Tax Credit Qualifications
Since Congress passed the Inflation Reduction Act of 2022, customers who purchase vehicles that utilize clean energy will be eligible for a tax credit. In order to qualify for this tax credit, customers must purchase a new vehicle that was manufactured during or after the year 2010. This tax credit does not apply for used electric vehicle purchases.
While the tax credit allows up to $7,500, customers may find themselves in situations where they don’t receive the full tax credit limit. Certain factors like battery capacity, state incentives, and other local incentives may be applied to determine the credit amount customers will receive.
A list of electric vehicle models and their tax credit information from The U.S Department of Energy can be found here.
Internal Revenue Service Preliminary Qualifications
With this tax credit being implemented recently, electric vehicle customers who have purchased a vehicle before the passing of the Inflation Reduction Act of 2022 might wonder if this tax credit is applicable to them. The IRS has addressed these kinds of scenarios by making the statements that are listed below.
- For Vehicles Purchased Before August 16, 2022
- If you entered into a written binding contract to purchase a new qualifying electric vehicle before August 16, 2022, but do not take possession of the vehicle until on or after August 16, 2022 (for example, because the vehicle has not been delivered), you may claim the EV credit based on the rules that were in effect before August 16, 2022. The final assembly requirement does not apply before August 16, 2022.
- For Vehicles Purchased Between August 16, 2022 – December 1st, 2022
- If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold). If you entered into a written binding contract to purchase a new qualifying vehicle before August 16, 2022, see the rule above.
More information from the Internal Revenue Service regarding the tax credit can be found here.
With new renewable energy programs being implemented, clean energy providers are rewarding those that are making the switch to renewable energy. Purchasing an electric vehicle of any kind doesn’t only help customers save on fuel costs, but they are also rewarded for making the switch. The best way for customers to fully take advantage of their eclectic vehicles is by installing an EV charging station. These can be installed along with newly installed PV solar systems or already existing PV solar systems. Now is the perfect time for customers to consider switching to an electric vehicle.