With the recent passing of the Inflation Reduction Act, you can reap the benefit of a $7,500 tax credit on purchasing a new electric vehicle. The new law also includes guidance on purchasing used electric vehicles, which are eligible for a credit for the lesser of $4,000 or 30% of the sales price. To qualify for this credit, there are adjusted gross income limitations as below.
Single – $150,000
Married filing joint – $300,000
Head of household – $225,000
To be eligible under the Inflation Reduction Act, the qualifying vehicle must be purchased after August 16, 2022. Visit this link to see if your new vehicle is eligible – https://afdc.energy.gov/laws/inflation-reduction-act. If you were in a binding contract to purchase a qualifying clean vehicle and did not take possession of the vehicle until after August 16, 2022, you are not subject to pre-existing rules.
For more details on this unwinding credit, please click here.