Hi Jhughlette64, 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.”
If you purchase and take possession of a qualifying EV after 8/16/2022 and before 1/1/2023, and you satisfy the final North American assembly requirement (VW iD4 manufactured in Chattanooga TN), the "Pre-IRA 2022" rules apply. Based on below link, the credit should be $7,500 subject to further IRS update.
Index for Manufacturers published by the IRS
https://www.irs.gov/businesses/irc-30d-new-qualified-plug-in-electric-drive-motor-vehicle-credit
You can use the applicable EV credit on your tax year 2022 Federal tax return to offset the tax liability. However, the unused tax credit does not carryover or carryforward to 2023 if you do not use it in the year you purchased the vehicle (2022).
If you have little nor no tax liability in tax year 2022, rather than receive little or no benefit for claiming the EV credit, you can delay purchase until 2024 when you are allowed to transfer the credit to the dealer selling the EV in exchange of reduced sale price.
Thank you and hope the above helps.
Hi Jhughlette64, 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.”
If you purchase and take possession of a qualifying EV after 8/16/2022 and before 1/1/2023, and you satisfy the final North American assembly requirement (VW iD4 manufactured in Chattanooga TN), the "Pre-IRA 2022" rules apply. Based on below link, the credit should be $7,500 subject to further IRS update.
Index for Manufacturers published by the IRS
https://www.irs.gov/businesses/irc-30d-new-qualified-plug-in-electric-drive-motor-vehicle-credit
You can use the applicable EV credit on your tax year 2022 Federal tax return to offset the tax liability. However, the unused tax credit does not carryover or carryforward to 2023 if you do not use it in the year you purchased the vehicle (2022).
If you have little nor no tax liability in tax year 2022, rather than receive little or no benefit for claiming the EV credit, you can delay purchase until 2024 when you are allowed to transfer the credit to the dealer selling the EV in exchange of reduced sale price.
Thank you and hope the above helps.
The Index for Manufacturers published by the IRS indicates the iD4 up to manufacturer year of 2021. The vehicle I am purchasing is a 2023. Will this matter?
The law is new. I hope IRS will update its table soon. In the mean time, please contact your dealer for further clarification. Thank you.