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Discussion Starter · #1 ·
Once signed into law, I suspect many here will be excluded based on the income requirement. Even if this has no effect on Mercedes-Benz's actual manufacturing timing for 2023 (see #2 below), I would hope they monitor progress and anticipated date of bill signing to advance public exposure, display, and order entry sooner.

https://www.reddit.com/r/electricvehicles/comments/wa8viu
 

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As I understand it, if you execute a binding sales agreement before Biden signs the bill, and you take delivery in 2023 you are covered by the current rules and would get the $7500 credit on your 2023 tax return. What's not clear to me is which rules apply if you execute a sales agreement after Biden signs the bill, but before 1-Jan 2023, and you take delivery in 2022.
 

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Discussion Starter · #3 ·
If anyone from MBUSA is reading or if anyone knows a contact, some news from another OEM launching a new EV at the end of this year. Fisker just allowed refundable deposit customers to convert to firm orders starting today in response to the bill. Their production doesn't start until late November with most deliveries in 2023 or later, similar to EQE SUV production timing. If MBUSA would release their order guide, price, and show the vehicle before the House returns in September and acts and the President signs into law, many of us who would lose the $7500 current incentive can still qualify under the "transition" provision by placing a firm order before that enactment.
Font Darkness Screenshot Terrestrial plant Event
 

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.......If MBUSA would release their order guide, price, and show the vehicle before the House returns in September and acts and the President signs into law, many of us who would lose the $7500 current incentive can still qualify under the "transition" provision by placing a firm order before that enactment.
I think you are being optimistic about the House waiting until September to vote on the IRA. From what I am reading they are likely to vote as soon as Friday, 12-Aug-2022. I placed an order last week for the EQE 500 SUV at MSRP with a $500 non-refundable deposit. I am hoping this qualifies as a "written binding contract to purchase". I think there is a chance that the entry level RWD EQE 350 SUV, with little or no options, will be under $80K and qualify for the credit under the proposed law since it is made in the USA. But, I think the standard dash with the iPad style cockpit screen would be a disappointment.
 

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Discussion Starter · #5 · (Edited)
I think you are being optimistic about the House waiting until September to vote on the IRA. From what I am reading they are likely to vote as soon as Friday, 12-Aug-2022. I placed an order last week for the EQE 500 SUV at MSRP with a $500 non-refundable deposit. I am hoping this qualifies as a "written binding contract to purchase". I think there is a chance that the entry level RWD EQE 350 SUV, with little or no options, will be under $80K and qualify for the credit under the proposed law since it is made in the USA. But, I think the standard dash with the iPad style cockpit screen would be a disappointment.
Possibly, but Ballotpedia shows the House doesn't return until September 6th. Your timing may reflect the Senate?

EDIT: Despite this link, I now also see newer reports about the House returning for August 12th. My apologies.


My understanding is that the base price MSRP controls for the new bill, and that adding options is not the measure. Perhaps I am wrong about that, but it was shared on another forum. My goal happens to be a EQE SUV 350 (+?) with maximum range and rear wheel drive. Reviews about Hyperscreen have gone both ways in discussions about the sedans. I've seen the photos and think the standard instrument panel is fine. However, I intend to try to qualify under current rules, so the price will not be an issue. I am concerned that the sourcing of battery materials may disqualify the EQE SUV, despite US assembly.
 

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.......My understanding is that the base price MSRP controls for the new bill, and that adding options is not the measure. Perhaps I am wrong about that, but it was shared on another forum. My goal happens to be a EQE SUV 350 (+?) with maximum range and rear wheel drive. Reviews about Hyperscreen have gone both ways in discussions about the sedans. I've seen the photos and think the standard instrument panel is fine. However, I intend to try to qualify under current rules, so the price will not be an issue. I am concerned that the sourcing of battery materials may disqualify the EQE SUV, despite US assembly.
Based upon the way the Fisker notice reads, "...and confirm their trim level." I think the MSRP will be considered different for the 350 RWD, 350 AWD, and 500 AWD. You probably won't be able to use the 350 RWD MSRP and claim the second motor is an option. The batteries for the EQE being manufactured in Alabama will probably mean there is a good chance that they will meet the USA minimum content requirement. But, like you, I think it is better to try to qualify under the old rules so you don't have to prove the USA content percentage.
 

