Did you know that you can save up to $7,500 when buying a new electric vehicle? This amount will vary depending on the vehicle’s model and your tax liability as the buyer.
This is possible through the Federal Tax Credit for plug-in electric vehicles. It took effect on August 16, 2022, after the IRA or Inflation Reduction Act was signed into law.
How Can You Avail of the Tax Credit?
There has already been a tax credit for electric vehicles since 2009. However, the law was changed in 2022, prioritizing domestically manufactured EVs.
You have to check if your vehicle is eligible for the tax credit, especially when you received or purchased it after August 16, 2022.
Here’s a look at the vehicles that qualified for the tax credit of $7,500:
- All electric vehicles manufactured in North America are automatically qualified for this benefit.
- In 2023, additional rules will be implemented. They include a $3,750 credit for battery components of these vehicles manufactured or assembled in the US. You will also get $3,750 credit if the materials used for the battery come from the US or a trade ally.
It is best to check your state regarding the eligible vehicles. To date, many electric vehicles are no longer qualified for this benefit.
However, many manufacturers expect the law to change over time. They are also hopeful that the cap per manufacturer will be lifted to accommodate more sales and more savings for the customers.
Whether or not the law changes, buying and using electric vehicles is still a wise investment. It’s time to make the change.
You will be able to save more money by using electric vehicles than fuel-powered cars. They require minimal maintenance, and you are not fuel-dependent, making them good for your budget and the environment.
