US Inflation Reduction Act (EV Tax Credit) Megathread [PART 2]

US Inflation Reduction Act (EV Tax Credit) Megathread [PART 2]

https://reddit.com/r/electricvehicles/comments/wq5g64/us_inflation_reduction_act_ev_tax_credit/
Recoil42
https://www.reddit.com/r/electricvehicles/comments/wq5g64/us_inflation_reduction_act_ev_tax_credit/


*Megathread part one is* [*over here.*](https://www.reddit.com/r/electricvehicles/comments/wl430j/us_inflation_reduction_actev_tax_credit_megathread/)

# Current status of the bill:

* [**Signed by President Biden on August 16th, 2022**](https://www.cnn.com/2022/08/16/politics/biden-inflation-reduction-act-signing/index.html)
* [Passed by Congresss on August 12th, 2022](https://time.com/6205925/house-passes-inflation-reduction-act/)
* [EV Tax Credits cleared to stay in bill on August 6th, 2022](https://www.bloomberg.com/news/articles/2022-08-06/ev-tax-credit-limits-cleared-to-stay-in-democrats-package?srnd=premium)
* [Manchin agrees to Quick Action on Climate and Tax Plan on July 27, 2022](https://www.nytimes.com/2022/07/27/us/politics/manchin-climate-tax-bill.html)

# Guides:

* [**The Verge — Yes, the new electric vehicle tax credits are really confusing, but we can help**](https://www.theverge.com/23310457/inflation-reduction-act-ev-tax-credit-act-explainer-how-to)
* [**Alex on Autos — The 2022 EV Tax Credit Changes – The Good, The Bad, The Ugly Explained**](https://www.youtube.com/watch?v=2VL7mFSRnqw)
* [**TechCrunch — A complete guide to the new EV tax credit**](https://techcrunch.com/2022/09/02/a-complete-guide-to-the-new-ev-tax-credit/)

# Quick reference: Will you get the credit?

[Flowchart by u\/bnguyen1982](https://preview.redd.it/ohegwgss05i91.jpg?width=858&format=pjpg&auto=webp&s=9ff353fad0472a288ac7dd8a04ed3980a43db921)

# FAQs

***How does the Inflation Reduction Act immediately modify the existing tax credit for new electric vehicles?***

Effective immediately after enactment (August 16, 2022), the tax credit is only available for qualifying electric vehicles for which final assembly occurred in North America. Further changes to the eligibility rules will begin in 2023, establishing tax credits for pre-owned vehicles, commercial vehicles, and setting requirements for batteries to be resourced within North America.

***If I signed a contract to purchase an electric vehicle prior to enactment (before August 16, 2022) but have not yet taken possession of the vehicle, will the changes in the Inflation Reduction Act impact my tax credit?***

No. If you entered into a written binding contract to purchase a qualifying electric vehicle before the date of enactment of the Inflation Reduction Act (August 16, 2022), the changes in the Inflation Reduction Act will not impact your tax credit. You may claim the credit based on the rules that were in effect before August 16, 2022.

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***What is a written binding contract?***

[Check the IRS definition here](https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d) — in summary, it implies any contract enforceable within your state, and nonrefundable deposit of no less than 5% of the total contract value to be in place. Refundable deposits don’t count. There’s a grey area for ‘significant’ deposits of less than <5%, but they might represent a risk in an audit situation.

***What if I purchase and take possession of a qualifying electric vehicle after August 16, 2022 but before the end of 2022?***

The only change to the existing electric vehicle credit that takes effect after August 16, 2022 and before the end of 2022 is the introduction of the North America final assembly requirement. Otherwise, the rules in effect before enactment of the Inflation Reduction Act for the electric vehicle credit remain in effect, including the phase-out for manufacturers that have sold over 200,000 vehicles in the United States.

***Is my vehicle assembled in North America?***

Check the DoE list of qualifying vehices [here.](https://afdc.energy.gov/laws/inflation-reduction-act)

***Does the battery for my vehicle meet the North American resourcing requirements?***

Unfortunately, this one is mostly speculation right now. Guidelines regarding this aspect of the legislation are expected to be released later in the year. Feel free to ask below whether your vehicle is *likely* to meet those requirements.

***How do I claim the credit? Will it be taken off at time of sale?***

The credit is currently claimed on your annual tax filing. Starting in 2024, a mechanism will be established which will allow car buyers to transfer the credit to dealers at the point of sale so that it can directly reduce the purchase price.

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# Community resources and discussions:

* [**Summary of draft EV Tax Credit Bill with code citations**](https://www.reddit.com/r/electricvehicles/comments/wa8viu/summary_of_draft_ev_tax_credit_bill_with_code/) overview by [u/Remarkable\_Neck\_5140](https://www.reddit.com/user/Remarkable_Neck_5140/)
* [**“Unofficial” 2023 U.S. Federal Clean Vehicle Tax Credit**](https://www.reddit.com/r/electricvehicles/comments/wdjax3/unofficial_2023_us_federal_clean_vehicle_tax/) chart by [u/Mad691](https://www.reddit.com/user/Mad691/)
* [**An actually correct breakdown of the proposed EV tax credit for reconciliation**](https://www.reddit.com/r/electricvehicles/comments/whdtzp/an_actually_correct_breakdown_of_the_proposed_ev/) by u/RektorRicks
* [**Detailed Look At Bill Written By a Lawyer**](https://www.reddit.com/r/electricvehicles/comments/wkk0ep/detailed_look_at_bill_written_by_a_lawyer/) by u/thepick1

# Official resources:

* [**Department of Energy — Inflation Reduction Act of 2022**](https://afdc.energy.gov/laws/inflation-reduction-act)
* [**Internal Revenue Service — Plug-In Electric Drive Vehicle Credit (IRC 30D)**](https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d)
* [**US Treasury — Frequently Asked Questions on the Inflation Reduction Act**](https://home.treasury.gov/system/files/136/EV-Tax-Credit-FAQs.pdf)

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30 thoughts on “US Inflation Reduction Act (EV Tax Credit) Megathread [PART 2]

  1. I won’t qualify for the credit come 2023 due to the income limitations. But if I put money down on a qualifying EV now, but don’t actually take possession until Jan/Feb 2023, would I still be able to claim the credit? If so, is there a minimum amount that needs to be put down? I know for the pre/post-Aug 16 it needed to be at least 5%, but didn’t see anything similar for the changes that kick in Jan 1.

