[DieterReuther]

Does somebody know how the Inflation Reduction Act will affect the Mini EV tax credit? Under the new law "only cars with batteries containing a certain percentage of materials sourced from North America or U.S. trading partners will qualify for the credits moving forward."

Rivian for example is “working to help interested preorder holders and customers obtain a written, binding contract to purchase and secure EV tax credit eligibility before new restrictions take effect. We’ll be sharing more information and next steps with customers directly.”

 

[pjvolks19]

Does somebody know how the Inflation Reduction Act will affect the Mini EV tax credit? Under the new law "only cars with batteries containing a certain percentage of materials sourced from North America or U.S. trading partners will qualify for the credits moving forward."

Rivian for example is “working to help interested preorder holders and customers obtain a written, binding contract to purchase and secure EV tax credit eligibility before new restrictions take effect. We’ll be sharing more information and next steps with customers directly.”

I'm not an attorney but based off the way I've read the bill, orders without purchase agreements won't qualify for the Transition Rule.

 

[jkoya]

Also not an attorney, but have been reading several reports there will be an "assembled in North America" requirement, though no details were given....

 

[MGFelt22]

Does somebody know how the Inflation Reduction Act will affect the Mini EV tax credit? Under the new law "only cars with batteries containing a certain percentage of materials sourced from North America or U.S. trading partners will qualify for the credits moving forward."

Rivian for example is “working to help interested preorder holders and customers obtain a written, binding contract to purchase and secure EV tax credit eligibility before new restrictions take effect. We’ll be sharing more information and next steps with customers directly.”

My dealer told me that my Mini EV would qualify since my purchase order was dated before the bill was passed. She is sending me paperwork to show if an audit of my ’22 taxes occurs. She said to go ahead and file for the federal incentive but to hold my purchase order in case I have to prove my purchase was made before the law went into effect.

 

[pjvolks19]

My dealer told me that my Mini EV would qualify since my purchase order was dated before the bill was passed. She is sending me paperwork to show if an audit of my ’22 taxes occurs. She said to go ahead and file for the federal incentive but to hold my purchase order in case I have to prove my purchase was made before the law went into effect.

Did your dealer let you sign a binding agreement? Mine is fighting me about it and just trying to say, "oh well."

 

[MGFelt22]

Did your dealer let you sign a binding agreement? Mine is fighting me about it and just trying to say, "oh well."

I think it’s just another copy of my purchase agreement. She said I would get it by email but I haven’t gotten it yet. She said that their lawyer recommended this for everyone who ordered an SE before the passing of Inflation Reduction Act.

 

[DieterReuther]

My dealer told me that my Mini EV would qualify since my purchase order was dated before the bill was passed. She is sending me paperwork to show if an audit of my ’22 taxes occurs. She said to go ahead and file for the federal incentive but to hold my purchase order in case I have to prove my purchase was made before the law went into effect.

It depends ... an order before August 16, 2022 only qualifies if there is a written binding contract. Our Boston dealer didn't offer such a contract and we'll probably not qualify for the $7,500 federal tax credit.

Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022
If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold). If you entered into a written binding contract to purchase a new qualifying vehicle before August 16, 2022, see the rule above.
What Is a Written Binding Contract?
In general, a written contract is binding if it is enforceable under State law and does not limit damages to a specified amount (for example, by use of a liquidated damages provision or the forfeiture of a deposit). While the enforceability of a contract under State law is a facts-and-circumstances determination to be made under relevant State law, if a customer has made a significant non-refundable deposit or down payment, it is an indication of a binding contract. For tax purposes in general, a contract provision that limits damages to an amount equal to at least 5 percent of the total contract price is not treated as limiting damages to a specified amount. For example, if a customer has made a non-refundable deposit or down payment of 5 percent of the total contract price, it is an indication of a binding contract. A contract is binding even if subject to a condition, as long as the condition is not within the control of either party. A contract will continue to be binding if the parties make insubstantial changes in its terms and conditions.

Source: Plug-In Electric Vehicle Credit IRC 30 and IRC 30D | Internal Revenue Service

 

[pjvolks19]

It depends ... an order before August 16, 2022 only qualifies if there is a written binding contract. Our Boston dealer didn't offer such a contract and we'll probably not qualify for the $7,500 federal tax credit.

Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022
If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold). If you entered into a written binding contract to purchase a new qualifying vehicle before August 16, 2022, see the rule above.
What Is a Written Binding Contract?
In general, a written contract is binding if it is enforceable under State law and does not limit damages to a specified amount (for example, by use of a liquidated damages provision or the forfeiture of a deposit). While the enforceability of a contract under State law is a facts-and-circumstances determination to be made under relevant State law, if a customer has made a significant non-refundable deposit or down payment, it is an indication of a binding contract. For tax purposes in general, a contract provision that limits damages to an amount equal to at least 5 percent of the total contract price is not treated as limiting damages to a specified amount. For example, if a customer has made a non-refundable deposit or down payment of 5 percent of the total contract price, it is an indication of a binding contract. A contract is binding even if subject to a condition, as long as the condition is not within the control of either party. A contract will continue to be binding if the parties make insubstantial changes in its terms and conditions.

Source: Plug-In Electric Vehicle Credit IRC 30 and IRC 30D | Internal Revenue Service

You're 100% correct. Since my dealer in San Diego refused to help me out and offer an agreement to qualify for the tax credit, I cancelled my order. I was so excited for a ~$30k car but now that it's ~$37, I'll spend a few thousand more and get a Model 3 with nearly 2.5 times the range and features, 4 months faster. If Rivian could offer its customers agreements, so could Mini dealers. Just one more example as to why I can't wait for franchised dealers to disappear and direct to consumer replace it.

 

[Mrflyguy]

The SE will not qualify for a rebate next year because it is not manufactured in the US (unless the law changes).

 

[amtrucker22]

@DieterReuther By reading what you posted

Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022
If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold). If you entered into a written binding contract to purchase a new qualifying vehicle before August 16, 2022, see the rule above.

To me that reads that even Minis purchased between those dates do not qualify. Is that how you read it?

 

[Mrflyguy]

@DieterReuther By reading what you posted

Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022
If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold). If you entered into a written binding contract to purchase a new qualifying vehicle before August 16, 2022, see the rule above.

To me that reads that even Minis purchased between those dates do not qualify. Is that how you read it?

Looks like it - "aside from the final assembly requirement" which means that that the final assembly requirement DOES apply to the MINI assembled in the UK. during this period. It appears that they are enforcing the US made requirement after August 16th but NOT removing the production caps until Jan 1. The whole thing couldn't be more difficult to figure out fro the average consumer! Dealers are useless and say "consult your tax advisor."

 

[amtrucker22]

It sucks for all the people who had orders in the pipeline.

 

[mini2023]

Hi,
I ordered my mini se on 6.1.2022 (Delivered 12.2022) and received a vehicle inquiry report (at the time of the order on 6.1.2022) which included a production number and a price of the car and options. Not sure what a purchase order this post is referring to.
I had a committed order and paid a deposit to commit to purchase. Dealer indicated this would qualify for the $7,500 credit.
Have a happy new year.
Thanks

 

[Mrflyguy]

One things for sure, dealers don’t know squat and wil tell you anything to sell a car. If you configured a car online (shop mini USA.com) and paid $250 deposit, doubt the “order date” counts for much. The deposit MINI collects does not represent a binding contract and either party can walk away. A better use of words would be the “in service date” which would more accurately represent the “wheels on the ground date” registered in your name. There’s going to be a lot of speculation on this until the IRS finalizes the 2022 EV credit form.

 

[mini2023]

One things for sure, dealers don’t know squat and wil tell you anything to sell a car. If you configured a car online (shop mini USA.com) and paid $250 deposit, doubt the “order date” counts for much. The deposit MINI collects does not represent a binding contract and either party can walk away. A better use of words would be the “in service date” which would more accurately represent the “wheels on the ground date” registered in your name. There’s going to be a lot of speculation on this until the IRS finalizes the 2022 EV credit form.

thank you, Happy new year

 

[Mrflyguy]

From npr 1/7….

“And the IRS is clear: When it comes to the timing of a purchase, it doesn't matter when you pay for a vehicle, it matters when you have the vehicle in your possession.”

 

[mini2023]

You're 100% correct. Since my dealer in San Diego refused to help me out and offer an agreement to qualify for the tax credit, I cancelled my order. I was so excited for a ~$30k car but now that it's ~$37, I'll spend a few thousand more and get a Model 3 with nearly 2.5 times the range and features, 4 months faster. If Rivian could offer its customers agreements, so could Mini dealers. Just one more example as to why I can't wait for franchised dealers to disappear and direct to consumer replace it.

Hi,
Just curious, was your deposit refunded.
Thanks