[mrcleop]

But if the credit is transferred to the dealer (which is the election referred to in the bill), then the customer has nothing to report on their own return...?

I think the dealer is just acting as the middleman so that the buyer gets their tax credit right away. That’s why the dealer has to report back the SSN. The dealer is like an escrow account. They aren’t actually getting to keep that money.

 

[knoepler]

The only part of the bill that I've seen is the excerpt that you posted on Saturday ("The Secretary shall establish a program...") So are you saying that the way it's written the dealer will actually be the beneficiary, leaving it up to the dealer whether to pass some or all of the $7500 along to the buyer? So far the consensus seems to be that under the new law the buyer will be getting a credit, just as under the old law.

 

[knoepler]

I think the dealer is just acting as the middleman so that the buyer gets their tax credit right away. That’s why the dealer has to report back the SSN. The dealer is like an escrow account. They aren’t actually getting to keep that money.

That's an interesting interpretation. So if you're right, when I purchase a Bolt the dealer will get $7500 from the government, at which point... ?

 

[mrcleop]

That's an interesting interpretation. So if you're right, when I purchase a Bolt the dealer will get $7500 from the government, at which point... ?

I think how it will work is the government gives dealers a certain amount of money up front, and they distribute the $7500 to each buyer. Then they report to the IRS the SSN and VIN. That way the buyer can’t claim the credit again and say they elected not to get it at point of sale. But I’m just guessing here. It’ll probably take until December 31 for the government to figure this out, and then another 3 months before the dealers understand what to do.

 

[MichBolt]

The only part of the bill that I've seen is the excerpt that you posted on Saturday ("The Secretary shall establish a program...") So are you saying that the way it's written the dealer will actually be the beneficiary, leaving it up to the dealer whether to pass some or all of the $7500 along to the buyer? So far the consensus seems to be that under the new law the buyer will be getting a credit, just as under the old law.

There's a link to the text in post 67 above. One provision says:

(g) TRANSFER OF CREDIT.—
(1) IN GENERAL.—Section 30D is amended by striking subsection (g) and inserting the following: ‘‘(g) TRANSFER OF CREDIT.—
‘‘(1) IN GENERAL.—Subject to such regulations or other guidance as the Secretary determines necessary or appropriate, if the taxpayer who acquires a new clean vehicle elects the application of this subsection with respect to such vehicle, the credit which would (but for this subsection) be allowed to such taxpayer with respect to such vehicle shall be allowed to the eligible entity specified in such election (and not to such taxpayer).

 

[mrcleop]

In any case, I don’t think all the unknowns will be known by the time my Bolt arrives in September, so I’m probably just going to take delivery and be happy with a new car. I don’t think I want to risk losing my $1000 nonrefundable deposit just to see Chevy raise prices by $7500, so I end up down $1000. It’s highly unlikely, but still possible.

 

[knoepler]

There's a link to the text in post 67 above. One provision says:

so... it sounds like in theory you could decline to take the $7500 when you buy the car and instead claim it when you file your 1040 for that year, which would seem to imply that the new tax credit works exactly like the old one, taking $7500 off your tax bill (or less if your tax liability is less than $7500.) In practice almost everyone will "elect" to take the $7500 when they buy the car, and the government will reimburse the dealer. However, if it really is a tax credit that works exactly like the old one, the government then has to have some way of determining whether you were entitled to the full $7500 credit. That's presumably why the dealer needs your taxpayer identification number (usually your SSN), which he will then pass along to the government when he asks for his $7500.
If these assumptions are correct, it's a little hard to imagine how it could work any other way. However, if this is how it works I'd think that there will be a lot of buyers who won't realize that if it turns out that they don't qualify for the full $7500 the government will come after them for the difference when they file their taxes for that year

 

[knoepler]

I think how it will work is the government gives dealers a certain amount of money up front, and they distribute the $7500 to each buyer. Then they report to the IRS the SSN and VIN. That way the buyer can’t claim the credit again and say they elected not to get it at point of sale. But I’m just guessing here. It’ll probably take until December 31 for the government to figure this out, and then another 3 months before the dealers understand what to do.

Yeah - see my response (#87) to MichBolt. Assuming we're right, I think that in addition to making sure that nobody double dips, the government has to have some way of determining whether you were eligible for the full $7500.

 

[knoepler]

In any case, I don’t think all the unknowns will be known by the time my Bolt arrives in September, so I’m probably just going to take delivery and be happy with a new car. I don’t think I want to risk losing my $1000 nonrefundable deposit just to see Chevy raise prices by $7500, so I end up down $1000. It’s highly unlikely, but still possible.

I don't know what kind of relationship you have with your dealer, but if it looks like this thing is going to become law I'd encourage you to have a candid conversation with him. "Nonrefundable" just means that if you back out the dealer could keep your $1000 - whether he actually does keep it might depend on all sorts of things, and God knows there are who knows how many moving parts here.

 

[mrcleop]

so... it sounds like in theory you could decline to take the $7500 when you buy the car and instead claim it when you file your 1040 for that year, which would seem to imply that the new tax credit works exactly like the old one, taking $7500 off your tax bill (or less if your tax liability is less than $7500.) In practice almost everyone will "elect" to take the $7500 when they buy the car, and the government will reimburse the dealer. However, if it really is a tax credit that works exactly like the old one, the government then has to have some way of determining whether you were entitled to the full $7500 credit. That's presumably why the dealer needs your taxpayer identification number (usually your SSN), which he will then pass along to the government when he asks for his $7500.
If these assumptions are correct, it's a little hard to imagine how it could work any other way. However, if this is how it works I'd think that there will be a lot of buyers who won't realize that if it turns out that they don't qualify for the full $7500 the government will come after them for the difference when they file their taxes for that year

I think it’s going to be a refundable tax credit instead of a nonrefundable one. So you can get the full credit even if your liability isn’t above $7500.

