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Discussion Starter #1 (Edited)
With a new Administration and flipped control of the Senate, I am wondering if anyone thinks the Federal tax incentives for EV's (including Rivian) will increase in 22 which may be an advantage to those of us who passed on the Launch Edition in 21? According to the blurb below I found on his site, Pres. Biden wants to restore and/or expand the credit. Although it looks like he may want to target the Middle Class, so would that lessen the credit for higher end vehicles like Rivian? Would they be made retroactive to Jan. 1st, 2021? Obviously, this all has to get through Congress so who knows what will come out.

I am not looking for political arguments (haven't we all had enough of that?) about the merits of the credits, just objective opinions if if you think they will increase, decrease, stay the same or go away. I am more interested in what will happen rather than what what we hope will or should have happened.

"
  • Accelerating the deployment of electric vehicles. There are now one million electric vehicles on the road in the United States. But a key barrier to further deployment of these greenhouse-gas reducing vehicles is the lack of charging stations and coordination across all levels of government. As President, Biden will work with our nation’s governors and mayors to support the deployment of more than 500,000 new public charging outlets by the end of 2030. In addition, Biden will restore the full electric vehicle tax credit to incentivize the purchase of these vehicles. He will ensure the tax credit is designed to targeted middle class consumers and, to the greatest extent possible, to prioritize the purchase of vehicles made in America. And, he will work to develop a new fuel economy standard that goes beyond what the Obama-Biden Administration put in place.

 

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If he's going to restore the tax credit for all companies, including GM and Tesla then I think it's possible that it expands to include vehicles like Rivian. Though it's hard for me to say being in Canada. I really hope he does make it easier for people buy EVs and expand charging networks.
 

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I believe the $7,500.00 tax credit applies to a Rivian purchased this year. If he were to increase the tax credits, I imagine it would be across the board and not penalize higher priced vehicles. Just my two cents, tho.
 

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I personally do not like tax credits as enticements, but I will put that aside. From the point of view of helping lower incomes get into EVs, I just do not think it works. The limiting factor for most people buying cars is getting qualified for a loan, and the banks do not see the tax credit as a reduction in the loan amount. Also for lower end incomes, most do not even have a tax bill of $7500 anyway, so they cannot get the full amount. Just as an example, my son and his wife made $80K last year (middle class) and paid $4100 in federal income tax, with 1 dependent child. This year they will claim 2 children and have an even lower bill.

I would rather see the government provide tax incentives to the companies building charging networks (EA, EVGO, ChargePoint, Greenlots) so that we get more competition in that area.
 

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R1S, Forrest Green/Black
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I thought the Rivian qualified anyway because of the production numbers, but I could be wrong. I hope they not only extend the EV credits but figure out a better way to do it. For example, instead of 7500 off the purchase price, how about $2500 deduction every year regardless of income level, as long as you own the vehicle. Sure after 3 years the 7500 would be equal but if you own the EV for 5 or 6 years you are helping the environment so let's encourage people.

If they can try to give tax credits for private planes and yachts then we can try for EVs.
 

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I personally do not like tax credits as enticements, but I will put that aside. From the point of view of helping lower incomes get into EVs, I just do not think it works. The limiting factor for most people buying cars is getting qualified for a loan, and the banks do not see the tax credit as a reduction in the loan amount. Also for lower end incomes, most do not even have a tax bill of $7500 anyway, so they cannot get the full amount. Just as an example, my son and his wife made $80K last year (middle class) and paid $4100 in federal income tax, with 1 dependent child. This year they will claim 2 children and have an even lower bill.

I would rather see the government provide tax incentives to the companies building charging networks (EA, EVGO, ChargePoint, Greenlots) so that we get more competition in that area.
I support this.
It would also trickle down to us with incentives from those companies, although short-term.
 

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I personally do not like tax credits as enticements, but I will put that aside. From the point of view of helping lower incomes get into EVs, I just do not think it works. The limiting factor for most people buying cars is getting qualified for a loan, and the banks do not see the tax credit as a reduction in the loan amount. Also for lower end incomes, most do not even have a tax bill of $7500 anyway, so they cannot get the full amount. Just as an example, my son and his wife made $80K last year (middle class) and paid $4100 in federal income tax, with 1 dependent child. This year they will claim 2 children and have an even lower bill.

