The federal tax credits for electric vehicles have undergone significant updates to encourage the adoption of EVs further. These changes are part of the efforts to make clean energy vehicles more accessible and affordable to a broader range of consumers. Here are the key points to consider:
New and Used EV Tax Credits
- New EVs: Buyers of new electric vehicles (including Plug-in Hybrid EVs) can qualify for a tax credit of up to $7,500. The exact amount depends on the vehicle’s battery size and where its components were manufactured or assembled.
- Used EVs: A revamped tax credit for used electric vehicles offers a credit equal to 30% of the sale price, up to $4,000, under specific conditions.
Eligibility Criteria
- Price Caps: There are MSRP limits to qualify for the tax credit: $80,000 for vans, SUVs, and pickup trucks; $55,000 for other vehicles. Used vehicles must have a sale price of $25,000 or less
Income Limits: For new EVs, income caps are set at $150,000 for single filers, $225,000 for heads of households, and $300,000 for joint filers. For used EVs, the limits are $75,000 for single filers, $112,500 for heads of households, and $150,000 for joint filers.Final Assembly Requirements: Vehicles must have had their final assembly in North America to be eligible for the credit
How to Claim the Tax Credit
To claim the EV tax credit, taxpayers need to file Form 8936 with their federal income tax returns. For the first time, starting in 2024, the credit can be transferred to the dealer at the point of sale, allowing the buyer to use it as an immediate discount
Eligible Vehicles
Not all EVs qualify for the full $7,500 tax credit. The eligibility depends on various factors, including the MSRP, the vehicle’s final assembly location, and the origin of battery components. Here’s a list of some vehicles that qualify for federal tax credits as of March 2024, but remember, eligibility can vary by specific model and year:
- Acura ZDX (2024): Up to $7,500
- Chevrolet Bolt EUV (2022-2023): Up to $7,500
- Ford F-150 Lightning (2022-2024): Up to $7,500
- Tesla Model Y (2023-2024): Up to $7,500
- Volkswagen ID.4 (2023-2024): Up to $7,500
For a complete and updated list of eligible vehicles, including Plug-in Hybrid Electric Vehicles (PHEVs) that currently qualify, and for more specific details on tax credit amounts and eligibility criteria, it’s essential to check directly with manufacturers or local dealers.