Find Out Which Electric Vehicle Currently Qualifies For The US Federal Tax Credit
More and more people are buying electric vehicles these days, and a lot of them want to know if they can get a tax credit from the government. It's especially confusing because there are a bunch of new credits that have been brought back for people in the United States, but the rules keep changing, and it can be hard to understand.
Figuring out if you qualify for the tax credit is not as straightforward as a simple "yes" or "no." Well, it might be easy to determine if you qualify or not, but the amount you might get depends on different things specific to your household.?Moreover, starting January 1, 2023, there are new rules that limit the number of electric vehicles (EVs) that can qualify based on factors related to local manufacturing in the US.
How Does The US Federal Tax Credit Apply To Your EV?
The logic behind it is quite simple; as per the IRS, "You may qualify for a credit up to $7,500 under Internal Revenue Code Section 30D if you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV). The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles purchased from 2023 to 2032."??
However, you can't just buy an electric vehicle and assume that the government will deduct $7,500 from your taxes in April. The truth is, the amount you qualify for depends on both your income tax and specific details about the electric vehicle you buy, including where it's made.
Which EVs Could Potentially Qualify For Full Tax Credit As Of 2023?
Okay, this is likely the main reason you're here. After the IRS made changes, the US Treasury Department postponed providing specific instructions about the type of batteries that electric vehicle manufacturers need to use in order for their vehicles to qualify. Even though the department was supposed to give these instructions by December 2022, they said they needed more time and will now provide them by March 2023.
Because of this, the requirements mentioned earlier about assembling battery components and sourcing materials from North America are not being enforced. However, starting April 18, 2023, these requirements will be in effect.
The vehicles that come under the full federal tax credit are the Cadillac Lyriq, Chevrolet Blazer EV, Chevrolet Blazer EV, Chevrolet Bolt EUV, Chevrolet Equinox EV, Chevrolet Silverado EV, Chrysler Pacifica plug-in hybrid EV, Lincoln Aviator Grand Touring plug-in hybrid EV, Tesla Model 3, and Tesla Model Y.
There are some vehicles that fall under the partial credit system. These vehicles are the Ford E-Transit, Ford Escape plug-in hybrid EV, Ford F-150 Lightning, Ford Mustang Mach-E, Jeep Grand Cherokee plug-in hybrid 4xe, Jeep Wrangler plug-in hybrid 4xe, and Lincoln Corsair Grand Touring plug-in hybrid EVz.