I would rather see the government provide tax incentives to the companies building charging networks (EA, EVGO, ChargePoint, Greenlots) so that we get more competition in that area.
Agree. I would rather it be a tax rebate than a credit. To expand on this a little bit, another challenge or downside to the "tax credit" is towards those on ACA (aka Obama Care). To qualify for the most medical insurance premium subsidy your MAGI has to be around $20k. The higher the MAGI, the less in subsidy. Well, a 20k MAGI basically translate to a low or zero tax liability, meaning, you would get very little to none of the $7500 federal tax "credit." It's like the squeezing-the-balloon example. When you attempt to better one of the two (by squeezing one side of the balloon), you make it worse for the other.

One thing I heard (rumored) is the 200k vehicle limit per manufacturer before the tax credit enters the phase out stages, is that Bidden admin may increase that limit. This won't affect those Rivian buyers now but hopefully this means there will be other changes (e.g higher credit, change credit to rebate, etc) we can look forward to, sooner than later.
 

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Agree. I would rather it be a tax rebate than a credit. To expand on this a little bit, another challenge or downside to the "tax credit" is towards those on ACA (aka Obama Care). To qualify for the most medical insurance premium subsidy your MAGI has to be around $20k. The higher the MAGI, the less in subsidy. Well, a 20k MAGI basically translate to a low or zero tax liability, meaning, you would get very little to none of the $7500 federal tax "credit." It's like the squeezing-the-balloon example. When you attempt to better one of the two (by squeezing one side of the balloon), you make it worse for the other.
Should people with 20k MAGI be buying NEW cars? I don’t think so.
 

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Agree. I would rather it be a tax rebate than a credit. To expand on this a little bit, another challenge or downside to the "tax credit" is towards those on ACA (aka Obama Care). To qualify for the most medical insurance premium subsidy your MAGI has to be around $20k. The higher the MAGI, the less in subsidy. Well, a 20k MAGI basically translate to a low or zero tax liability, meaning, you would get very little to none of the $7500 federal tax "credit." It's like the squeezing-the-balloon example. When you attempt to better one of the two (by squeezing one side of the balloon), you make it worse for the other.

One thing I heard (rumored) is the 200k vehicle limit per manufacturer before the tax credit enters the phase out stages, is that Bidden admin may increase that limit. This won't affect those Rivian buyers now but hopefully this means there will be other changes (e.g higher credit, change credit to rebate, etc) we can look forward to, sooner than later.
Or perhaps a refundable credit would be nice. Where you get the tax liability reduced and you also still get the difference as a refund. I own a business, its not hard to have a liability of $7500 when your self employed. I was never a fan of the ACA self employed got really messed up trying to guess their future incomes and go back in and adjust or be forced to pay it back , (surprise) at the end of the year. Never made for good conversation with my clients. Its about time the middle class got some good tax breaks. The EIC and all that ACA helped the poor earn middle class salaries with their 9k in tax credits. rebate over the course of three years works too, kind of like the NOL (the net operating loss) that carries forward or backwards if not all used up in one year.
 

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Should people with 20k MAGI be buying NEW cars? I don’t think so.
Should someone with a handle of CommodoreAmi buy a new car? I suspect you wouldn't want someone answering that for you unless you provided the answer. The M in MAGI is for modified. You or anybody else would have no idea what someone's financial circumstances are (besides maybe their accountant :) ) based on one metric.

In addition, the purchase of a new EV is not, nor should it be, reserved for those that make above a certain amount. In the US, unlike some other countries, there's a very good chance they're driving a vehicle, an ICE vehicle to be specific. The intent of a tax incentive is to bring the cost of an EV to be more affordable to the masses. If someone wants to do their part to help reduce carbon emissions by buying a new ZEV and they can make it work financial, more power to them. Not my or your place to tell them otherwise. My earlier point is about the purchaser being able to take advantage of any EV incentive at the time of purchase versus having to wait until filing their next tax return. Without the immediate savings, they would have to initially fund the full purchase amount without the tax incentive which for some means possibly a higher loan amount to be approved and more interest paid on said loan.
 

