Deductions & credits

Can you please help me understand...Are you saying that the date you sign the contract is the "date of acquisition" or  is the contract signing date the "date placed in service"? I was assuming the contract signing date is the "date of acquisition" (say December 24, 2022) and the "date placed in service" is the date when I take delivery of the vehicle (say January 1, 2023).  Is that correct?

I noticed the Energy.gov site has a section (https://afdc.energy.gov/laws/409) that is titled "Vehicles Placed In Service After December 31, 2022", but it doesn't mention anything like "Vehicles Acquired Before or After December 31, 2022"....so is the "Placed in Service" date the critical factor for Form 8936 and determines whether I would be able to claim the EV tax credit or is the "Date of Acquistion" is the determing factor or something else?

Vehicles Placed in Service After December 31, 2022

Beginning January 1, 2023, the Clean Vehicle Credit provisions remove manufacturer sales caps, expand the scope of eligible vehicles to include both EVs and FCEVs, require a traction battery that has at least seven kilowatt-hours (kWh), and establish criteria for a vehicle to be considered eligible that involve sourcing requirements for critical mineral extraction, processing, and recycling and battery component manufacturing and assembly. Vehicles that meet critical mineral requirements are eligible for $3,750 tax credit, and vehicles that meet battery component requirements are eligible for a $3,750 tax credit. Vehicles meeting both the critical mineral and the battery component requirements are eligible for a total tax credit of up to $7,500.

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Also, this link regarding IRS 30D:  https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d has a section that suggest that if you have a binding contract before the new IRA rules were in place, but take delivery after that date, the previous rules apply...which then makes me think that if I signed a contract in December 2022 (the acqusition date?) to purchase an EV, the rules on the acquistion date dictate whether a vehicle is eligible for a tax credit and the date I take delivery and therefore, place the vehicle in service does NOT determine tax credit eligibility...any idea? Thanks for any information you can provide.

Transition Rule for Vehicles Purchased before August 16, 2022

If you entered into a written binding contract to purchase a new qualifying electric vehicle before August 16, 2022, but do not take possession of the vehicle until on or after August 16, 2022 (for example, because the vehicle has not been delivered), you may claim the EV credit based on the rules that were in effect before August 16, 2022. The final assembly requirement does not apply before August 16, 2022.

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.

https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d