Nissan Ariya Forum banner
1 - 20 of 94 Posts

· Registered User
Joined
·
334 Posts
Discussion Starter · #1 ·
Hello All -- the discussions on tax rules are scattered about in other threads, here is a very quick sum up of the tax rules -- the old, the new and the transition (or perhaps the good, the bad and the ugly complex).

The old -- the eligibility hurdle was the number of vehicles the manufacturer had sold in the USA. Simple and easy (the good).

The new -- the main eligibility hurdle is Made in USA. Once that hurdle is done, there are pricing limits -- 55k cars, 80k SUVs -- what qualifies as an SUV could deserve a thread of its own!. Well, rats (the bad).

The transition -- this is the "written binding contract" limbo that we find ourselves wandering. The DRAFT instructions for form 8936 indicate that those who entered into such a contract prior to August 16, 2022, can choose to treat their vehicle as having been placed into service on August 15, 2022, and they would then enter August 15, 2022 on line 3 of form 8936. Of course, to be able to complete the form you also need a VIN, and some might not even have cars yet when taxes come due (complete taxes without credit then file an amended return). Definitely the ugly complex!

I hope the quick summary is helpful -- I find myself going down rabbit holes thinking about what does or does not qualify as an SUV, and also debating in my head about what is "binding"... :LOL:
 

· Super Moderator
Joined
·
477 Posts
As promised, stickied. Let's try to keep the discussion here to known facts rather than speculation or back and forth about whether or not we're all crazy to even want to try. I'll be deleting posts of that nature liberally here. I'll be deleting obviously off topic content, but have decided to let most conversation focused on the tax situation go. I don't know what's really correct. There are lots of other threads with those discussions already.

The primary open questions are:
  1. Is Nissan's binding contract sufficient to qualify for the transition rule?
  2. Can those of us that have the Nissan binding contract, but who didn't take delivery until 2023, qualify for the transition rule? If so, how do we go about it?
If you need a copy of the binding agreement that Nissan had reservationists sign, there's one available in this post:

The official instructions (no longer marked "DRAFT": Instructions for Form 8936 (01/2023) | Internal Revenue Service), now specify that you can enter 8/15/2022 as the date placed in service if you had a binding agreement in place before then. I filed last week using this rule for my Ariya, and my return has been accepted and processed.
 

· Registered User
Joined
·
57 Posts
I spoke to my cousin's husband yesterday who is an accountant. This is anecdotal evidence, so I suggest you contact your own Tax professional, but here is the information he gave me.

For any Ariyas delivered in 2022, they will be eligible for the transition clause provided the written binding agreement provided by Nissan meets the criteria for a written binding agrrement in the state they live in. This can vary greatly from state to state, so there is no blanket rule for what is and what is not a written binding agreement.

For any Ariyas delivered in 2023, they are not eligible to be claimed on this year's taxes, but will probably be eligible for next year's taxes provided there are no further changes. The same written binding agreement determinations by state would continue to apply as well.

He cautioned additionally that claiming an Ariya that was delivered in 2023 on 2022 taxes may be viewed as fraud by the IRS as well since the amount is $7500 and can trigger the threshold for fraud. He said the penalties for fraud can be significant and would be over and above repaying the IRS the 7500 plus interest.

Again, this is one data point, please consult your own tax professional.
 

· Registered User
Joined
·
631 Posts
I spoke to my cousin's husband yesterday who is an accountant. This is anecdotal evidence, so I suggest you contact your own Tax professional, but here is the information he gave me.

For any Ariyas delivered in 2022, they will be eligible for the transition clause provided the written binding agreement provided by Nissan meets the criteria for a written binding agrrement in the state they live in. This can vary greatly from state to state, so there is no blanket rule for what is and what is not a written binding agreement.

For any Ariyas delivered in 2023, they are not eligible to be claimed on this year's taxes, but will probably be eligible for next year's taxes provided there are no further changes. The same written binding agreement determinations by state would continue to apply as well.

He cautioned additionally that claiming an Ariya that was delivered in 2023 on 2022 taxes may be viewed as fraud by the IRS as well since the amount is $7500 and can trigger the threshold for fraud. He said the penalties for fraud can be significant and would be over and above repaying the IRS the 7500 plus interest.

Again, this is one data point, please consult your own tax professional.
I spoke to my cousin's husband yesterday who is an accountant. This is anecdotal evidence, so I suggest you contact your own Tax professional, but here is the information he gave me.