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Or perhaps a refundable credit would be nice. Where you get the tax liability reduced and you also still get the difference as a refund. I own a business, its not hard to have a liability of $7500 when your self employed. I was never a fan of the ACA self employed got really messed up trying to guess their future incomes and go back in and adjust or be forced to pay it back , (surprise) at the end of the year. Never made for good conversation with my clients. Its about time the middle class got some good tax breaks. The EIC and all that ACA helped the poor earn middle class salaries with their 9k in tax credits. rebate over the course of three years works too, kind of like the NOL (the net operating loss) that carries forward or backwards if not all used up in one year.
I'm not a fan either of how the ACA premium subsidies are calculated and adjusted especially like you mention about predicating one's future MAGI. I can certainly see being self-employed could easily generate a tax liability of at least $7500 but the majority of the work force is not self-employed. In addition I suspect a fair amount of those workers are not earning/generating enough income to a have a tax liability that high. And there's a growing, older population of people out of work but not old enough to retire, meaning, collect SS, tap their retirement savings or even go on Medicare. So $7500 tax liability is out of reach for them. Don't get me wrong, that's a good thing in most cases, just not when you're trying to take advantage of any tax credits. Back to ACA, it does provide headaches and short-comings with the self-employed and gig workers, and that sucks, at least what I hear from many family and friends. :) None the less, ACA is the game in town for a lot of people and they have to deal with it the best they can. It will be interesting to see how much the new administration will attempt to revise the ACA, if at all, in addition to the EV tax incentives.
 

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Should someone with a handle of CommodoreAmi buy a new car? I suspect you wouldn't want someone answering that for you unless you provided the answer.
Probably not the best question to ask me, because the answer is “I have not a single F to give about how you feel about my purchases”.
 

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I'm not a fan either of how the ACA premium subsidies are calculated and adjusted especially like you mention about predicating one's future MAGI. I can certainly see being self-employed could easily generate a tax liability of at least $7500 but the majority of the work force is not self-employed. In addition I suspect a fair amount of those workers are not earning/generating enough income to a have a tax liability that high. And there's a growing, older population of people out of work but not old enough to retire, meaning, collect SS, tap their retirement savings or even go on Medicare. So $7500 tax liability is out of reach for them. Don't get me wrong, that's a good thing in most cases, just not when you're trying to take advantage of any tax credits. Back to ACA, it does provide headaches and short-comings with the self-employed and gig workers, and that sucks, at least what I hear from many family and friends. :) None the less, ACA is the game in town for a lot of people and they have to deal with it the best they can. It will be interesting to see how much the new administration will attempt to revise the ACA, if at all, in addition to the EV tax incentives.
Agreed, I’m an Enrolled Agent and own two tax offices. Will be very interesting to see what comes out of this new administration, hopefully not more tax hikes. With all this free money going around I think we all might be in for it soon. I want that tax credit for the chargers for this year too. Again we’ll see. At least it’s headed environmentaly in the right direction... :)
 

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Probably not the best question to ask me, because the answer is “I have not a single F to give about how you feel about my purchases”.
Exactly, you just made my point. Just as you shouldn't have a single F to give if someone who has a MAGI of $20k buys a new car. ... Moving on ...
 

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Exactly, you just made my point. Just as you shouldn't have a single F to give if someone who has a MAGI of $20k buys a new car. ... Moving on ...
Do you seriously not understand the difference between my right to have an opinion about a subject and my right to not care what your opinion is about me?

These are not mutually-exclusive concepts.
 

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Personally they should make it a tax credit on any EV for anyone who buys it. This way you push people in that direction over the ICE alternative. No 'If I make X I get Y back' crap. If you buy an EV you get $7500 off you taxes that year or $2500 a year for 3 years as long as you still own the vehicle. Our tax code gets too complicated only because it does, it doesn't have to be.
 
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