How Federal tax credits Can Make Buying Electric Cars More Affordable
By Renee Valdes
Are you considering purchasing an electric vehicle (EV)? If so, you’ll be pleased to know that, in addition to the numerous environmental benefits, there are also financial incentives available to help reduce the cost. One such incentive is the federal tax credit, which can significantly offset the purchase price of a zero-emission vehicle. By taking advantage of this credit, combined with state and local rebates, you can make buying an EV a more affordable and attractive option.
Understanding Federal tax credits for Electric Cars
Firstly, it’s important to understand how the federal tax credits for electric cars work. The Inflation Reduction Act extends the current incentives of up to $7,500 in tax credits for select electric cars, plug-in hybrids, and hydrogen-powered vehicles that meet government qualifications. The qualifying vehicles are regularly updated by the federal government, so it’s essential to stay informed about the latest list of eligible EVs.
Income and Price Caps
To qualify for the tax credits, there are certain income and price caps in place. Individuals reporting adjusted gross incomes of $150,000 or less on taxes, $225,000 for those filing as head of household, and $300,000 for joint filers are eligible for the rebates. Additionally, the incentives only apply to low-emissions trucks, SUVs, and vans with manufacturer’s suggested retail prices (MSRPs) of up to $80,000, and cars up to $55,000.
Used Electric Vehicle Rebate
If you’re considering purchasing a used electric car priced under $25,000, there’s good news for you too. You may qualify for a tax credit of up to $4,000, subject to income and other limits. However, please note that the vehicle must be at least two model years old and purchased at a dealership. It’s also important to remember that each used vehicle can only qualify for the credit once in its lifetime, and purchasers can only claim one credit every three years.
Additional Benefits and Updates
There are several other benefits and updates worth mentioning. Firstly, leased vehicles may also qualify for credits of up to $7,500, allowing for lower lease costs. Additionally, starting from January 1, 2023, manufacturers like GM and Tesla are no longer limited to the first 200,000 EVs sold in terms of incentives. Furthermore, hydrogen fuel-cell cars such as the Toyota Mirai or Hyundai Nexo are also eligible for the $7,500 credit. Lastly, there is a 30% tax credit up to $1,000 available for home electric car chargers and installation costs.
List of Qualifying Electric Vehicles
Here is the latest list of electric and plug-in hybrid vehicles that qualify for the federal tax credits as of April 18, 2023:
|Vehicle||Credit Amount||MSRP Limit|
|2024 BMW x-Drive50e PHEV||$3,750||$80,000|
|2023-2024 Cadillac Lyriq||$7,500||$80,000|
|2024 Chevrolet Blazer EV||$7,500||$80,000|
Please note that this list is subject to change as car manufacturers establish new assembly plants in the U.S. to meet the updated requirements.
With the availability of federal tax credits, purchasing an electric vehicle has become more financially feasible than ever before. By taking advantage of these incentives, along with state and local rebates, you can significantly reduce the cost of buying a zero-emission vehicle. So, why not explore your options and make a greener choice for your next car?
Read More of this Story at www.morningstar.com – 2023-11-21 10:03:00
Read More US Economic News