For any Ariyas delivered in 2022, they will be eligible for the transition clause provided the written binding agreement provided by Nissan meets the criteria for a written binding agrrement in the state they live in. This can vary greatly from state to state, so there is no blanket rule for what is and what is not a written binding agreement.

For any Ariyas delivered in 2023, they are not eligible to be claimed on this year's taxes, but will probably be eligible for next year's taxes provided there are no further changes. The same written binding agreement determinations by state would continue to apply as well.

He cautioned additionally that claiming an Ariya that was delivered in 2023 on 2022 taxes may be viewed as fraud by the IRS as well since the amount is $7500 and can trigger the threshold for fraud. He said the penalties for fraud can be significant and would be over and above repaying the IRS the 7500 plus interest.

Again, this is one data point, please consult your own tax professional.
Thanks for following up with this. Seems like sound accounting advice by your cousins husband. To summarize, the safest bet for those taking delivery of Ariya in 2023 is to wait and apply for the EV tax credit in our 2023 returns. I don’t see any downside to that approach, and If/when the US Treasury Dept. elects to provide more concise guidance on the matter, there is plenty of time to amend our 2022 returns between now and the next three years. However, I do intend to discuss this approach with my accounting firm to see if they agree. Also unless new insight is revealed soon by the IRS, I might consider paying quarterly taxes as I normally would without the tax credit included in the equation, ultimately avoiding any risk for an interest penalty in my 2023 return.
 

· Registered User
Joined
·
334 Posts
Discussion Starter · #5 ·
I spoke to my cousin's husband yesterday who is an accountant. This is anecdotal evidence, so I suggest you contact your own Tax professional, but here is the information he gave me.

For any Ariyas delivered in 2022, they will be eligible for the transition clause provided the written binding agreement provided by Nissan meets the criteria for a written binding agrrement in the state they live in. This can vary greatly from state to state, so there is no blanket rule for what is and what is not a written binding agreement.

For any Ariyas delivered in 2023, they are not eligible to be claimed on this year's taxes, but will probably be eligible for next year's taxes provided there are no further changes. The same written binding agreement determinations by state would continue to apply as well.

He cautioned additionally that claiming an Ariya that was delivered in 2023 on 2022 taxes may be viewed as fraud by the IRS as well since the amount is $7500 and can trigger the threshold for fraud. He said the penalties for fraud can be significant and would be over and above repaying the IRS the 7500 plus interest.

Again, this is one data point, please consult your own tax professional.
Thank you. That is a very good point that the tax relief would correspond to the relevant tax year. To clarify the original post summarizing the current limited understanding of transition then -- for taking "actual" delivery in 2023, would not claim on current filing (2022's) taxes (and not by amending 2022 either), but rather on next year's filing for 2023, and fill out form 8936 as instructed in the draft (hope eventually final?) guidance.
 

· Registered User
Joined
·
139 Posts
I don’t believe this advice makes sense. If the IRA Bill says use an effective service date of 8/16/22, it has to be filed with 2022 taxes. It won’t even pass basic edit checks in any 2023 tax filing systems. If you enter any 2023 date, the new rules of 2023 are applicable. Lot of accountants and tax advisors are not quite up to speed on all the nuances as well. There is absolutely zero chance of claiming credit in 2023 taxes.
 

· Registered User
Joined
·
334 Posts
Discussion Starter · #7 ·
I don’t believe this advice makes sense. If the IRA Bill says use an effective service date of 8/16/22, it has to be filed with 2022 taxes. It won’t even pass basic edit checks in any 2023 tax filing systems. If you enter any 2023 date, the new rules of 2023 are applicable. Lot of accountants and tax advisors are not quite up to speed on all the nuances as well. There is absolutely zero chance of claiming credit in 2023 taxes.
Hmmm... now that I think about it some more, yes, you may be right... The credit is meant for a vehicle placed in service in the tax year under consideration (according to past, current and draft instructions for form 8936).

From page 3 of the draft instructions, specifically for Line 3 (the placed in service date):

"Enter 08/15/2022 if you qualify and elect to apply the transition rule discussed below.

Transition rule. If you purchased, or entered into a written binding contract to purchase, a qualified plug-in electric drive motor vehicle after 2021 and before August 16, 2022, you may elect to treat such vehicle as having been placed in service on August 15, 2022, the day before the enactment date of the Inflation Reduction Act of 2022. Any additional election guidance that is issued will be added to these instructions at a later date."
 

