Remember the poster that wanted more definition in the ami, saying, “Does Uncle Sam want you?” Well, it looks like Uncle Sam wants you, again, only now, he wants you to buy a electric car. Okay, you might say. But you will have a new ride, and the $7,500 electric vehicle tax credit An EV sure sounds like a dream car, right? The only thing, knowing Uncle Sam and the IRS, you should know this, getting the $7,500 EV tax credit is not easy, after all.
You can thank President Joe Biden and the climate bill he signed last year, because the tax credit for purchasing EVs underwent a major change starting January 1, 2023. To be more As things get more complicated, the internal rules may change. It’s March, which means a $7,500 Uncle Sam toss-up car is likely to be available in the next few months.
One of the main reasons for all these changes must be Asia, which is quickly emerging as a hot spot for EVs. America wants you to buy EVs, but you are not looking to go to China or Korea for them. Of course, state and local governments may offer additional incentives, but that’s what you should be looking for!
Which Electric Vehicles Eligible for the $7,500 Federal Tax Credit?
If you thought that buying any EV would get you a $7,500 federal tax credit, think again. A Tesla you can get the EV tax credit, but the Lucid Air definitely doesn’t.
According to the rules stated on the official website of the IRS, eligible vehicles must have a battery capacity of at least 7 kilowatt-hours, and the total weight must be then under 14,000 pounds.
A website permission to read anything Only a vehicle made by a “manufacturer” qualifies., and it also shows the list. However, just because the manufacturer is on the list, it does not mean that the car will be eligible for the electric car tax credit.
There is also a price limit rule, but if you want to buy a car or an EV, the price cannot exceed $55,000. This removes almost all expensive EVs from the view of the $7,500 electric vehicle tax. If you want to buy an EV van, SUV, or pickup truck, the ceiling is $80,000. Read below for more views as well.
The Income Impact on a $7,500 Electric Vehicle
First, the answer is yes, of course there’s only so much tax credit you can get in overflow pockets. To qualify, your adjusted gross income cannot exceed $300,000 if you file as a married couple, $225,000 for heads of household, and $150,000 for other filers.
The good thing is that you can use your adjusted AGI for the year you bought the car, or the year before, whichever is lower. the $7,500 EV tax.
Note that the electric vehicle must be used for personal use in the US and not for resale. That’s a $7,500 non-refundable electric vehicle tax, so you can’t get more out of it.
What Other Secret Rules Do I Need to Get the EV Tax Credit?
Not everything is as cut and dry as EV pricing and production capabilities. There are many other rules and restrictions.
Fuel tank, for example, does not require a manufacturer’s mark. But even an EV from a qualified manufacturer will qualify for the $7,500 electric vehicle tax when purchased new. In addition, the buyer needs to report the same to the IRS, along with your taxpayer information for you to receive that federal benefit.
Another major obstacle to getting a federal tax on your EV is its place of assembly. Only vehicles with final assembly in the U.S. are eligible for the $7,500 electric vehicle tax credit, so the Kia and Hyundai EVs count. And let’s not talk about the Chinese EVs, period! Remember to check your car’s VIN to make sure it came to the US
The rules that divide the type of car are also very stupid. For example, the Volkswagen ID.4 is a car but if you get the AWD model, the IRS says it is an SUV. Of the Tesla Model Y remains a car even with AWD but if you add another row, it’s an SUV again. The rules and regulations are constantly changing, so be sure to go into your car purchase with an eagle eye if you want the $7,500 electric vehicle tax credit.