Tesla Model Y EV credit

[meenasrini]

Tesla model Y bought Dec 26, 2021, Taxes and fees paid in Jan 2022 and placed in service Jan 2022. Does this qualify for the new EV rebate and claimed in the 2022 tax return?

[JohnW152]

The Tesla Model Y isn't among vehicles that are eligible for a credit on your federal tax return.

Please see the IRS' Manufacturers and Models for New Qualified Clean Vehicles Purchased in 2022 and Before page for more information.

If your vehicle were qualified, you would be able to claim the credit in the tax year in which it was placed into service. 

So, based on your fact scenario, you'd claim the credit on your 2022 tax return, if your vehicle were qualified.

See Certification and Other Requirements in the Instructions for Form 8936 (01/2022). 

[meenasrini]

Thanks much, John. So even after the rule revision of including the Model Y's upto 80K for the 2022-2023 model, I would not qualify, I presume?

[Vanessa A · Accepted solution]

The rules were just updated a few days ago.  The IRS website has not been updated yet to include the Model Y or any of the other changes announced by the Dept. of Treasury as of today.  However, digging into the Treasury Departments statement that was issued, it does appear that if you purchased the Model Y for less than $80,000, after January 1, 2023 that you would be eligible for the credit, but not until the 2023 tax year. 

"Customers who have purchased and placed in service vehicles since January 1, 2023, that qualify under the EPA Fuel Economy Labeling classification standard announced today and who satisfy the other clean vehicle tax credit requirements can claim the credit, including customers with vehicles that did not qualify under the prior EPA CAFE standard."  Treasury Update 2/3/2023

So, unfortunately, tax payers who purchased the Tesla Model Y and other similar vehicles in 2022, are not eligible for the credit. 

(Edited 2/6/2023 @ 12:31PM PST)

@meenasrini 

[meenasrini]

Thanks much, Vanessa. Greatly appreciate it.

[Opus 17]

As far as I can tell, the new rules only apply to vehicles placed in service in 2023.  The old rules apply for 2022 and the model Y does not qualify.  

https://www.cbsnews.com/boston/news/tesla-model-y-qualifies-for-7500-ev-tax-credit-gm-ford-vw-irs-ru...

"Last year, Teslas weren't eligible for a tax break under a previous federal credit program because the company had reached a limit of 200,000 vehicles sold. But the tax credits through the IRA don't have such a limit, which means more buyers may be able to lower the purchase price of a Tesla this year through the tax credit. "

[Opus 17]

Here's another article.

https://finance.yahoo.com/news/inflation-reduction-act-carves-ev-100010333.html?guccounter=1

[meenasrini]

Thank you very much!

[bluetaxbird]

Hello guys, I just wanted to double check before I let this go completely.

I reversed the a Tesla Model Y, which shown on agreement as "Accepted by Customer on 06/12/2019"

But didn't put in services until 03/21/2022, which is the date shown on agreement as "Date of Agreement"

With the change in tax law, do I know qualify for the EV credit?

Thank you in advance.

😉

[NCperson]

@bluetaxbird - since your vehicle was placed in service prior to the passage of the Inflation Reduction Act, your tax credit is based on the "old" law.  

you have not provided enough detail to provide any feedback on whether you qualify for an EV Tax Credit.  these are the vehicles that qualify: 

https://www.irs.gov/credits-deductions/manufacturers-and-models-for-new-qualified-clean-vehicles-pur...

[bluetaxbird]

I have Tesla Model Y. Any other detail you need? Thanks

[NCperson]

@bluetaxbird a Tesla placed in service in 2022 is not eligible for the EV tax credits. 

review the link I provided in my last post.  it is the IRS website stating that 2022 Teslas are not eligible vehicles. 

[bluetaxbird]

:(

but thank you!

[LKnight13]

Model Y now qualifies. Under the SUV's under $80k. But it's confusing because the date range on this article includes 2022.  So it only appears that 2022 is the gap year that is causing everyone a headache.

https://www.cbsnews.com/boston/news/tesla-model-y-qualifies-for-7500-ev-tax-credit-gm-ford-vw-irs-ru...

[spcorbett07]

If Tesla Model Y was not included in the EV Tax credit in the year 2021 why did TurboTax not state anything when completing the tax return? TurboTax only asked if a New Electric Vehicle was purchased.  It did not state anything regarding Tesla or the specific model not being qualified. That is a faulty system within TurboTax and does not help their customers.