· Registered User
Joined
·
104 Posts
Guidance from IRS is pretty clear. However, I think biases are getting in the way. Below is cut and paste from IRS

“Purchase date vs. delivery date

If you entered a written binding contract to buy a vehicle before August 16, 2022, but took possession on or after August 16, 2022, and before January 1, 2023, you may claim the credit based on the prior rules and disregard the assembly requirement.

If you purchased a vehicle between August 16, 2022 and December 31, 2022 but don't take delivery of the vehicle until 2023, see Credit for New Clean Vehicles Purchased in 2023 and After.”



So if you took delivery in 2022 you can claim the credit if it was delivered in 2023 new rules apply and Nissan Ariya is not eligible.

 

· Registered User
Joined
·
139 Posts
I am not sure I understand nor I follow this need to get a signed form from Nissan. Email confirmation from Nissan acts as eConsent proof that one has signed the agreement. What else is needed? Does one get a confirmation from Amazon that you ordered something other than email, when you place an order?
 

· Registered User
Joined
·
15 Posts
Guidance from IRS is pretty clear. However, I think biases are getting in the way. Below is cut and paste from IRS

“Purchase date vs. delivery date

If you entered a written binding contract to buy a vehicle before August 16, 2022, but took possession on or after August 16, 2022, and before January 1, 2023, you may claim the credit based on the prior rules and disregard the assembly requirement.

If you purchased a vehicle between August 16, 2022 and December 31, 2022 but don't take delivery of the vehicle until 2023, see Credit for New Clean Vehicles Purchased in 2023 and After.”



So if you took delivery in 2022 you can claim the credit if it was delivered in 2023 new rules apply and Nissan Ariya is not eligible.

Help me understand this for my case: I signed the binding contract ot purchase the Nissan vehicle on August 14, 2022. I had previously put in the downpayment to order the vehicle. Then Nissan delivered the vehicle to me on January 2, 2023 and I took possession and paid for it on January 2, 2023. So, can I claim the $7500 tax benefit with the April 2023 filing of my 2022 tax return? Or do I claim the tax benefit in the April 2024 filing of the 2023 tax return?
 

· Registered User
Joined
·
104 Posts
Based on you taking delivery of the vehicle after 2022 you would not be eligible for the tax credit. That’s how I am reading the IRS guidance.

Of course don’t let me deter you trying to claim the EV tax credit. I use turbo tax to file my taxes, so if it were me I would run it through the program to see if it came back as eligible and pay extra for live support to get secondary check as well. That’s a good amount of money you could be missing out on by not doing your due diligence. However, based on the guidance above I would not be expecting to get the credit.

On another point, I am guessing Nissan knows the Ariya is not eligible either at this point because they have not given any guidance stating it was. Look at at Tesla and Ford they directly advertise on there cites for their EVs being eligible. I am no marketing expert, but I would think if the Ariya was eligible this would be something they would advertise to sell more vehicles.
 

· Registered User
Joined
·
631 Posts
Based on you taking delivery of the vehicle after 2022 you would not be eligible for the tax credit. That’s how I am reading the IRS guidance.

Of course don’t let me deter you trying to claim the EV tax credit. I use turbo tax to file my taxes, so if it were me I would run it through the program to see if it came back as eligible and pay extra for live support to get secondary check as well. That’s a good amount of money you could be missing out on by not doing your due diligence. However, based on the guidance above I would not be expecting to get the credit.

On another point, I am guessing Nissan knows the Ariya is not eligible either at this point because they have not given any guidance stating it was. Look at at Tesla and Ford they directly advertise on there cites for their EVs being eligible. I am no marketing expert, but I would think if the Ariya was eligible this would be something they would advertise to sell more vehicles.
Not following your logic regarding Nissan‘s current advertising campaign since the only buyers that may qualify for a tax credit now are reservation holders.
 

