A growing number of people are opting for electric automobiles, and for good reason. You may save money and save the planet by making the switch. If you buy an eligible EV in 2022, you may be eligible for a tax credit.
There is ample cause to pay attention to shifts this year. The Inflation Reduction Act of last August made adjustments to the preexisting credit and established a new credit altogether. (Please take note that most of these alterations and the new credit will only be available for electric vehicles purchased after 2022.)
Find out how to navigate the 2022 tax law changes with the help of a certified CPA in Hollywood, FL.
Credit for Qualifying Electric Vehicles, 2022
The Qualified Plug-in Electric Vehicle Credit is a credit that will be available in 2022. All-electric, four-wheeled plug-in hybrid vehicles that also fulfill certain battery standards are eligible for this non-refundable tax credit.
The credit is valuable since it can be claimed for up to $7,500. (depending on battery capacity). Be wary, though; the credit will be lower or absent for some models in 2022 due to a manufacturing cap. Vehicles purchased after August 16, 2022, will also be subject to a “final assembly” requirement under the new law. Since this is the case, the final assembly must take place in the Americas.
Do you think this is something you would be able to do? Fill out IRS Form 8936 to receive the deduction.
Funding for Clean Vehicles: 2023-2032
Once 2023 rolls around, the credit will be known as the Clean Vehicles Credit. As of 2023, buyers of used electric vehicles can also take advantage of the Credit for Pre-Owned Clean Vehicles. Keep reading as we list the vehicles that can be purchased with a federal tax rebate.
Who may get the Clean Vehicle Credit?
To qualify for the Clean Vehicle Credit, a buyer must acquire an electric drive motor vehicle that meets certain criteria. The credit is worth up to $7,500, so it’s worth finding out whether you qualify. Claiming the Clean Vehicle Credit is possible for vehicles that are put into service after December 31, 2022, but not for vehicles purchased after December 31, 2032. You will not receive a refund for any unused amount of the credit. Furthermore, the credit cannot be carried forward to the following year’s tax return.