[Paladin1]

Bringing this from another forum, but for those unaware the new US IRA Bill will potentially affect tax credit for new EV purchases for US buyers. The summary is that it eliminates the tax credit for EVs costing more than $80k base, or for individuals above a certain income, or for EVs whose parts are sourced from other than the US, essentially starting in 2023. That's the simple version. The more complicated - amended - version is that this elimination will begin starting the day before the bill is signed into law (estimated now as 13 Aug 2022) for cars whose "final assembly" is not in the US. Any cars under the amendment purchased (and "purchased" may have a specific meaning) after that date will NOT receive the tax credit. This may eliminate the tax credit for any iX version purchased (or purchase order, or committed sale or actual purchase, or binding agreement, or something else) after this week. As in, starting next week. The particulars (specifics begin p402 for subsection b, "final assembly"):

https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_of_2022.pdf

 

[jeffgtx]

Regardless of what the argument is for or against I really think it should be out of bounds to change the tax rules for anything Within the tax year. You’re moving the goalpost during the game.

 

[hilld]

I agree. I pickup up my iX on Friday, so hopefully the bill won't be signed till Saturday to make sure there is no ambiguity.

 

[skubapooh]

That's really messed up. We adjusted our withholdings to ensure a $7500 tax deficit and now we'll probably end up owning penalties for underpayment. Changing the rules mid-year really should be off limits.

 

[BMWiX60M]

That's really messed up. We adjusted our withholdings to ensure a $7500 tax deficit and now we'll probably end up owning penalties for underpayment. Changing the rules mid-year really should be off limits.

FWIW, EV’s purchased by Dec 2022 as well as those ordered by the end of this year, will NOT be affected by the new bill. As long as EV delivery or orders are made by the end of year 2022, the existing rules still apply. Here is an article to that effect: Could new Federal EV tax credit crater EV sales until end of the year?.

 

[skubapooh]

Could new Federal EV tax credit crater EV sales until end of the year?

The issue is that the provision that the vehicle is built in the US goes into effect immediately once the bill is signed. So if you have an iX on order that will not be delivered in the next day or so, you're hosed.

 

[Shinaniganz]

FWIW, EV’s purchased by Dec 2022 as well as those ordered by the end of this year, will NOT be affected by the new bill. As long as EV delivery or orders are made by the end of year 2022, the existing rules still apply. Here is an article to that effect: Could new Federal EV tax credit crater EV sales until end of the year?.

That’s an old article. See an updated article from the same site (Senate improves EV tax credit in largest climate bill ever):

• If you have a signed purchase order or sign one before Biden signs the bill (i.e., this week) and then have to wait for delivery of an EV assembled outside of North America, you can still qualify for the current credit.
• If you buy an EV assembled outside of North America after the bill is enacted but before the end of the year, you may not get the current credit as the final assembly requirement goes into effect at enactment, but the mineral and battery materials requirements go into effect next year. So see if you can get a signed purchase agreement before the bill is signed (i.e., this week).

 

[Paladin1]

FYI - the bill has been amended, with the above results. Vehicles whose final assembly was outside the US will be ineligible for the tax credit when the bill is signed (13 August 2022). So any iX purchased after this Friday (assuming the 13 August signing date) will not get the tax credit (assuming also the bill passes the House unchanged, which it most certainly will). FWIW.

 

[BMWiX60M]

FWIW, EV’s purchased by Dec 2022 as well as those ordered by the end of this year, will NOT be affected by the new bill. As long as EV delivery or orders are made by the end of year 2022, the existing rules still apply. Here is an article to that effect: Could new Federal EV tax credit crater EV sales until end of the year?.

Admittedly, the details are still coming out and there are a lot of varying narratives out there on whether the existing federal tax credits get revised now or starting in 2023.
Here is another article that talks about new EV credit rules going into effect starting Jan 1, 2023 and that the current provisions fully allows EV’s purchased or ordered in 2022, even if delivery happens in 2023, to qualify for $7500 federal tax credit under the existing rule:Inflation Reduction Act renews $7,500 EV tax credit through 2032

In the end though, we will all see very soon the details emerge once the House passes the bill and is signed into law. I will keep my fingers crossed till there is clear verbiage that says the incentives and rules are retroactive to 2022 which, IMO, is highly unlikely.

