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Tursipops
New Member

Inflation reduction act - will I get a tax credit

Does the new Inflation Reduction Act mean that I can get a tax credit for a Tesla in 2023? I know they are over and above their 200,000 limit on tax credits currently. 

2 Replies
rjs
Level 15
Level 15

Inflation reduction act - will I get a tax credit

Right now the Inflation Reduction Act doesn't mean anything, because it hasn't been passed by Congress and signed into law. IF the act is passed in its current form, it will remove the numerical limits for each manufacturer on the credit for electric vehicles. Before you buy a car you will have to check the final rules for the credit after the act becomes law.

 

NCperson
Level 15

Inflation reduction act - will I get a tax credit

@Tursipops also, beyond determining whether the car is eligible for the rebate, there will be an income limit as well.  if your Adjusted Gross Income (AGI - effectively Line 11 for most taxpayers), exceeds these limits in either the current tax year or the prior tax year, you are not eligle for the rebate is the way I read the proposed legislation

 

so if you buy an EV in 2023 and your AGI exceeds these numbers in both 2022 or 2023, you wouldn't be eligible to take the credit, even if the vehicle itself was eligible

Single $150,000

HOH: $225,000

Married: $300,000

 

And while the numberical limit would be removed in the proposed legislation, the amount of US content of certain parts and where the final asssemly occurs would determine whether the car is eligible

 

Lastly, there is a dollar limit on the car itself.  if the MSRP exceeds these limits, the vehicle is not eligible for the credit is the way I read it.

 

Cars: $55,000

Trucks, SUVs. $80,000

 

again, the legislation is simply proposed and requires House approval and Biden signature to become law.

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