Congress passed the Inflation Reduction Act and President Joe Biden signed it into law in 2022 including a change in the federal tax rate for Americans who buy an electric car. The new rules for the $7,500 IRS credit apply to new vehicles purchased after 1 January 2023 but if you bought a car in the last year, your EV may qualify for the first rule.
One major change in the Internal Revenue Code Section 30D, where the debt falls, the electric vehicle must have its final assembly in North America, also applies to vehicles purchased in the previous year after August 16th. There are a few other requirements in order to qualify for the loan. We will guide you on what they are and how to apply for the loan.
Who qualifies for the $7,500 credit?
Not everyone may be eligible for admission to the adjusted gross income is set at $150,000 for single filers and $300,000 for married filers filing jointly. The limit for heads of households is $225,000. You can use your income from the year you bought the new car or the previous year, whichever is lower. Above those levels you are not eligible for the tax credit, but more than 70 percent of Americans earn less than $150,000. You can claim the credit through Form 8936 and your tax return. It should be noted that you must provide the Vehicle Identification Number (VIN) of your vehicle.
Not all vehicles are eligible for the credit or have a maximum suggested retail price (MSRP). up to $80,000 for vans, cars and pickup trucks, and $55,000 for other vehicles. The MSRP is the suggested retail price set by the manufacturer including options, accessories and trim and does not include fees. However, that is not the price you pay.
In addition to the final assembly in North America there are others that the car must fulfill in order to qualify for the full credit of $7,500.
Need a car to qualify for a $7,500 loan?
The Department of Finance and the IRS will provide guidance on the car tax ring in the future to change the way the debt is calculated. Once it is given, it will be there two parts to the debtprecious minerals and parts of stones. Each claim will qualify for a $3,750 tax credit. Both matching vehicles are eligible for a total tax credit of $7,500.
For now though the first rate will be used to calculate the tax credit that does not exceed $7,500. The principal amount is $2,500 and the vehicle must draw power from a battery of at least 7kWh capacity, which adds $417 to the credit. Each additional kWh above 5kWh adds an additional $417 to the credit until the cap. Here are some of the requirements.
What cars qualify for the $7,500 tax credit?
Car buyers can check if the car they are looking at on the car page meets the final requirement for the assembly for $7,500 in tax credit by using the Vehicle Identification Number (VIN) Decoder on the Department of Energy website.
The IRS provides a list of qualified producers some of which are specifically designed and qualified. Including Audi, BMW, Cadillac, Chevrolet, Chrysler, Ford, Jeep, Lincoln, Mercedes, Nissan, Rivian, Tesla, Volvo and Volkswagen.