The 2022 Inflation Reduction Act¹ has revamped the Electric Vehicle (EV) tax credit, expanding its scope until 2032. This new development promises financial advantages for eligible EV purchasers but might bring difficulties in understanding the new income requirements and car guidelines.
From 2023², new EV buyers may be awarded up to a $7,500 tax credit, while those buying used EVs might enjoy up to $4,000 in tax deductions. These non-refundable credits can be claimed while filing tax returns in 2024. Being non-refundable, the credit can notably decrease your tax amount but doesn’t result in a tax refund.
Noteworthy changes³ will unfold from January 2024. Future EV owners can utilize the upcoming cash incentive, valued up to $7,500 for new or $4,000 for used, instantly at the point of purchase, regardless of their final tax bill.
There are three qualifying requirements to obtain the EV tax credit⁷:
- Buyer Income Limits
- EV Price Cap
- EV assembly and battery sourced location
Buyer Income Limits
The income limits for the purchase of new vehicles for individuals, heads of households…
