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Looks like this will finally pass.

Thank you, now rivian finally do not quilify the tax credit any more
 

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The proposed legislation would not go into effect until 2023 and is not a lock to pass Congress, but if it does, the cap would affect most Rivian buyers, including me.

Buying a Rivian was always going to be a stretch financially, and quite honestly, I need the tax credit to make the purchase work. I'll be monitoring the situation closely, and if it does turn out that a Rivian with a larger battery pack exceeds the threshold for the credit, will have to consider alternatives.
 

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No sure why you would say that. Rivian has NOT sold 200,000 vehicles and the MSRP is below the $80,000 price point.
MSRP will be more than 80000 for new buyers. And the standard battery pack is come from you guess it LFP in China. Starting in 2023 this new tax credit will replace the old 7500 credit which only make a few models qualifying. All Hyundai/Kia are out. All Europe brands are out. All Japanese brand are out in recent future. So this bill will cut 90% cars which is eligiable today then benefit Tesla and GM. Good job, Joe.
 

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Understood. But a lot of people seem to think that this tax credit is $7500 off the MSRP like you are getting a check form the government in the mail or something. That is HARDLY the case. This is a "credit" which means it can reduce your tax burden by $7500 (most). So in effect, (as I understand the tax code) to fully capitalize on this you have to OWE the IRS at least $7500+ to get 100% of the burden allocated. I (however) do not know if that $7500 can be amortized over several tax calendar filing years.
 

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MSRP will be more than 80000 for new buyers. And the standard battery pack is come from you guess it LFP in China. Starting in 2023 this new tax credit will replace the old 7500 credit which only make a few models qualifying. All Hyundai/Kia are out. All Europe brands are out. All Japanese brand are out in recent future. So this bill will cut 90% cars which is eligiable today then benefit Tesla and GM. Good job, Joe.
Understood. But a lot of people seem to think that this tax credit is $7500 off the MSRP like you are getting a check form the government in the mail or something. That is HARDLY the case. This is a "credit" which means it can reduce your tax burden by $7500 (most). So in effect, (as I understand the tax code) to fully capitalize on this you have to OWE the IRS at least $7500+ to get 100% of the burden allocated. I (however) do not know if that $7500 can be amortized over several tax calendar filing years.
While it's certainly the case that all Rivian orders after March will no longer qualify since they will exceed the threshold of $80k, I don't think you can rule out Kia and the European & Japansese makers.
Kia and many European & Japanese auto makers have plants in the US, and indeed, many of their models are only built in the US with significant North American content. That's actually the case for the Kia Telluride which is built here and not sold in Korea. It's not clear if the electric Telluride, the EV 9, will also be built in the US though. Battery sourcing may also be a factor, but I think it's too early to say for sure on that.

The new bill is more than a bit shortsighted, particularly for those of us who need a larger vehicle and want to go electric but for whom cost is a real issue.

As for the tax credit, it's doesn't require a particularly large income to have a $7,500 Federal tax liability. A taxable income of about $80k for a married couple is enough (that equates to total income of about $105,000 when the standard deduction is factored in). Someone in my situation - retired with SS and a small pension - can have that much in liability if they do what I planned to do and tap my retirement savings for the purchase. All of the money from a retirement account like a SDIRA is taxable, and since that withdrawal will then will take you above the tax threshold for Social Security, 2/3's of that income is also subject to Federal tax. I'm reasonably certain that the credit cannot be amortized and must be a single year.

You'll notice that used the past tense when I referred to purchasing the Rivian. That's deliberate: I'm out if this becomes law and the credit no longer available.
 

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The new credit is a rebate off at purchase time and you do not have to own tax credit in order to ultilize the credit.

the large battery pack with 2 motor AWD will probably still qualifydown the road. But that need to wait until 2024. All rivian delivery in 2023 will be early reservation anyway so their MSRP will be 80k or less. 2024 and after you just have to step down a little to qualify. It is not a bad deal if large pack with two motor AWD for 79k -7500. Consider that two motor may gets 330 miles of range
 

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For those of us who either already took delivery this year, or about to, none of this affects us right? We can still claim the $7500 tax rebate when filing taxes for 2022 year? Am I understanding that right?
 

