New Guideline for Electric Vehicle Tax Credit
Did you claim your Electric Vehicle (EV) Tax Credit? The IRS recently issued new guidance on electric vehicles.
There are four ways you can potentially benefit from a federal tax credit for an Electric Vehicle you place in service in 2023 or later:
- Purchase an Electric Vehicle, and claim the clean vehicle credit.
- Lease an Electric Vehicle, and benefit from the lessor’s EV discount.
- Purchase a used Electric Vehicle that qualifies for the used EV tax credit.
- Purchase an Electric Vehicle for business use, and claim the new commercial clean vehicle tax credit.
The new Electric Vehicle tax credit is available through 2032. The Electric Vehicle tax credit can result in a maximum credit of $7,500.
How to Qualify
To qualify for the Electric Vehicle tax credit, you must meet specific criteria. This includes income limits, vehicle price caps, and domestic assembly requirements for vehicles delivered on or after April 18, 2023.
Can’t find an EV that qualifies for the tax credit or your income is too high? You can lease one from a leasing company that can claim up to a $7,500 commercial clean vehicle tax credit. The leasing company may then pass on all or part of the credit to you through reduced leasing costs.
For used vehicle purchases, you can earn a credit of up to $4,000. You must buy the vehicle from a dealer and meet the law’s income caps and other restrictions.
Finally, if you purchase an an EV for business use, you can qualify for the commercial clean vehicle tax credit. This is not subject to critical minerals or battery components rules, making it easier to qualify for this credit starting April 18, 2023.
To claim an Electric Vehicle credit, the seller must complete a seller’s report and provide a copy to you and the IRS. You will file IRS Form 8936; for the commercial credit, you will file IRS Form 8936-A.
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