The Inflation Reduction Act of 2022 marks a significant step forward in making electric vehicles (EVs) more accessible to Americans. The act offers a generous $7,500 tax rebate for EV buyers, effectively reducing the vehicle’s price tag by the same amount, provided the purchaser owes at least that much in taxes. This rebate, however, is not applicable for leased vehicles.
The Specifics of the Tax Rebate
For vehicles bought since mid-April 2023 and projected to continue through 2032, a tax credit of $7,500 is available if the vehicle meets the critical minerals and battery components requirements. It’s important to note that to be eligible for this rebate, there are income limitations. The 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.
For the specific details of these requirements and further guidance, potential buyers are advised to visit the official IRS website.
Looking at Used Electric Vehicles
The Act also includes a lower tax credit of up to $4,000 for used EV purchases.
More guidance on how to avail the $4,000 used EV tax credit can be found through the link below.
Finding Compliant Vehicles
The Inflation Reduction Act’s tax credit only applies to compliant vehicles. A full list of these cars can be found at the link below.
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State Tax Credits
In addition to the federal tax rebate, some states also offer their own tax credits. This means that buyers can potentially save even more on their EV purchases.
>> MORE ON STATES THAT OFFER EV TAX CREDITS
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