Electric vehicles (EVs) have significantly infiltrated the mass market, becoming more popular as...
What EV Models Will Qualify for Tax Rebates?
The new Inflation Reduction Act includes some excellent rebates if you buy an electric vehicle, but the rules can be confusing. Talk to your tax professional to get more details - and then call us to learn about EV charging installation.
In the meantime, here are some bullet points we thought were worth sharing in case you're considering an EV purchase.
What are the US EV Requirements to Qualify for Tax Rebates?
The new law, called the Clean Vehicle Credit, is a remake of the former Qualified Plug-in Electric Drive Motor Vehicle Credit (also known as IRC 30D.) Considering the incentives that will make EV ownership more affordable for many people, this could be the optimal time to purchase a new or used EV.
- The Clean Vehicle Credit provides a rebate in the form of a $4,000 tax credit for purchasing a used EV and up to $7,500 for a new one. However, that’s not the only thing you need to know. Previously, manufacturers were limited to a certain number of vehicles eligible for tax credits; however, starting January 1, 2023 those limits will no longer apply. Another significant change is that this federal tax credit can also be used as a rebate when you purchase, rather than solely as a federal tax credit. In addition, the tax credit will be available through 2023.
There are some strings attached:
- To qualify for the tax credit, eligible EVs must go through final assembly in the United States. Foreign cars are eligible, provided the final assembly is done here in the U.S.
- One selling point of the credit is the “Made in the USA” stipulation, which includes new requirements for the battery. The components of the battery cannot be made by any foreign government, some companies, and even certain people.
- There are income factors that must be met to qualify for the credit after purchasing a new EV. An individual must make less than $150,000. In addition, heads of households buying new must meet a requirement of less than $225,000, or $300,000 per year for joint filers. When buying a USED EV over two years old, the numbers are $75K, $112.5K, and 150K for joint filers, respectively.
- The price of a new EV must be under $55K; SUVs, trucks, and vans must cost less than $80K; for used vehicles, the cost must be less than $25K. Used vehicles may not need to comply with those assembly location requirements referred to previously, so check each vehicle at the time of purchase to be sure.
- The electric vehicle must be purchased after August 16, 2022. There is only ONE credit per vehicle. This is NOT an annual credit.
- The Clean Vehicle Credit is a federal tax credit. A state may have additional tax credits available.
Does Any New or Used EV Model Currently Qualify for The Credit?
The number of EVs eligible for the new tax credit is expected to climb, especially after 2023. But, for now, in 2022 and early 2023, the Department of Energy says these vehicles could be eligible for the Clean Vehicle Credit.
Even if you choose an EV from this list, you need to check the eligibility of the model you've chosen at the time of purchase, to confirm that it's still eligible.
Before you make a purchase, it’s important to pay attention to which benefits are available AT THE TIME OF PURCHASE to avoid issues down the line.
Installation of a Home Charging Station
The next step is choosing your home charging station and installer once you've decided on the right EV for you and your needs. Wilcox Electric has become a leader in EV charging station installation throughout the greater DC area. Get in touch with us to determine whether a Level I or Level II install will work best for your EV home charging station.
Wilcox Electric has served Washington, DC-area homeowners for over 30 years with a reputation for quality work and reliability. Our professional team can provide a heavy-up or any other electrical need you have. Contact us, and we’ll work to earn your trust, too.