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In President Biden’s previous $174 billion investment plan for electrification, the tax credit was quickly mentioned as a reform. Previously, there were rumors that the federal tax credit would be increased to $10,000. The White House has introduced two bills to expand EV adoption, one of which was signed by the President and includes funding for heavily expanded EV charging infrastructure. President Biden first vowed to make the nation’s entire federal fleet all-electric. The Biden administration continues to expand EV adoption However, under new terms of the tax deal, you may be able to snag that credit up front at the point of sale of your EV. 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.

BEST HYBRID SUV 2021 FULL

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. To begin, here’s how the Federal EV tax credit currently works. We have dug into those new terms more below. Now, thanks to the freshly inked Inflation Reduction Act, there are a lot more parameters to be mindful of, like the requirement that the EV must be assembled in North America for instance. In reality, the amount you qualify for is based on both your income tax as well as the size of the electric battery in the vehicle you own. 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 idea in theory is quite simple - “All electric and plug-in hybrid vehicles that were purchased new in or after 2010 may be eligible for a federal income tax credit of up to $7,500,” according to the US Department of Energy. How does a federal tax credit work for my EV? Tax incentives on electric vehicles are worth the research.

Other tax credits available for electric vehicle owners.Plug-in hybrid electric vehicles (PHEVs).

What electric vehicles qualify under the previous tax credit?.What electric vehicles could qualify under the latest tax credit?.Vehicles purchased and delivered between August 16 and December 31, 2022.What are the current electric vehicle credits before the terms change?.New Federal Tax Credits under the Inflation Reduction Act.Revived EV tax credits have officially been signed by POTUS.The Biden administration continues to expand EV adoption.How does a federal tax credit work for my EV?.

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