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Discussion Starter · #7 ·
Based upon the way the Fisker notice reads, "...and confirm their trim level." I think the MSRP will be considered different for the 350 RWD, 350 AWD, and 500 AWD. You probably won't be able to use the 350 RWD MSRP and claim the second motor is an option. The batteries for the EQE being manufactured in Alabama will probably mean there is a good chance that they will meet the USA minimum content requirement. But, like you, I think it is better to try to qualify under the old rules so you don't have to prove the USA content percentage.
I believe you are absolutely correct. Engines are not options, but the basis of different models, each with a base MSRP. But, if a trim package, option, or seating choice raised the price over the $80k limit for those buying after the law is enacted, those items should not disqualify them just on that basis. I plan to follow your example and place a properly written order for a EQE350 rear wheel drive sometime this coming week that should qualify as "firm" for 2022 tax purposes. I'm going to try to use the sedan price guide to attempt to create the complete "build" and see if the dealer accepts that for now.
 

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...for 2022 tax purposes. I'm going to try to use the sedan price guide to attempt to create the complete "build" and see if the dealer accepts that for now.
Actually, I think you will be getting the tax credit in 2023 when the EQE SUV is most likely to be delivered. Ironically, I think the new army of IRS agents will be auditing any returns claiming to have a "written binding contract to purchase", an otherwise non-qualifying EV, in place before Biden signed the IRA bill.
 

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Discussion Starter · #9 · (Edited)
Actually, I think you will be getting the tax credit in 2023 when the EQE SUV is most likely to be delivered. Ironically, I think the new army of IRS agents will be auditing any returns claiming to have a "written binding contract to purchase", an otherwise non-qualifying EV, in place before Biden signed the IRA bill.

Thanks for that clarification on tax year, still worth obtaining! I will support the reality that I am intending to submit a firm order, just in advance of MB's reveal/release of final information. If I can assume at all that the product plan for the EQE SUV will mimic the EQE sedan (not unreasonable but not confirmed of course), I will ask the dealer to list my specific build on the order along with a $500 check that is non-refundable, as you did. Once the EQE SUV ordering guide is published, we can modify accordingly if needed.


2023 EQE SUV 350V (Body model code TBD)
970 - Starling Blue
R39 - 19” Five-Twin Spoke Wheels
119 - Neva Gray/Biscaya Blue MB Tex
H67- Anthracite 3D Relief Optic Trim
DY1- Exclusive Trim
B35- 110V Household Charging Cable
PAF- Acoustic Comfort Package (requires 596 Insulating Glass)
399- Front Multi-contour Seats
444- Heads-up Display
401- Ventilated Seats
 

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I sent this message to the House Representative from my district in PA today.

"I am not writing to discuss the merits or shortcomings of the Inflation Reduction Act of 2022. I am not writing to persuade you to vote for or against the bill. I am writing to ask you to request clarification of the transition period rules for the qualifying EV tax credit before the House Votes on the bill.

It is clear that a vehicle which is both ordered and delivered in 2023 is covered by the new rules. It is also clear that a transaction with a “written binding contract to purchase” dated prior to Biden signing the bill is covered by the old rules even if the vehicle is delivered in 2023.

What is not clear is what is the status of a vehicle ordered after the enactment date and delivered by the end of 2022. It appears that any EV delivered in the last 4+ months of the year does not qualify under either the old or new rules. It would also be helpful to know the exact definition of a 'written binding contract to purchase' prior to the enactment of the IRA."

Hopefully she will see this request an act on it before the House votes on the IRA.
 

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.....Hopefully she will see this request and act on it before the House votes on the IRA.
Much to my surprise, I received a phone call from my Congresswoman's office and I was told that purchases made after the enactment date for delivery by the end of 2022 would qualify provided that the vehicle is assembled in North America. This is clearly not what the text of the IRA says. I discussed the actual text of the IRA with the aide and he agreed to do further research on the subject. I asked if he could provide a reference to the text that explains what rules apply for cars purchased after the enactment date but before the effective date.
 

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I also asked if he could provide an operational definition of a "written binding contract to purchase" and he said I would have to ask an attorney for guidance on that question.
 

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Discussion Starter · #13 ·
Much to my surprise, I received a phone call from my Congresswoman's office and I was told that purchases made after the enactment date for delivery by the end of 2022 would qualify provided that the vehicle is assembled in North America. This is clearly not what the text of the IRA says. I discussed the actual text of the IRA with the aide and he agreed to do further research on the subject. I asked if he could provide a reference to the text that explains what rules apply for cars purchased after the enactment date but before the effective date.
I agree that the situation you describe does not appear to be addressed by the language in the bill. However, for what vehicle do you consider this applicable? EQE sedan is assembled overseas and EQE SUV will not start deliveries before January.
 

