle which draws propulsion energy from a battery with at least 7 kilowatt hours of capacity, $417, plus an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours, up to an additional $5,000 beyond the base amount. In general, the minimum credit amount will be $3,751 ($2,500 + 3 * $417), representing the credit amount for a vehicle with the required minimum of 7 kilowatt hours of battery capacity.

@TaxmanHog

So is this the correct timeline after 4/18/23:

Ford has time to generate a report to the IRS on what their percentages of mineral sources and assembly details by the end of 2023 ?

Is that how Ford and other manufacturers will hold their customers in suspense for the rest of the year if the customers will get full, half or no credit ????

 

[jimfigler]

@TaxmanHog

So is this the correct timeline after 4/18/23:

Ford has time to generate a report to the IRS on what their percentages of mineral sources and assembly details by the end of 2023 ?

Is that how Ford and other manufacturers will hold their customers in suspense for the rest of the year if the customers will get full, half or no credit ????

The way I read it is that on 4/17/2023 the IRS will post what vehicles meet the battery and mineral requirements. At that time you will know what if any tax credit it will get. The statement below was taken from fueleconomy.gov

This page will be updated with qualifying vehicles and credit amounts on April 17, 2023.

 

[metroshot]

The way I read it is that on 4/17/2023 the IRS will post what vehicles meet the battery and mineral requirements. At that time you will know what if any tax credit it will get. The statement below was taken from fueleconomy.gov

This page will be updated with qualifying vehicles and credit amounts on April 17, 2023.

Thanks for that detail.

Oh, so the manufacturers have already submitted to the IRS battery details then.

After 4/18/23, are there any EVs that will qualify for the full tax credit ????

 

[pjy]

Hopefully agreements would qualify towards the percentages.

From IRS:


The NPRM proposes a three-step process for determining the percentage of the value of the critical minerals in a battery that contribute toward meeting critical minerals requirement: 1) determine procurement chains, 2) identify qualifying critical minerals, and 3) calculate qualifying critical mineral content.

The NPRM also details a proposed set of principles for identifying the set of countries with which the United States has a free trade agreement in effect, since this term is not defined in statute. This term could include newly negotiated critical minerals agreements.

Agreements would be considered based on whether they reduce or eliminate trade barriers on a preferential basis, commit the parties to refrain from imposing new trade barriers, establish high-standard disciplines in key areas affecting trade, and reduce or eliminate restrictions on exports or commit the parties to refrain from imposing such restrictions on exports, including for trade in the critical minerals contained in electric vehicle batteries.

 

[TaxmanHog]

It has come to my attention that the Ford F150 Lightning will qualify for for the full $7500 Federal credit!!

More discussion on that revelation in the adjacent thread.
https://www.f150lightningforum.com/...tax-credit-for-80k-msrp-buyers-in-2023.15078/

 

[TaxmanHog]

Unsticking this thread, it remains locked to allow relevant conversation to continue in the new thread.

Updates to 2023 procedures and new information for 2024 point of sale procedures are posted in this the following thread:

https://www.f150lightningforum.com/...leases-guidance-for-new-ev-tax-credits.16913/

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