Battery mineral content requirement delayed to March.

[metroshot]

If your vehicle isn't made in North American, you get squat.

If you pass hurdle #1, there are two components - $3,750 for battery assembly and $3,750 for battery sourcing.

Ah got it!

So my incoming MME (January 2023) will still qualify for the FULL $7500 tax credit until the IRS issues a new rule.

This still assumes any delivery in early 2023 before the IRS rules, income & MSRP limits still apply ?

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[RickLightning]

Ah got it!

So my incoming MME (January 2023) will still qualify for the FULL $7500 tax credit until the IRS issues a new rule.

This still assumes any delivery in early 2023 before the IRS rules, income & MSRP limits still apply ?

Yes, everything else applies.

 

[TaxmanHog]

I would not recommend making adjustments to Estimated tax deposits or federal tax withholdings on wages or other income like pensions to optimize the uncertain value of a credit until March!!

JMHO, YMMV test dummies were used on a closed course with this advice.

 

[EdwinT]

I would not recommend making adjustments to Estimated tax deposits or federal tax withholdings on wages or other income like pensions to optimize the uncertain value of a credit until March!!

JMHO, YMMV test dummies were used on a closed course with this advice.

Based on the statement that they are deferring till March, it seems definite that we are safe till then no? I will be taking delivery very end of the year or very beginning of next year, so I should be safe either way unless they magically come out with the guidelines between now and mid January. Should I still be concerned? Maybe I took your last statement the wrong way lol.

 

[TaxmanHog]

Based on the statement that they are deferring till March, it seems definite that we are safe till then no? I will be taking delivery very end of the year or very beginning of next year, so I should be safe either way unless they magically come out with the guidelines between now and mid January. Should I still be concerned? Maybe I took your last statement the wrong way lol.

I am advising a conservative approach for folks taking delivery from 1/1/23 to 3/31/23 with regard to their 2023 tax prepayment strategy.

Deliveries before 1/1/23 are not part of my advice, since the full $7500 under legacy law is still in effect, [assumed financial pre-conditions] and with only 11 days of payroll tax and the fourth quarter ES payment of 2022 federal income taxes on 1/15/23 due there is little wiggle room for optimizing 2022 pre-payments against expected 2022 credits.

 

[Maxx]

I would not recommend making adjustments to Estimated tax deposits or federal tax withholdings on wages or other income like pensions to optimize the uncertain value of a credit until March!!

JMHO, YMMV test dummies were used on a closed course with this advice.

Too late for me. I pulled some out of my retirement funds just in case I take delivery in 22 right before the announcement. The implementation of these carrots and sticks is not done well. And half the time, it does not serve the intended purpose. I love to see a study on how many people that can’t take full advantage of incentives would have bought an EV because of it that are not buying it now and how many that can, would have bought one anyways. I think they work much better at bolt end than Lightning Platinum level. Much bigger proportion of bolt.

 

[Pioneer74]

Too late for me. I pulled some out of my retirement funds just in case I take delivery in 22 right before the announcement. The implementation of these carrots and sticks is not done well. And half the time, it does not serve the intended purpose. I love to see a study on how many people that can’t take full advantage of incentives would have bought an EV because of it that are not buying it now and how many that can, would have bought one anyways. I think they work much better at bolt end than Lightning Platinum level. Much bigger proportion of bolt.

Isn't there a grace period where you can put the money back into your account without penalty?

 

[EdwinT]

I am advising a conservative approach for folks taking delivery from 1/1/23 to 3/31/23 with regard to their 2023 tax prepayment strategy.

Deliveries before 1/1/23 are not part of my advice, since the full $7500 under legacy law is still in effect, [assumed financial pre-conditions] and with only 11 days of payroll tax and the fourth quarter ES payment of 2022 federal income taxes on 1/15/23 due there is little wiggle room for optimizing 2022 pre-payments against expected 2022 credits.

Ahh ok my bad thanks! Something that doesn't pertain to me since I am your average W2 employee that doesn't make any estimated tax payments.

 

[cvalue13]

question is do we still try to sign papers/title before year end to be safe lol

I believe the relevant date is when the vehicle is put in service, not when you sign papers

 

[Maxx]

Isn't there a grace period where you can put the money back into your account without penalty?

Probably. Didn’t think of it. There is a very very tiny chance, I still may get mine in 22 so I don’t want to put it back in. It is not a huge amount. Just enough to get me to the limit of what I need to take full advantage. My income is probably as low as it is going to be so taking money out now is probably not too bad. If I have to do this again in 23, I will probably move it to Roth IRA.

