Reader Danno reminds us of the Inflation Reduction Act of 2022 which enacted a potential $7,500 tax rebate for purchasers of an electric vehicle. That comes as a full refund on your taxes; essentially a $7,500 discount on the car price – assuming you owe at least $7,500 in taxes. The rebate is not applicable for a car lease.
For vehicles purchased since mid-April 2023, and continuing through 2032, you’ll get a $7,500 tax credit if the vehicle meets the critical minerals requirements and the battery components requirements. To be eligible, your modified adjusted gross income (AGI) may not exceed $300,000 for married couples filing jointly, $225,000 for heads of households, or $150,000 for all other filers.
- Read full details on the IRS website
- There’s also a lower tax credit of up to $4,000 for used EV purchases. See guidance for the $4,000 used EV tax credit here
- Full list of compliant cars here
- Also important: some states have their own tax credit, on top of what the feds offer. Read more here and see another article with a list here (scroll down for list) and another list.
