Nov 9, 2022
A new tax credit was unveiled in August 2022 by the Internal Revenue Service (IRS) for electric vehicles (EV). Drivers who buy EVs or plug-in hybrids after December 31st, 2009, can receive a credit of $2,500 – $7,500. For this credit, qualified EVs are defined as “Plug-in Electric Drive Motor Vehicles” such as passenger vehicles and light trucks. Below is a summary of these amounts.
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5 KWh capacity battery
Minimum of 5 kilowatt hour capacity battery
Over 5 KWh capacity battery
Additional credit added for every kilowatt over 5 hour capacity
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The Inflation Reduction Act, which further defines which vehicles can qualify for the credit, was also passed in August 2022. New provisions in the act will benefit both consumers and manufacturers of electric vehicles in North America. In the past, manufacturers were limited to selling 200,000 EVs that could qualify for the tax credit to consumers. As a result of the new act, this limitation has been removed, and consumers can now take advantage of a number of new regulations, such as those below.
More Qualifications For EV Tax Credit
Must be assembled in North America
Buyers for new EVs must meet income requirements
Buyers for used EVs must meet income requirements
Used EV purchased from dealerships eligible for the lower amount of either $4,000 or 30% of sale price as tax credit
Changes Scheduled to Begin in 2024
Additional credits for EVs will vary from state to state. Visit your state’s government website to determine if there are more opportunities available! For more information about which specific vehicles qualify for the IRS EV Tax Credit, click here.