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For those of us who either already took delivery this year, or about to, none of this affects us right? We can still claim the $7500 tax rebate when filing taxes for 2022 year? Am I understanding that right?
Yes, that is correct. If you purchase in 2022, the old rules still apply. You would be able to take a $7500 tax credit, assuming your tax liability is at least that much.
 

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The new credit is a rebate off at purchase time and you do not have to own tax credit in order to ultilize the credit.

the large battery pack with 2 motor AWD will probably still qualifydown the road. But that need to wait until 2024. All rivian delivery in 2023 will be early reservation anyway so their MSRP will be 80k or less. 2024 and after you just have to step down a little to qualify. It is not a bad deal if large pack with two motor AWD for 79k -7500. Consider that two motor may gets 330 miles of range
The credit is against your Federal income tax liability, and so reduces your tax bill. You don't get to deduct it from the price of the car. It would be great if it worked that way as it would also reduce the amount of sales tax you'll owe, but unfortunately it doesn't.

Rivian is presently only offering the Max with the quad motor R1T. They've indicated that it will be an option for the dual motor in 2024. I suspect that's optimistic however, and Rivian's track record does nothing to refute that. The range of the dual motor LR is a disappointing 320 miles; the Max will bump that to over 400, but how much more is not yet known. In any event, the dual motor is $73k and the Max package is $16, so you're going to be well over the $80k tax credit threshold. I suspect that the pricing by the time you can configure a dual motor in 2024 will be somewhat higher still.

I'm an early reservation holder and have an R1T Max configured. My delivery window is next year. Without options, but including the Max pack, I'm at $81,150, so will not be able to take advantage of the $7,500 if the new bill passes Congress
 

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The credit is against your Federal income tax liability, and so reduces your tax bill. You don't get to deduct it from the price of the car.
The previous versions of the BBB, and this one as well, have changed the EV tax credit into a refundable tax credit. This means it does reduce the price of your car at purchase. That is one of the goals as it will make EVs more immediately affordable rather than having to wait a year to get your money back.
 

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I'm at $81,150, so will not be able to take advantage of the $7,500 if the new bill passes Congress
I hope Rivian is doing some lobbying to try to avoid this problem. With all the talk about inflation, it would make sense to index this cap on the inflation rate so that next year it would be higher. It also makes sense to design the cap (if you're going to have a cap in the first place) so that it doesn't hurt sales of US car manufacturers like Rivian. Rivian could even play games like lower their MSRP and add "additional dealer markup" so that we all still qualify for the credit.
 

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The previous versions of the BBB, and this one as well, have changed the EV tax credit into a refundable tax credit. This means it does reduce the price of your car at purchase. That is one of the goals as it will make EVs more immediately affordable rather than having to wait a year to get your money back.
Thanks for this @O. horridus - I wasn't aware of the change in format, and assumed that because it is still called a tax credit, it worked in the traditional way. With few details available, it's difficult to tell how the new scheme will work though.

Rebates come at the end of the sale as a lump sum to the buyer; if they're "point of sale" as appears to be the case here, it's immediate. This scheme still uses the words "tax credit" however, which make things really murky. A tax credit reduces the amount of tax owed, so it would follow that you will still need to have a tax liability of at least $7,500 to use the full credit. Yet this too seems be changed in the new bill, with at least one article I found seeming to indicate that it was available regardless of your tax liability. While both a rebate and tax credit reduce the out of pocket cost to the buyer, since neither represents a discount to the actual sales price, the buyer is still on the hook for state sales tax calculated at full vehicle price (at least in most states).

