These electric “go-green” vehicles don’t use gas-powered engines, allowing you to save potentially thousands of dollars each year on gas alone. And with the Infrastructure Investment and Jobs Act allocation of $7.5 billion to states and local governments to help increase public charging station availability nationwide, consumers should find it easier to adopt energy efficient cars.
In addition, you may qualify for a Clean Vehicle Credit (formerly Plug-In Electric Vehicle Credit). Though there were some changes to the credit as a result of the Inflation Reduction Act of 2022, the maximum amount of the credit remains $7,500 for new vehicles and $4,000 for used vehicles. If you find yourself in the market for a go-green vehicle note there are significant hurdles you’ll have to overcome to qualify for the new Clean Vehicle Credit:
*The new income thresholds are effective December 31, 2022, If you income is excess of that mentioned above, you may consider a purchase prior to year-end to take advantage of any remaining credits.
Domestic Production Hurdle
What You Can Do
IRS.gov provides an index of manufacturers to help you determine if a particular brand and model year qualifies for the tax benefit. The Department of Energy provides a list of model year 2022 and early model year 2023 electric vehicles that meet the final assembly requirement. And keep in mind that beginning with vehicles acquired after 2023, purchasers may transfer the credit to the dealer (meaning the credit could be applied to lower your cash outlay for the car rather than waiting to receive the benefit when you file your tax return).
The manufacturing restrictions written into the bill make most currently available electric vehicles ineligible for the credit. The new rules also allow for a 30% credit for commercial vehicles that meet certain qualifications.
There will be more details on how to obtain these credits in the future. As always, planning ahead can help you maximize your financial situation and position you for greater success.
Please contact our office at (972) 503-1040 if you’re considering a purchase a clean vehicle to discuss how these credits may apply to you.
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