EV credit with binding contract

[Cleanenergyadvocate]

I reserved a VW ID.4 2023 right before the inflation reduction act on 8/14. I am expecting car to be delivered by Dec-22 or Jan-23. I also have a EV purchase contract (binding agreement) with the dealer.

Can you confirm I qualify for $7,500 EV credit as per the IRS rules before inflation reduction act (less than 200,000 units for this car)? Can I avail this credit as a part of 2022 or 2023 tax filing depending on when it gets delivered? What other documents are required? 

[Critter-3]

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.”

If you purchase and take possession of a qualifying EV after 8/16/2022 and before 1/1/2023, and you satisfy the final North American assembly requirement (VW iD4 manufactured in Chattanooga TN), the "Pre-IRA 2022" rules apply. Based on below link, the credit should be $7,500 subject to further IRS update.

Index for Manufacturers published by the IRS

https://www.irs.gov/businesses/irc-30d-new-qualified-plug-in-electric-drive-motor-vehicle-credit

You can use the applicable EV credit on your tax year 2022 Federal tax return to offset the tax liability. However, the unused tax credits does not carryover or carry forward to 2023 if you do not use it in the year you purchased the vehicle (2022).

[Cleanenergyadvocate]

@Critter-3 Thanks for the response. What if the delivery of the car reserved with binding contract before inflation reduction act (8/16/2022) happens after Jan 1st, 2023? In this case, I should avail the credit for 2023 tax year, right? 

[Critter-3]

Correct.  You cannot take the credit until you have a VIN to enter which you will not have until you actually get the car title.

[mashhadi18]

Hello,

I received a brief written document from my BMW dealership that states a preliminary buyer's order on 7/17/2022 for a 2023 BMW i4 , VIN xxx with retail price of $xx. I paid a deposit for this car but the car is still in transit and will be delivered to me in January or February. 

I was wondering if I can claim EV tax credit in 2023 since my deposit took place before the new tax law (IRA). Will my brief document be enough as a binding contract?

[Critter-3]

You must wait until 2023 to take the credit since you will not have the required VIN in hand to take the credit. 

[mashhadi18]

Thanks for the reply!

I do have the VIN number. My question is wether I can get 2023 tax credit on this car or not. If not, I won’t purchase this car when it becomes available at the dealership and will think of another EV. 
The binding contract is a little vague for me since I haven’t signed any forms and the sales manager provided me a document for the EV TAX purposes describing VIN number, pre-order date, and my deposit.  They don’t know if that document is enough for IRS.