Federal Rebate on 2023 Ford Lightning Rebate in 2022?

[metroshot]

https://electrek.co/2022/12/19/us-treasury-delays-ev-battery-guidance-qualify-for-2023-tax-credits/
Dec 19 2022 — 7:16 pm PT

US Treasury delays EV battery guidance, more vehicles could qualify for 2023 tax credits


As reported by Reuters, the US Treasury Department has delayed its battery guidance for qualifying EV tax credits until sometime in March. Still, requirements like North American assembly of the EV as well as caps on MSRP and annual salary will still go into effect on January 1 as planned.

However, since the US government is unable to provide guidance on the battery requirements, there is a possibility that some EVs sold between January 1 and “sometime in March” that will inevitably not comply with the pending battery guidance may briefly still qualify for federal tax credits.

Excellent news!

That mean those that are getting early 2023 deliveries will qualify for the full $7500 tax credit!

Great window of opportunity but will the MSRP and income limits apply for these early 2023 deliveries ???

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[Pioneer74]

Can someone remind this thread (and me) what the new income limits are? IIRC the MSRP limit was 80k.

AGI of $150,000 for a single filer, $300,000 married. $80,000 MSRP on trucks and SUV's, cars up to $55,000.

https://electrek.co/2022/12/13/which-electric-vehicles-still-qualify-for-us-federal-tax-credit/

 

[Sdctcher]

A bit off subject but maybe a fall back strategy for those having to abandon their Lightning purchase?

The Chevy Bolt is about to be a screaming deal – at least until March

https://electrek.co/2022/12/20/the-chevy-bolt-is-about-to-be-a-screaming-deal-at-least-until-march/

This means that a base model Bolt, assuming it can be purchased at MSRP, and assuming the buyer can take full advantage of the tax credit, could be had for the price of $18,100 – or even less, if you take into account state and local incentives. Potentially, this could be the cheapest new car in America for the right buyer.

It looks like the Bolt is about to be even more of a screaming deal, but potentially only for a few months until the Treasury gets its guidance out.

 

[jimfigler]

I asked the same question to the department of energy. Here is their response.


In short, we think the 2023 Ford F150 Lighting will be added to the list of eligible vehicles but we cannot say for sure when.

Since the passage of the Inflation Reduction Act, it has become increasingly difficult to provide simple definitive answers to questions like yours. However, we think it will be listed because the 2022 model was listed as eligible and it remains unchanged for the 2023 model year as far as we know. Like the 2022 model, the 2023 Ford F150 Lighting model also meets the new requirement for final assembly in North America as noted on this NHTSA 583 Report for 2023:
https://www.nhtsa.gov/part-583-american-automobile-labeling-act-reports

The EPA has not yet released data for the 2023 Ford F150 Lightning to post on fueleconomy.gov. We think that as soon as the EPA releases that data to us, it will get added to the following list which the IRS is currently directing people to:
https://afdc.energy.gov/laws/electric-vehicles-for-tax-credit

I hope this is at least somewhat helpful.

Sincerely,

Fueleconomy.gov

They Have a VIN check at the bottom of the energy.gov page that comes back with USA

 

[TaxmanHog]

I like to keep my eye on ~Official~ sources

Summary of recently issued [IRS] news releases.
https://www.irs.gov/inflation-reduction-act-of-2022

Summary of US Department of Treasury press releases.
https://home.treasury.gov/news/press-releases

1. https://home.treasury.gov/news/press-releases/jy1173

 

[EdwinT]

https://www.kiplinger.com/taxes/605081/ev-tax-credit-inflation-reduction-act-2022-changes

If you’re single, and your modified adjusted gross income is over $150,000, you won’t qualify for the EV tax credit. The EV tax credit income limit for married couples who are filing jointly is $300,000. And if you file as head of household and make $225,000 or more, you also won’t be able to claim the credit.

Vehicle price and type also matter. Vans, pickup trucks, and SUVs with a manufacture’s retail suggested price (MSRP) of more than $80,000, won’t qualify for the credit. For clean cars to qualify for the EV tax credit, the MSRP can’t be more than $55,000.

this salary cap starts next year though right (i.e. not currently in place for 2022)?

 

[EdwinT]

A bit off subject but maybe a fall back strategy for those having to abandon their Lightning purchase?

