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January 3, 2023
Question

Do I receive 2023 EV tax credit if I placed a pre-order on 07/2022 but the car will be delivered in 2023?Deposit is paid and VIN is available.

  • January 3, 2023
  • 2 replies
  • 0 views
Hello,
I received a brief written document from my BMW dealership that states a preliminary buyer's order on 7/17/2022 for a 2023 BMW i4 , VIN xxx with retail price of $xx. I paid a deposit for this car but the car is still in transit and will be delivered to me in January or February. 
I was wondering if I can claim EV tax credit in 2023 since my deposit took place before the new tax law (IRA). 
Will this document be enough as a binding contract?

2 replies

January 3, 2023

it may not matter under the new rules

per the iRS

If you entered a written binding contract to buy a vehicle before August 16, 2022, but took possession on or after August 16, 2022, and before January 1, 2023, you may claim the credit based on the prior rules and disregard the assembly requirement.

 

this would seem to imply if you take delivery in 2023 the new rules apply.

1) Use it primarily in the U.S.
2) In addition, your modified adjusted gross income (AGI) may not exceed:

$300,000 for married couples filing jointly
$225,000 for heads of households
$150,000 for all other filers
You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. 

Qualified Vehicles
To qualify, a vehicle must:

1) Have a battery capacity of at least 7 kilowatt hours
2) Have a gross vehicle weight rating of less than 14,000 pounds
3) Be made by a qualified manufacturer. 
4) Undergo final assembly in North America (isn't the i4  assembled in Germany) 
5) You buy the vehicle new
6) The seller reports required information to you at the time of sale and to the IRS.
7) In addition, the vehicle's manufacturer suggested retail price (MSRP) can't exceed:

$80,000 for vans, sport utility vehicles and pickup trucks
$55,000 for other vehicles 

 

if you have questions, call the dealer. 

January 5, 2023

Thanks for the reply!

May I know more about "before January 1, 2023"? I cannot find that date anywhere.

October 11, 2023

There seems to be different interpretations to this. What is the final agreement on this? Does Turbotax allow this to be done in its forms for the 2022 tax year? Entered binding agreement before August 16, 2022, vehicle delivered and placed in service on Aug 2023.

October 11, 2023

@GOTK if you took delivery of the vehicle in 2023, then that goes on the 2023 tax return - not 2022 tax return. 

 

See "purchase vs delivery date"

 

https://www.irs.gov/credits-deductions/credits-for-new-electric-vehicles-purchased-in-2022-or-before

October 12, 2023

But that's not correct! The link you sent (purchase vs. delivery date section) does not say anything about car being delivered in 2023 (unless for orders after Aug 16, 2022). See this: If you purchased a vehicle between August 16, 2022 and December 31, 2022 but don't take delivery of the vehicle until 2023, ...

 

So, Turbotax is not gonna fix this to allow me and many others to use the tax advantage?