Starting January 1, many Americans will qualify for a tax credit of up to $7,500 for buying an electric vehicle. The credit, part of changes enacted in the Inflation Reduction Act, is designed to spur EV sales and reduce greenhouse emissions.
It depends on your income. For new EVs, buyers cannot have an adjusted gross income above $150,000 if single, $300,000 if filing jointly and $225,000 if head of a household.
For used EVs, buyers cannot earn more than $75,000 if single, $150,000 if filing jointly and $112,500 if head of household.At first, it will be applied to your 2023 tax return, which you file in 2024. Starting in 2024, consumers can transfer the credit to a dealership to lower the vehicle price at purchase.Yes, but it probably will take a few years, says Mike Fiske, associate director for S&P Global Mobility.
And automakers may have trouble certifying the sources of battery minerals and parts, a requirement for buyers to receive the full credit. Automakers have been scrambling to move more EV supply chains to the U.S.Consumers can receive tax credits of up to $4,000 — or 30% of the vehicle price, whichever is less — for buying EVs that are at least two years old. But the used EV must cost less than $25,000 — a tall order given the starting prices for most EVs on the market. A search on Autotrader.
"The real effects where these tax credits will have a big impact will be in the 2026-to-2032 period — a few years into the future — as automakers gear up and volumes increase," said Chris Harto, a senior policy analyst for Consumer Reports magazine.The credits are part of roughly $370 billion in spending on clean energy — America's largest investment to fight climate change — that was signed into law in August by President Joe Biden. EVs now make up about 5% of U.S.
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