 

[NomoTesla]

Lucid has opened up reservations for its closer to $100k model in order to protect customer tax credits. Apparently a reservation/pre-order is enough. Why doesn't BMW do this? BMW Corporate is way behind the ball on this, offering zero guidance to its dealers. I'm shocked by the lack of comms from corporate.

 

[sn123]

I upgraded my lucid deposit to order. If they don't deliver this yr then it will be useless anyway due to income cap

 

[NomoTesla]

Here is what Lucid states in its "binding contract" to protect everyone until the cars are delivered EOY or early next. It's inconceivable to me that BMW dealers cannot do the same thing. So simple and easy.

 

[Balockay]

So if I have an invoice for a custom order from a dealership does that suffice? Does anyone know? Plopped down $2,500 back in March, and would just love to have something to show for it. Still on the “wait list” for this thing to even get built. Between possibly losing the tax credit and seeing all these features deleted and pared down, I may just wait a couple years for all these kinks to get worked out.

 

[machop]

For people asking tax credit for IX, I thought IX will not qualify because SUV need to be less than 80k. It also has income cap and some components has to be manufactured in US. Is my understanding correct?

 

[Balockay]

For people asking tax credit for IX, I thought IX will not qualify because SUV need to be less than 80k. It also has income cap and some components has to be manufactured in US. Is my understanding correct?

Under the new law, yes, that’s my understanding. That’s why a lot of folks are upset. It’s changing rules for the current tax year in the middle of the year, which isn’t usually how it’s done.

 

[Paladin1]

For people asking tax credit for IX, I thought IX will not qualify because SUV need to be less than 80k. It also has income cap and some components has to be manufactured in US. Is my understanding correct?

That is correct. Once the bill is signed it becomes law, and stipulates that an EV over $80k base, or containing a certain percentage of components not sourced in the US, or if the purchaser (based on IRS returns) is over a certain income, it will not qualify for the tax credit, beginning 1 Jan 2023. An amendment to the bill entered in the Senate further stipulates that any EV whose final assembly was outside the US will not qualify either, beginning on the date the bill is signed - which will likely happen in the Rose Garden this Saturday. The House is currently in recess, but will return for a special session on Friday to vote on the bill, and the Speaker has pledged to send it to the President for signature without revision or dissent immediately on passing.

 

[saran]

That's really messed up. We adjusted our withholdings to ensure a $7500 tax deficit and now we'll probably end up owning penalties for underpayment. Changing the rules mid-year really should be off limits.

Tax liability is all you need .. tax deficit is not really required.

 

[TAB]

So if I have an invoice for a custom order from a dealership does that suffice? Does anyone know? Plopped down $2,500 back in March, and would just love to have something to show for it. Still on the “wait list” for this thing to even get built. Between possibly losing the tax credit and seeing all these features deleted and pared down, I may just wait a couple years for all these kinks to get worked out.

No, it probably wouldn't. This is why you need a sales agreement with your dealer before ~Saturday. Lucid, Rivian, Fisker are just changing their pre order paperwork to say its a sales agreement and nonrefundable deposit. That strategy may or may not work, but they're trying.

Most EV dealers, including IX, are going ahead and getting the sales contract, with VIN/tax/etc (if known) to ensure they are grandfathered in. But again, you may only have until Saturday to do this. No reason not to tell your dealer to do this.

 

[sn123]

EV tax credit was supposed to be helping EV adaption and new manufactures. This will hurt Lucid Rivian all American companies to help of big 3.

 

[Paladin1]

EV tax credit was supposed to be helping EV adaption and new manufactures. This will hurt Lucid Rivian all American companies to help of big 3.

I believe you are confused. American companies, with cars produced and sourced in America, will be least impacted by this bill. In fact it reopens eligibility for manufacturers like Tesla and Toyota (US-based). Virtually all EVs produced outside the US will not qualify for any tax credits, now (after this weekend) or in 2023. Nor will any companies whose parts are substantially sourced outside the US.