· Registered User
Joined
·
104 Posts
Not following your logic regarding Nissan‘s current advertising campaign since the only buyers that may qualify for a tax credit now are reservation holders.
Yes, you’re correct. Let me try to explain it another way. To my knowledge Nissan did not provide any UPDATED guidance or advertising on the vehicle being eligible for the the tax credit. From what I have seen with Ford and Tesla they made it pretty clear this year and last year on if their EVs are eligible. This was not the case with Nissan. At the end of the day, I did not buy an Ariya so I really have no “skin in the game” as they say. With that being said Nissan has been pretty silent on the whole issue. Nissan is a large company with plenty of tax accountants and lawyers. Seems to me they could consult these in house professionals on if those that pre-ordered the car and took delivery in 2023 that they would be eligible for the EV tax credit. My guess is they did and the answer was it would not be eligible. So they have been silent on the issue. From Nissans perspective I would not want to tell people that Ariya would not be eligible because they could negatively impact sales. You know jus kinda be silent on the whole thing like the GOP is doing with George Santos. Of course I would tell people for those that pre ordered if it was eligible because that could positively impact sales. So I think a lot is being said that’s not actually being said by Nissan just based on them being silent.
 

· Registered User
Joined
·
104 Posts
However, Nissan was able to figure out pretty quickly that leases on the Nissan Ariya are eligible for the 7,5000 EV Tax credit, to which they said we’re gonna keep it and not pass it on to the customer. Giving peeps free floor mats and a yeti mug, and a personal assistant after purchase is icing on the cake. If that doesn’t make you feel like a millionaire buying a Bentley then I don’t know what else would.
 

· Registered User
Joined
·
104 Posts
However, Nissan was able to figure out pretty quickly that leases on the Nissan Ariya are eligible for the 7,5000 EV Tax credit, to which they said we’re gonna keep it and not pass it on to the customer. Giving peeps free floor mats and a yeti mug, and a personal assistant after purchase is icing on the cake. If that doesn’t make you feel like a millionaire buying a Bentley then I don’t know what else would.
On another note my buddy just bought a used Prius for 6k. Like many people he could have bought new but opted for something cheap as a commuter car. I admired his frugality and discipline. Not easy when you see your neighbors getting Teslas and you have FOMO. I also saw some guy on Facebook posting about a new VW ID4 they bought. He mentioned dealer would not finance him but his bank did and was able to buy the car. Then I read like 40+ comments on how pretty the color was and Congrads. To which I am thinking maybe them not getting approved for financing from the dealer should be a sign to not buy the car, but that not gonna stop me from what I want. It just kills me to see people loosing logic when buying a car.
 

· Registered User
Joined
·
336 Posts
Yes, you’re correct. Let me try to explain it another way. To my knowledge Nissan did not provide any UPDATED guidance or advertising on the vehicle being eligible for the the tax credit. From what I have seen with Ford and Tesla they made it pretty clear this year and last year on if their EVs are eligible. This was not the case with Nissan. At the end of the day, I did not buy an Ariya so I really have no “skin in the game” as they say. With that being said Nissan has been pretty silent on the whole issue. Nissan is a large company with plenty of tax accountants and lawyers. Seems to me they could consult these in house professionals on if those that pre-ordered the car and took delivery in 2023 that they would be eligible for the EV tax credit. My guess is they did and the answer was it would not be eligible. So they have been silent on the issue. From Nissans perspective I would not want to tell people that Ariya would not be eligible because they could negatively impact sales. You know jus kinda be silent on the whole thing like the GOP is doing with George Santos. Of course I would tell people for those that pre ordered if it was eligible because that could positively impact sales. So I think a lot is being said that’s not actually being said by Nissan just based on them being silent.
The draft instruction from the IRS has not been finalized, so the IRS hasn't made a final decision about the procedure. They just changed the SUV classification for Ford, GM, and Tesla, etc..., but that part is completely separate from the transition rule.
 

· Registered User
XC40 Recharge
Joined
·
119 Posts
To put this another way, there has been no guidance from the IRS that suggests deliveries in 2023 can qualify for the transitional rule. So anyone thinking about buying an Ariya from here on out should assume there will not be any tax credit unless/until the IRS says otherwise.
 

· Registered User
Joined
·
147 Posts
Posting a link to the i8936 draft here for reference: https://www.irs.gov/pub/irs-dft/i8936--dft.pdf

As of 1/31/23, quoted below, the draft doesn't differentiate if the vehicle is delivered in 2022 or 2023 for transition rule.

Line 3
Enter 08/15/2022 if you qualify and elect to apply the transition rule discussed below.
Transition rule. If you purchased, or entered into a written binding contract to purchase, a qualified plug-in electric drive motor vehicle after 2021 and before August 16, 2022, you may elect to treat such vehicle as having been placed in service on August 15, 2022, the day before the enactment date of the Inflation Reduction Act of 2022.
 
1 - 20 of 94 Posts
Top