The federal electric vehicle (EV) tax credit is a program designed to incentivize consumers to purchase Electric vehicles by offering them a tax credit. The way it works is fairly simple – when you purchase an EV, you can claim a credit on your federal taxes for a certain amount based on the size of the vehicle’s battery.
The amount of the credit varies based on the vehicle’s battery capacity, with a maximum credit of $7,500 for vehicles with a battery capacity of 16 kWh or more. To qualify for the credit, the vehicle must be new and purchased for personal use, not for resale or lease. Additionally, the vehicle must be fully electric or a plug-in hybrid with a battery capacity of at least 4 kWh.
Not everyone will qualify for the credit, as there are income limits in place. For example, for single filers, the credit begins to phase out once their income exceeds $75,000.
Overall, the EV tax credit is a great way to save money on the purchase of an electric vehicle while also helping to reduce greenhouse gas emissions and reliance on fossil fuels. If you’re in the market for an EV, be sure to check if you qualify for this credit before making your purchase.
Watch the video: EV Tax Credit: What It Is, How It Works, and Do You Qualify? | The Federal EV Tax Credit Explained
You may have heard that the rules surrounding the federal tax credit for buying an EV have changed now that the Inflation Reduction Act is law. Lauren McCay of Edmunds explains everything you need to know about the new requirements, including the price limits on eligible vehicles, personal income thresholds for buyers, the new importance of where the vehicle was assembled, and the timing of your purchase as 2022 comes to an end. How do you know what vehicles qualify? And what about using the credit toward the purchase of a used EV? Lauren breaks it all down so you can do your best to take advantage of the federal tax credit of up to $7,500.
How to Take Advantage of the New Federal EV Tax Credits:
00:00 Intro
00:55 What Changed?
01:29 Requirements
02:21 American Made
03:18 New EVs
03:57 Used EVs
04:53 Timing
05:37 Supply Limits
06:12 Do You Qualify?
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