Buying an electric vehicle? Here are six things to know:
1. A new clean vehicle tax credit takes effect in 2023. The maximum amount of the new credit is $7,500, but many new requirements are imposed, including:
• electric vehicle price caps
• electric vehicle purchaser income caps
• domestic sourcing requirements for electric vehicle batteries
2. Beginning in 2023, the new clean vehicle credit eliminates the 200,000 vehicles per manufacturer cap. Popular electric vehicles manufactured by GM, Toyota, and Tesla will qualify for the 2023 credit if they meet the price cap and other requirements.
3. Starting in 2023, individual taxpayers can purchase certain used electric vehicles from dealers (not individuals) and claim a credit of up to $4,000 if their income is below an annual cap.
4. Starting in 2024, electric vehicle purchasers will be able to transfer their credit to the dealer, who will in turn offer them up to $7,500 in a cash rebate or price reduction, or treat the credit as a down payment.
5. Business taxpayers have the option of qualifying for the tax credit under either the personal clean vehicle credit or the commercial clean vehicle credit.
6. The commercial clean vehicle credit avoids the North American assembly rules, income limits, and price-of-vehicle limits.
Are you contemplating a clean vehicle purchase and have questions about the tax credits available now and in the future? If so, please contact me for more information.