 

[Jff007]

So, considering how GM sent out checks after the price cut for MY23s, if this bill leads to a full $7500 reduction for everyone and Chevy doesn't increase the MSRP, what are the odds that more checks would be sent out for people buying the cars between now and the new credit/rebate?

That "if" is certainly shouldering a lot of weight.

 

[Frajit]

So, considering how GM sent out checks after the price cut for MY23s, if this bill leads to a full $7500 reduction for everyone and Chevy doesn't increase the MSRP, what are the odds that more checks would be sent out for people buying the cars between now and the new credit/rebate?

Absolutely zero. No way will GM reimburse anyone for missing out on a tax credit.

 

[Jff007]

Absolutely zero. No way will GM reimburse anyone for missing out on a tax credit.

That's generally what I'm thinking on it. But I'm also expecting them to increase MSRP, too, so I'm definitely on the more pessimistic side with this scenario.

I'm probably going to go ahead with my purchase, and with how rough my luck is, that means the car will be cheaper after the bill passes, haha.

 

[knoepler]

I think it’s going to be a refundable tax credit instead of a nonrefundable one. So you can get the full credit even if your liability isn’t above $7500.

OK... but if you get it regardless of whether your tax liability is at least $7500, wouldn't that fit the definition of a rebate, especially since you can ask for it right away?
If this thing happens and I'm in a position to take advantage of it I may decide against "electing" to take it when I buy the car. If that $7500 is buried somewhere in the sales contract it may be harder to figure out how much the dealer is actually charging me. If I say "No, thanks - I'll ask the feds for the money when I file my 1040" it should be easier to see how much I'm being charged.

 

[mrcleop]

OK... but if you get it regardless of whether your tax liability is at least $7500, wouldn't that fit the definition of a rebate, especially since you can ask for it right away?
If this thing happens and I'm in a position to take advantage of it I may decide against "electing" to take it when I buy the car. If that $7500 is buried somewhere in the sales contract it may be harder to figure out how much the dealer is actually charging me. If I say "No, thanks - I'll ask the feds for the money when I file my 1040" it should be easier to see how much I'm being charged.

Yeah I’m not a tax professional so I can’t really speak to the credit vs. rebate thing. But presumably it’ll be a line item on the contract like any other incentive, like the current $5900/$6300 cash back offer on 2022 MY Bolts.

MA is about to enact a point of sale EV rebate as well. There must be some states that already do?

 

[mrcleop]

Here’s the NJ program that’s point of sale.

 

[RacerX00]

Yeah I’m not a tax professional so I can’t really speak to the credit vs. rebate thing. But presumably it’ll be a line item on the contract like any other incentive, like the current $5900/$6300 cash back offer on 2022 MY Bolts.

MA is about to enact a point of sale EV rebate as well. There must be some states that already do?

Almost every state incentive works like this, my home state of NY included.

 

[MichBolt]

OK... but if you get it regardless of whether your tax liability is at least $7500, wouldn't that fit the definition of a rebate, especially since you can ask for it right away?
If this thing happens and I'm in a position to take advantage of it I may decide against "electing" to take it when I buy the car. If that $7500 is buried somewhere in the sales contract it may be harder to figure out how much the dealer is actually charging me. If I say "No, thanks - I'll ask the feds for the money when I file my 1040" it should be easier to see how much I'm being charged.

The law does require the dealership to state the credit amount, and also forbids making any other rebate (manufacturer, etc.) contingent on the customer electing to take the tax credit at the point of sale:

(B) prior to the election described in paragraph (1) and not later than at the time of such sale, disclosed to the taxpayer purchasing
such vehicle—
‘‘(i) the manufacturer’s suggested retail price,
‘‘(ii) the value of the credit allowed and any other incentive available for the purchase of such vehicle, and
‘‘(iii) the amount provided by the dealer to such taxpayer as a condition of the election described in paragraph (1),
‘‘(C) not later than at the time of such sale, made payment to such taxpayer (whether in cash or in the form of a partial payment or down payment for the purchase of such vehicle) in an amount equal to the credit otherwise allowable to such taxpayer, and
‘‘(D) with respect to any incentive otherwise available for the purchase of a vehicle for which a credit is allowed under this section, including any incentive in the form of a rebate or discount provided by the dealer or manufacturer, ensured that—
‘‘(i) the availability or use of such incentive shall not limit the ability of a taxpayer to make an election described in paragraph (1), and
‘‘(ii) such election shall not limit the value or use of such incentive.

 

[knoepler]

The law does require the dealership to state the credit amount, and also forbids making any other rebate (manufacturer, etc.) contingent on the customer electing to take the tax credit at the point of sale:

The specificity of the language which is designed to prevent a dealer from clawing back any or all of the reduction is impressive. That said, those sales contracts can be confusing for most ordinary buyers, myself very much included.
GM has confirmed that my order has been "accepted" but hasn't given me any additional information. I'm hoping that the timing works out in such a way that the fate of the bill will be known by the time I have to decide whether to actually put money on the table. If the bill does pass it'll be interesting to see what, if anything, GM and the dealers do to try to persuade people to buy before the bill goes into effect in January.

 

[Lance Boyle]

Will GM raise the price when the tax credit returns? That's a big reason (the lack thereof) that they dropped the price so substantially. If the 2024 Equinox EV starting price stays at $30K and it qualifies for a $7,500 credit, the waiting list will immediately stretch into the 2027 model year. Edit: I'll be on it!