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Discussion Starter · #14 ·
I also asked if he could provide an operational definition of a "written binding contract to purchase" and he said I would have to ask an attorney for guidance on that question.
I completed a purchase order contract with my MB dealer on Monday for a 2023 EQE350, agreeing to content (based on known sedan order guide; SUV guide not yet released) and stating “at MSRP”. That creates a specific price even though the numerical value is not yet known. I gave a deposit via check with “firm order for 2023 EQE350” notated and have a receipt. The order has written upon it by the dealer “firm order for 2023 EQE350”. Given that the OEM always reserves the right to change content and options anyway, I think this set of documents should pass muster as completed before Biden’s signature enacts the new law. My eventual acceptance of the vehicle on arrival (likely next Spring?) also supports that it was a “firm order” for this one same-named vehicle that had been submitted.
 

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I agree that the situation you describe does not appear to be addressed by the language in the bill. However, for what vehicle do you consider this applicable? EQE sedan is assembled overseas and EQE SUV will not start deliveries before January.
I believe a "written binding contract for purchase" of an EQE sedan or an EQE SUV executed prior to the signing of the bill will qualify for the $7500 credit. Between the signing date and 1/1/2023 I don't think any EV will qualify unless the text of the bill is amended or the IRS reads between the lines with their regulations written after the bill is passed.

Then for new transactions after 12/31/2022, only vehicles meeting the new rules will qualify, which will pretty much eliminate anything but the entry level RWD EQE SUV.
 

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Discussion Starter · #16 ·
I believe a "written binding contract for purchase" of an EQE sedan or an EQE SUV executed prior to the signing of the bill will qualify for the $7500 credit. Between the signing date and 1/1/2023 I don't think any EV will qualify unless the text of the bill is amended or the IRS reads between the lines with their regulations written after the bill is passed.

Then for new transactions after 12/31/2022, only vehicles meeting the new rules will qualify, which will pretty much eliminate anything but the entry level RWD EQE SUV.
Yes, likely, once we see the actual MSRP, but even if below $80k for the SUV, one could fail based on household income as well.
 

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Yes, likely, once we see the actual MSRP, but even if below $80k for the SUV, one could fail based on household income as well.
The AGI threshold would not be for the 2022 tax year, it would be for the 2023 tax year. So there is still plenty of time to influence the AGI by deferring income producing transactions or accelerating expenses.
 

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Discussion Starter · #18 ·
The AGI threshold would not be for the 2022 tax year, it would be for the 2023 tax year. So there is still plenty of time to influence the AGI by deferring income producing transactions or accelerating expenses.
Here’s where we get a bit into the weeds. If the binding order is placed in 2022 before IRA bill enactment into law, but the SUV shows up in 2023 and final payment is made at delivery, does one get the credit for 2022 tax year when the order was placed, or in 2023 when the payment is made, consummating the binding contract? The bill allows the actual delivery in 2023 under this scenario and treating the sale as if under the prior law but the timing of the credit is not clear to me.
 

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Here’s where we get a bit into the weeds. If the binding order is placed in 2022 before IRA bill enactment into law, but the SUV shows up in 2023 and final payment is made at delivery, does one get the credit for 2022 tax year when the order was placed, or in 2023 when the payment is made, consummating the binding contract? The bill allows the actual delivery in 2023 under this scenario and treating the sale as if under the prior law but the timing of the credit is not clear to me.
That is a really good question, especially since the IRA text indicates that the tax payer can treat the transaction as if it took place the day before the bill was enacted. I would think this would be handled by a revised version of the Form 8910, Alternative Motor Vehicle Credit.

I am surprised no one else on this forum has joined this conversation about the impact of IRA of 2022 on the EV tax credit.
 

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Discussion Starter · #20 ·
That is a really good question, especially since the IRA text indicates that the tax payer can treat the transaction as if it took place the day before the bill was enacted. I would think this would be handled by a revised version of the Form 8910, Alternative Motor Vehicle Credit.

I am surprised no one else on this forum has joined this conversation about the impact of IRA of 2022 on the EV tax credit.
Perhaps we are addressing all their issues and they are just relaxing and reading!
 
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