  2. Does anyone know how the MSRP limit will work? For example, MSRP for a sedan is $55k. The Volvo S60 Recharge is listed as eligible for the EV tax credit but only the base model comes in under $55k. If you add any accessories or a higher trim it goes over the $55k. Is the limit the actual MSRP on the window sticker of the specific vehicle you plan on buying or will it be the actual purchase price? Or better yet, do they only look at the base model MSRP for qualification?

  3. I’ll make around ~$35k in 2022, and I’ll be making ~$185k in 2023. If I were to take delivery of a 2023 BMW 330e in January 2023 or later, would I qualify for the EV tax credit with the new income limits?

  4. My and my wife’s AGI is over 300k in 2021, and 2022, and likely 2023, due to stock options (that we haven’t even sold unfortunately). Does this mean we are just out of luck for getting any types of credits? Or can we still get it as long as we buy and receive the car in 2022? It seems unclear

  5. Not sure if people still look here, but thought I’d try here first. I’m confused by the new law and how it specifically affects me. I ordered a Mach E in April and no word yet on production date and no VIN (though the priority code is 01 fwiw). I am curious on the tax credit in the following situations:

    1. I get the car in 2022 and it is a 2022 model
    2. I get the car in 2022 and it is a 2023 model
    3. I get the car in 2023 and it is a 2023 model

    In which cases will I be eligible for the 2023 tax credit of the full $7,500? In which will I only get half? And in which will I be SOL and get no credit? Thanks for the help!

  6. Question: I am going to build a 2023 Chevy Bolt and pay the 1000 reservation fee. It comes in January and I buy it. Will I be eligible for the 7,500 tax credit when taxes come around for the year of 2023??

  7. I’m not sure if this is the correct thread, but have a question on how to determine if a 2023 vehicle will qualify for the federal tax rebate vs a yr 2022. If I purchase an Audi Q5 PHEV 2023 vs a 2022, is there any reason it wouldn’t qualify if built/finished manufacturing in N. America? Presuming I purchase and take delivery of vehicle prior to Dec 31 2022.

  8. I make over $300k and my wife makes less than $150k. We file separate returns due to our deductions. The language seems to indicate a $300k limit for “joint returns” and a $150k limit for “all others”, which seems to indicate my wife can still claim the ev tax credit in 2023… can anyone confirm?

  9. If I build an ID.4 as follows, does the destination charge pushing the total cost above $55,000 mean it’s not eligible for the credit?

    Your Build Cost – $54,775 , Destination Charge – $1,295 , Total – $56,070

  10. Considering the uncertainty around the battery materials sourcing impacting 2023 tax rebates (filed and paid in early 2024) and assembly rules enacted since the bill was signed, I don’t know how average consumers can sift through a significant mix of conflicting incentives to order of wait several months to purchase an EV.

    I was looking into trading in our 2013 Toyota Camry with low miles (approx 60k) as a down payment. The monthly cost of fueling it is within $30-$50/month of the car payment for a Bolt after trade-in.

    I thought we could consider this as early as Jan 2023, but the battery materials sourcing rules and delayed tax credit until 2024 means a delay until fall 2023 is a wiser move.

    I wonder how many EV sales are adversely effected by the bill in 2023.

  11. I’m hoping to buy the 2023 Chevy Bolt EUV in the next few months. If it does end up qualifying for the refund, do I need to wait until 2023 to buy it? Is there such thing as making an arrangement with a dealership to hold a car until the new year starts?

    I appreciate any advice y’all have. I’m new to this.

  12. I signed a purchase contract on 8/1 and with $500
    deposit on Mercedes Benz EQB that has not been
    lunched ( the car lunched on September 1st 2022) I will
    be taking delivery of the car on September 5th. The car
    isn’t listed under ev credit on irs website since it just
    came out. I’m wondering if I will still get the $7500 tax
    credit since I have purchase contract before 8/16
    ( inflation reduction act passed date).

  13. I’m in the market for an EV but noticed that the car I want, the Bolt, no longer qualifies for the tax credit this year but will in 2023. If I buy it now, would I be able to take the credit in my 2023 taxes come 2024? Or would I be out of luck if I buy it before 2023?

  14. I haven’t seen any discussion on leases. In the prior law, I believe manufacturers took the full credit for leases. Some passed on some of the credit as an incentive to the consumer.

    Will that still be the case under the new law? Even if consumer is over AGI limit?

  15. Does anyone have a reference to where income limits are discussed? My MAGI will qualify for taxes filed for the 2022 income year, but next year I will be just barely over the limit. If I order a Chevy Bolt in December this year and get it delivered in February 2023, will I be able to claim the credit on my 2022 tax filing? What if it gets delivered in July 2023, after I already filed for 2022?

  16. Regarding the 2023 $7500 credit for qualified EVs (presuming one is income-qualified), what if one purchases two qualified EVs? Is the credit per household, per person, or per vehicle? Thanks.

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