EV tax credit

Forum|Forum|3 years ago
September 28, 2022
2 replies
28 views

Did the Inflation Reduction Act essentially eliminate the tax credit for EV purchase?

Laura_CPA

Level 6

Hi Susanrich306,

Hope all is good on your end! On the contrary, it got extended and changed. For the first time, eligible for a dollar-for-dollar tax credit up to $4,000 or 30% of the sales price (whichever is lesser) for buying a used electric vehicle, depending on income.

Cheers,

Laura

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KochuK

Level 7

Hi Susanrich306, thanks for the event question.

Inflation Reduction Act of 2022 (IRA 2022) signed into law on 8/16/2022. Hence terms used here are “Pre-IRA 2022” and “Post-IRA 2022.”

The new name is Clean Vehicle Credit vs. previously called New Qualified Plug-In Electric Drive Motor Vehicle Credit.

The EV credit is live and well. "Post-IRA 2022" eliminates the phase-out rules when a manufacturer reaches its 200,000th sale, and replaces it with modified credit amounts, qualifying requirements and expiration date.

Starting 1/1/2023, it has taxpayer income limits, vehicle price limits, and many other rules. A qualified EV purchased from GM and Tesla qualifies once again for the credit under the new law.

I find the page 2 chart from below link helpful. Please focus on "Pre-IRA 2022 Plug-in EV Credit" and "Post-IRA 2022 Clean Vehicles Credit and Credit for Previously Owned Clean Vehicles" columns.

Clean Vehicle Tax Credits in the Inflation Reduction Act of 2022

https://crsreports.congress.gov/product/pdf/IN/IN11996

Page 3 contains links for three "Additional Resources".

Thank you and hope the above helps.

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