Signed Rivian's Binding Buyer's Agreement? You May Get the Full, Unrestricted $7,500

Last summer, R1T or R1S pre-order holders were worried about potentially losing access to the $7,500 EV tax credit that had just one restriction: it applied only to the first 200,000 pure EVs sold by any manufacturer. But the Irvine-based manufacturer moved quickly and gave customers the chance to sign a binding order agreement to purchase one or more qualifying Rivian vehicles.

However, the brand did not guarantee anyone eligibility for federal EV tax credits because everything was a little bit fuzzy at the time. Moreover, signing the binding order agreement did not secure a certain spec or lock in a price. The non-refundable $100 was a way of allowing future owners to claim the $7,500 irrespective of the many qualifying or eligibility rules.

In an unexpected turn of events, Rivian did not leave customers to deal with this issue by themselves. It confirmed through email and on its online support platform that any pre-order holder with a “valid” binding order agreement signed on or before August 15, 2022, can claim the EV tax credit for their all-electric pickup truck or SUV without worrying about the new rules. Admittedly, these are a little bit more complicated and restrictive.

The EV tax credit (officially known as the clean vehicle credit) applies to plug-in hybrids and hydrogen-powered vehicles, too, are split into two halves and is conditioned on customer income, raw materials sourcing, battery manufacturing, and MSRP.

Moreover, at the time of writing, the Treasury has not released the guidance for the sourcing of EV batteries which may cause some vehicles to lose access to the entire credit of $7,500. We will know everything about the new and complete version of the applicable EV tax credit after the Treasury releases its guidance and the list of eligible vehicles is updated by the IRS.

For now, if you signed a binding contract with Rivian to buy an R1T or R1S before the IRA became law (August 16th, 2022), and:

• took delivery in 2022 or 2023, you can apply for the original EV tax credit (Internal Revenue Code, section 30D);
• have not taken delivery yet, you will be able to apply for the original EV tax credit (Internal Revenue Code, section 30D) by amending your 2022 tax return (if enough tax liability exists).

According to Rivian and the IRS, eligible customers must use Form 8936, which is available for download at the end of the article. To make sure you’re inputting the right data, make sure to access the Instructions.

Also, per the IRS, "depending on the date the vehicle is delivered, you can claim the credit on your original, superseding, or amended 2022 tax return."

But there’s still a thing customers must account for. Rivian ultimately said that customer eligibility is determined by the Internal Revenue Service (IRS) and recommended professional advice for everyone’s specific situation. This can become a problem because the IRS considers “a significant non-refundable deposit or down payment” as an indication of a binding contract. This can put the entire binding agreement into a grey area because the IRS may consider $100 to not be “a significant non-refundable deposit or down payment.”

Moreover, we will not know exactly what is going on with the EV tax credit's applicability until the Service comes with a proper explanation or someone gets audited and confirms that the binding agreement worked as intended.

Finally, Rivian’s idea to give its customers more specific information is a great initiative, but you should move forward with accessing the original EV tax credit only after getting expert advice from an authorized and trustworthy party that deals with it regularly.