The Chevy Bolt is about to be a screaming deal – at least until March

My EXACT thought!!!

 

[khatch]

I feel like some of the responses have complicated the issue a bit. If you buy it in 2022, yes it qualifies regardless of the truck's price or model year, or your income. Assembly location matters if purchased in 2022 but I believe it is known that the 2023 Lightning is built in the USA. And it is correct that in order to have a tax credit of 7500, you have to have a tax liability of at least 7500. Liability meaning you need to pay at least 7500 for 2022 taxes (whether already withheld from paychecks or not).

If you wait to make the purchase in 2023, there are a lot more uncertainties and requirements. I would NOT wait if I were you.

 

[THEBO55]

Is the FICA tax considered in the federal liability when considering the EV tax rebate?

Does anyone know what is the maximum rebate If I register on an LLC business?

 

[TaxmanHog]

Is the FICA tax considered in the federal liability when considering the EV tax rebate?

Does anyone know what is the maximum rebate If I register on an LLC business?

No, FICA (aka Social Security and Medicare taxes) as listed on wage reporting statement w-2 does not come into play at all.

Self Employment tax (Schedule-SE / Sch-2), which is an additional tax like FICA is ~BELOW~ the line where the EV credits come into play, in other words, if you had modest self employment income and enough other deductions, schedule-A etc to lessen your income tax to a low or even zero value, but still had a bunch of self employment taxes, this credit can't be used to offset that liability.

This graphic demonstrates how unused credits might impact a modest income self employed person, line 22 is the critical break point, only $1000 dollars of the credit neutralized the income taxes on line 18, leaving $6500 on the table that can't be used to neutralize the taxes on line 23

Regarding the LLC, you need to speak with YOUR CPA, structure and reporting methods 1120s, or 1040/Sch-C might impact how that is handled, make sure the vehicle is purchased and titled in the operating entity name as well, many issues to be sort out, but the I-R-A does have generous provisions for commercial businesses (NOT PERSONAL USE) shell activities.

 

[THEBO55]

No, FICA (aka Social Security and Medicare taxes) as listed on wage reporting statement w-2 does not come into play at all.

Self Employment tax (Schedule-SE / Sch-2), which is an additional tax like FICA is ~BELOW~ the line where the EV credits come into play, in other words, if you had modest self employment income and enough other deductions, schedule-A etc to lessen your income tax to a low or even zero value, but still had a bunch of self employment taxes, this credit can't be used to offset that liability.

This graphic demonstrates how unused credits might impact a modest income self employed person, line 22 is the critical break point, only $1000 dollars of the credit neutralized the income taxes on line 18, leaving $6500 on the table that can't be used to neutralize the taxes on line 23

Regarding the LLC, you need to speak with YOUR CPA, structure and reporting methods 1120s, or 1040/Sch-C might impact how that is handled, make sure the vehicle is purchased and titled in the operating entity name as well, many issues to be sort out, but the I-R-A does have generous provisions for commercial businesses (NOT PERSONAL USE) shell activities.

Do you think the federal liability from 1099-K income used to get federal EV credit?

 

[TaxmanHog]

Do you think the federal liability from 1099-K income used to get federal EV credit?

These are things your CPA can handle a more personalized explanation about, details we don't need to know about in the WWW.

I'll assume you're talking about potential gross receipts via a third party payment processors, (aka, paypal, ebay, grubhub, uber, etc) if the NET PROFIT of your business including all other income and losses runs above the AGI thresholds, then obviously yes, but if the the net profit along with all your other income (losses) keeps it under the threshold then not really.

Gross receipts is not net income.

 

[techdaddy3x]

The model year is irrelevant from a tax perspective.

THIS! Year is irrelevant. All that matters right now is that it is new.
After Jan 1, incentives depend on final selling price of vehicle + new vs used

 

[brewski]

It looks to me like after Jan 1 the price cap and income restrictions will apply even if the battery component portion will not…yet
A post Jan 1 delivery is a giant turd sandwich for me.

 

[EdwinT]

It looks to me like after Jan 1 the price cap and income restrictions will apply even if the battery component portion will not…yet
A post Jan 1 delivery is a giant turd sandwich for me.

Why? Because the other requirements or another reason?

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