Since the scheme appears to combine aspects of both a rebate and a credit, perhaps we will need to change the terminology and call it a "redit". Here's a small amount of detail from an article in InsideEVs (7/28):
"Finally, it appears the credit may be offered like a rebate at the point of sale, rather than as a credit at tax time. This would be huge since many people can't afford to finance an expensive EV and then wait until tax time to be "reimbursed." Moreover, since the current credit depends on an applicant's individual tax liability, many people can't get the credit anyhow. If you don't have $7,500 in tax liability, you're not going to get a $7,500 tax credit. However, a point-of-sale credit could work much differently."
 

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The biggest problem I see with this reform is the income limits, $150K for single and $300K for families. I am above the limits so no more tax credits for me regardless of EV MSRP.
I'm glad I'm getting mine this year because the income limit takes me out of the running for getting the tax credit next year.
[sigh] I can only wish I had this problem . . .
 

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MSRP will be more than 80000 for new buyers. And the standard battery pack is come from you guess it LFP in China. Starting in 2023 this new tax credit will replace the old 7500 credit which only make a few models qualifying. All Hyundai/Kia are out. All Europe brands are out. All Japanese brand are out in recent future. So this bill will cut 90% cars which is eligiable today then benefit Tesla and GM. Good job, Joe.
To add to that, the pricing of the Rivian would suggest typically a higher income buyer. With the new income limits, some buyers in Q1 2023 may go from getting a 7500 rebate to nothing at all even at current prices.

Not getting into the politics of is that good or bad. Just a simple fact that some folks may be affected without realizing it.
 

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Thanks for this @O. horridus - I wasn't aware of the change in format, and assumed that because it is still called a tax credit, it worked in the traditional way. With few details available, it's difficult to tell how the new scheme will work though.

Rebates come at the end of the sale as a lump sum to the buyer; if they're "point of sale" appears to be the case here, it's immediate. This scheme still uses the words "tax credit" however, which make things really murky. A tax credit reduces the amount of tax owed, so it would follow that you will still need to have a tax liability of at least $7,500 to use the full credit. Yet this too seems be changed in the new bill, with at least one article I found seeming to indicate that it was available regardless of your tax liability. While both a rebate and tax credit reduce the out of pocket cost to the buyer, since neither represents a discount to the actual sales price, the buyer is still on the hook for state sales tax calculated at full vehicle price (at least in most states).

Since the scheme appears to combine aspects of both a rebate and a credit, perhaps we will need to change the terminology and call it a "redit". Here's a small amount of detail from an article in InsideEVs (7/28):
"Finally, it appears the credit may be offered like a rebate at the point of sale, rather than as a credit at tax time. This would be huge since many people can't afford to finance an expensive EV and then wait until tax time to be "reimbursed." Moreover, since the current credit depends on an applicant's individual tax liability, many people can't get the credit anyhow. If you don't have $7,500 in tax liability, you're not going to get a $7,500 tax credit. However, a point-of-sale credit could work much differently."
The catch on whether you need a tax liability to claim the credit isn’t about whether it’s managed as part of your tax return process or a rebate at point of sale, it’s whether it’s classified as a “refundable” or “non-refundable” credit. The current credit is “non-refundable” meaning that you can only claim up to the amount of federal income tax liability you had for the year (which is the total amount of tax you paid, inclusive of withholdings, not what you owed at the end of the year). If it is indeed changed to a “refundable” credit, then that requirement goes away and you can get it regardless so long as you and Rivian meet the other requirements (income limits, MSRP, etc).

It’ll be interesting to see how they manage this as a point of sale rebate, because there’s no way to determine the income restriction at time of transaction.

I don’t think the politicians in DC give a rat’s ass about Rivian. Or even Tesla to a large degree. This bill will be shaped by the companies with deep pockets and well-oiled lobbying machines such as the Big 3, Honda, etc. who know how to play the game in DC. Tesla and Rivian are mere infants at that game, as witnessed by their inability to get dealer franchise laws changed.
 
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