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jimsmith94

2023 PHEV Tax Credit?

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Sorry for cross posting my questions from the Ford Escape forum, but there doesn't seem to be any concrete information on any of this. Has anyone found anything that confirms or denies the $7,500 tax credit for the 2023 PHEV? If the tax credit does get cut in half because the batteries aren't built in North America, does anyone have any thoughts about if getting a signed buy order before December 31 would guarantee the full $7,500 tax credit, like it did before the IRA bill went into effect.

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Check out https://www.youtube.com/watch?v=HYJ96Y2-K6g At 5:13 he says that binding contracts from before January 1, 2023 will qualify for the old requirements. It shouldn't be the requirement from before August 16 so do you think it's the requirement from then to the end of 2022? I think that part only requires final assembly to be done in North America.

Edited by jimsmith94

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Just an FYI, the tax credit for the Escape PHEV was never $7500, the HV battery is too small. The credit under the old law was $6843. To your point on the 2023, I don't think Ford have published anything thus car stating how much, if any, credit the Escape PHEV will be eligible for under the new law.

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13 hours ago, Harley Lover said:

Just an FYI, the tax credit for the Escape PHEV was never $7500, the HV battery is too small. The credit under the old law was $6843. To your point on the 2023, I don't think Ford have published anything thus car stating how much, if any, credit the Escape PHEV will be eligible for under the new law.

Yes, I'm aware of the $6,843 credit before August 16. Everything else that I have read about orders between August 16 and December 31 say that they must be ordered and received before January 1 to receive the full tax credit of $7,500. If received after December 31 the credit would be based on where the final assembly was done and where the battery components were sourced.

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That's right, as of 2023 there is no battery size requirement affecting the credit amount. It's less clear whether the PHEVs sold between August and December of 2022 will receive the $7,500 credit or the $6,843.  The bigger question from the OP here is whether the critical minerals in the Escape battery are processed/extracted in the US or in a country with a US free trad agreement ($3,750 credit), and whether the battery is manufactured or assembled in North America ($3,750 credit).  I would happily take the $6,843 credit this year rather than unknown value next year, but that will come down to whether Ford actually produces and delivers my order in 2022.

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This is what I read :

To qualify from January 2023 onwards:

  • A PHEV sedan must have an MSRP of $55,000 or less
  • A PHEV truck or SUV must have an MSRP of $80,000 or less
  • 40% or more of production materials must be sourced from North America or a free-trade partner
  • Purchasers who are single must have an income of no more than $150,000 a year

 

I was thinking that includes the battery.

 

Edited by PHEV
misspelled.

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The IRS is in the public input phase of implementing the new law. Here’s a link to the page that has a link to the 22-2046 Notice.

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

But within that notice there is the following wording that indicates that the battery requirement implementation date may be changed depending on findings. Or that’s how I read it

Page 2 of 2022-46

 

Section 13401(a) of the IRA amends § 30D(b) of the Code to provide a maximum credit of $7,500 per vehicle, consisting of $3,750 in the case of a vehicle that meets certain critical minerals requirements and $3,750 in the case of a vehicle that meets certain battery components requirements. The amendments made by § 13401(a) of the IRA are applicable to vehicles placed in service after the date on which the Secretary of the Treasury or her delegate (Secretary) issues proposed guidance described in new

§ 30D(e)(3)(B) of the Code (proposed battery guidance date) relating to new critical minerals requirements described in new § 30D(e)(1)(A) and new battery components requirements described in new § 30D(e)(2)(A). See § 13401(k)(3) of the IRA.”

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I just was able to leave a “public” comment on the IRS website regarding the fate of those of us who may not be able to take delivery of our PHEV’s before 01/01/23. Due to the timing of the the law being signed and Ford’s order banks for  a 2022 closing before the law being signed and then not  opening for  a 2023 until after it being signed. Here is a link to leave a comment 

https://www.regulations.gov/commenton/IRS-2022-0020-0001

Maybe if enough people comment on our situation the IRS may make a provision for such situations. BUT there’s a catch, comments can only be submitted through tomorrow. Who knows, it’s worth a try

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