These processes are so clunky for an average citizen. Paying sales tax on the money you are not spending (rebate). Having to have a minimum income to get the full incentive. Paying tax on the money you are losing (3% interest on CD, 8% inflation). Those with the low income probably need the incentive the most. Gotta stop the rant before I get in too deep.

Thanks for the tip.

 

[EdwinT]

I believe the relevant date is when the vehicle is put in service, not when you sign papers

“Put into service” is defined as titled in the buyers name. I prob won’t be doing that anyway since it’s slightly risky

 

[Blainestang]

I believe the relevant date is when the vehicle is put in service, not when you sign papers

Yeah, that's part of the reason I flew to go pick mine up instead of shipping it. That way, as soon as I drive it, it's definitely "in service", rather than risk some issue with shipping delays or whatever that result in me not getting it until after Jan 1, even if I've "owned" it for a few weeks.

 

[cvalue13]

“Put into service” is defined as titled in the buyers name. I prob won’t be doing that anyway since it’s slightly risky

just to avoid anyone else walking away with incorrect info: this is almost certainly not how the IRS defines “put into service” with respect to vehicles. (You may or may not get audited for it in the first place, but if you do I would not count on title date as being sufficient for an IRS that has gone to the posture of auditing you.)

ultimately, each individual should consult their tax professional on their specific facts and context.

But broadly speaking, the IRS generally finds as necessary (but not always sufficient) that the asset be physically possessed and available to the owner for its specifically assigned function to be considered “placed in service.”

Even possession alone may not be sufficient. indeed, the confusion here around the relationship of titling a vehicle and “in service” is likely borne of the typical circumstance that a person who already has possession of a vehicle may also need it to be titled/insured for it to be viewed as “available for its specifically assigned function.” But in this thread we’re talking about the opposite facts: a vehicle that is merely titled but for which the buyer has not yet taken possession of a vehicle.

again, anyone hoping to thread some technical needle before Dec. 31 should involve their tax professional in the minutia of their plans if the intent is to prevail in the scenario of an audit.

 

[EdwinT]

just to avoid anyone else walking away with incorrect info: this is almost certainly not how the IRS defines “put into service” with respect to vehicles. (You may or may not get audited for it in the first place, but if you do I would not count on title date as being sufficient for an IRS that has gone to the posture of auditing you.)

ultimately, each individual should consult their tax professional on their specific facts and context.

But broadly speaking, the IRS generally finds as necessary (but not always sufficient) that the asset be physically possessed and available to the owner for its specifically assigned function to be considered “placed in service.”

Even possession alone may not be sufficient. indeed, the confusion here around the relationship of titling a vehicle and “in service” is likely borne of the typical circumstance that a person who already has possession of a vehicle may also need it to be titled/insured for it to be viewed as “available for its specifically assigned function.” But in this thread we’re talking about the opposite facts: a vehicle that is merely titled but for which the buyer has not yet taken possession of a vehicle.

again, anyone hoping to thread some technical needle before Dec. 31 should involve their tax professional in the minutia of their plans if the intent is to prevail in the scenario of an audit.

This is straight from the IRS website. Maybe I am not interpreting it correctly but I take it as the title is put in your name. Essentially the sale is done and the vehicle is meant for you and not for someone else.

That’s all tax filing cares about anyway I would think. When was the deal done and also that the vehicle is actually meant for you to use. Put into service as you describe it would be near impossible to track and prove, so I’d be surprised if it meant any more than paid for and Titled (+ maybe registered/insured).

 

[TaxmanHog]

Jeeeez Louise, we're talking practical application of the law, 12/31/2022 is a Saturday, very few if any state RMV/BMV/DMV/Tag-Offices are operating on Saturday & Sundays', yet dealers are making deliveries on these days, intent and timing for the most part was not a tax avoidance strategy.

Reality is one could be nickeled & dimed on the matter, though it's unlikely, certainly consult your personal advisor and take the stance your most comfortable with.

Personally, if I were in this predicament, and I had the opportunity to take actual delivery and place my truck into service by driving from the dealership to my house is good enough, again we are talking personal use here not business use.

Though I'd be uncomfortable with a Saturday afternoon vehicle for vehicle trade-in, where one is legally allowed to attach the plates from the trade to the new vehicle, for up to five days while the paperwork (RMV-1) is processed (ie.) on Tuesday 1/3/2023. The most important thing a buyer has to be concerned with is that we have a binding insurance policy to cover liability risks, and where financing is involved, the bank would want loss protection in effect before the truck rolled off the dealer premises, all these efforts properly complied with demonstrate proper intent, I would fight any negative findings through every level of appeals up to and including the tax court and if necessary.

Would it be better to have these actions completed on 1/28 or 1/29, certainly, but on the cusp activities (1/31) are just as legal as earlier transactions.

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