Since President Joe Biden took office, the White House has introduced two bills to expand EV adoption, one of which included funding for heavily expanded EV charging infrastructure.Īt the time, there were rumors that the federal tax credit would be increased to $10,000 and was quickly mentioned as a reform. A quick history lesson on the expansion of EV tax credits It’s important to note that any unused portion of the $7,500 is not available as a refund, nor as a credit for next year’s taxes. If you owed $10,000 in federal income tax, then you would qualify for the full $7,500 credit. At first glance, this credit may sound like a simple flat rate, but that is unfortunately not the case.įor example, if you purchased a Ford F-150 Lightning and owed say, $3,500 in income tax this year, then that is the federal tax credit you would receive. How much is the federal tax credit?įirst and foremost, it’s important to understand three little words the government slips in front of the $7,500 credit – “may” and “up to.” As in, you may qualify for up to $7,500 in federal tax credit for your electric vehicle. More on that below.įirst, let’s take a second to truly understand how the Federal EV tax credit currently works. In reality, the amount you qualify for is based on both your income tax as well as several specifications of the electric vehicle you purchase, including where it’s built. With that said, you cannot simply go out and buy an electric vehicle and expect Uncle Sam to cut $7,500 off your taxes in April. The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles purchased from 2023 to 2032. The idea in theory is quite simple, per the IRS – “You may qualify for a credit up to $7,500 under Internal Revenue Code Section 30D if you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV). How does a federal tax credit work for my EV?
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |