How to claim tax credit for Electric Vehicle and carryover of solar tax credit

[ekampt]

I have a question regarding the EV tax credit. I made a deposit (with a binding contract according to IRS) for my EV in April 2022, but I won't receive my EV car until sometime next year. According to the new EV tax credit, it states that as long as I make a deposit of 5% of the total cost of vehicle before Aug 16, 2022, I still can claim up to $7,500 under the old EV tax credit. My question is  Should I claim the EV tax credit for this year's taxes (2022) or wait until I receive my car and finish the financing to claim tax credit in 2023?  Another question is: I also have a carryover tax credit for a home solar power system from last year (2021). What will happen to my carryover tax credit for solar if I have to claim my EV tax credit this year? Thank you

[Critter-3]

If you will not get the car until 2023 then you can ONLY use the EV credit on the 2023 return.   If you put in solar in 2022 then you will use the solar credit on the 2022 return.  Any excess  credit you cannot use in 2022 carries to 2023.   Then in 2023 the EV credit is used FIRST then if you still have some tax liability left you can use the solar credit.  If you have any unused solar credit then it again carries forward to 2024. 

[Critter-3 · Accepted solution]

Inflation Reduction Act of 2022 (IRA 2022) signed into law on 8/16/2022. Hence terms used here are “Pre-IRA 2022” and “Post-IRA 2022.”

A Written Binding Contract: The IRS noted that a nonrefundable deposit or down payment of 5% of the purchase price can be an indication of this type of contract. This is a Federal credit, so we need to follow Federal rules. Based on your description, if your non-refundable deposit is 5% or more, I would say you have a written binding contract; therefore, can use the transition rule.

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. That means, your EV does not have to assembled in North America. You can use Pre-IRA 2022 rule.

Plus-In Electric Drive Vehicle Credit (IRC30D)

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

[ekampt]

Thank you very much for your answer. Now it makes more sense to me. When I claim EV tax credit in 2023 return, I should put the date of making deposit or the date of receiving a car? and how IRS will know that I claim this tax credit for old law?

[Critter-3]

The credit form will need to be updated for the changes  and the TT interview will also be changed so just follow the interview screens to enter in all the pertinent infomation required.