Home News Good luck in qualifying for new tax credit on electric cars

Good luck in qualifying for new tax credit on electric cars

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The Inflation Reduction Act (IRA), which appropriated $369 Billion to reduce U.S. carbon emission by 40 percent by 2030, includes tax credits for electric vehicle (EV) purchases.

Good luck with that.

An American taxpayer could get a non-refundable tax credit of up $7,500 if they purchase an electric car in 2010. Only 200,000 credits can be claimed per automaker. General Motors and Tesla have all exceeded the limit.

The IRA eliminates the manufacturer cap. It also offers a credit of up $4,000 towards a used EV. This could be a great option for anyone who is unable or unwilling to purchase a brand new vehicle. However, the law established some prerequisites that vehicles must meet in order to be eligible.

Vehicles have been subject to a “final-assemble” requirement since August. This means that the vehicle’s last assembly must have taken place in North America. This single restriction is complex, as you will see in the Department of Energy’s list of eligible cars. To determine eligibility, the agency suggests that customers search cars using their Vehicle Identification Number (VIN). These requirements are applicable to 2023.

Individuals who earn over $200,000 per year will be eligible to start January 1.



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