The electric vehicle (EV) tax credit is a benefit that helps make buying electric cars more affordable. In 2024, this credit has seen some updates that could affect how you claim it and how much you can save. This guide will explain these changes and help you understand if you qualify.
What is the EV Tax Credit?
The EV tax credit is a discount that reduces how much tax you owe if you buy an electric car. If you owe less tax than the credit amount, you won’t get money back; the credit just reduces your tax to zero. Starting in 2024, you can also choose to apply this credit directly at the dealership to lower the price of the vehicle right away.
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Qualifying for the Tax Credit
To qualify for the tax credit, you need to meet certain conditions related to your income and the car’s specifications:
Income Limits:
- Single or married filing separately: $150,000.
- Head of household: $225,000.
- Married filing jointly: $300,000.
- These limits are lower for used electric cars.
Vehicle Requirements:
- New SUVs, vans, and trucks: Price must be $80,000 or less.
- New sedans and other small cars: Price must be $55,000 or less.
- Used cars: Price must be $25,000 or less, and the car must be at least two years old.
Other Conditions:
- The car must be manufactured mainly in North America.
- It should meet specific environmental standards.
Cars Eligible for the Tax Credit
The following are examples of cars that might qualify for the tax credit if they meet all conditions:
- Acura ZDX (2024) – Full $7,500 credit.
- Cadillac LYRIQ (2024) – Full $7,500 credit.
- Chevrolet Bolt (2022-2023) – Full $7,500 credit.
- Other models from Ford, Tesla, and Nissan also qualify under various conditions.
Note: @Tesla Shared a tweet on Dec 6, 2023, Writing that “Federal $7500 EV tax credit will reduce to $3750 for Model 3 RWD & Long Range on Jan 1, 2024.”
Federal $7500 EV tax credit will reduce to $3750 for Model 3 RWD & Long Range on Jan 1, 2024.
Take delivery by 12/31 for full tax credit → https://t.co/7Ol1BvJoj8 https://t.co/MTlNZLTDvc
— Tesla (@Tesla) December 6, 2023
How to Claim the EV Tax Credit?
You can claim the tax credit when you file your taxes by including it on Form 8936. If you choose to transfer the credit to the dealer, you’ll need to report this on your tax return and provide documentation like your vehicle’s identification number (VIN) and the date of purchase.
Additional Incentives
Besides the federal tax credit, you might also get other benefits like state rebates or access to carpool lanes, depending on where you live. Check local laws to see what extra incentives are available.
Conclusion
The EV tax credit in 2024 offers a significant benefit for electric car buyers, whether you’re purchasing new or used. Make sure to check all the eligibility criteria and plan accordingly to take full advantage of this opportunity.
Note: Always verify the latest information and consult tax professionals or use reliable tax filing services like NerdWallet Taxes to ensure you get the maximum benefits legally available to you.
Also, Check out the full guide of EV Tax Credit 2024 Here.