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From next year, electric car buyers can claim their tax credits at the time of purchase.
CNN
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People shopping Electric vehicles You can get $7,500 starting next year Federal tax credit They don’t have to wait months to get their tax returns, from the sticker price while at the dealership.
Changes to how car buyers can qualify for a federal tax credit for EVs — part of the Inflation Act — were announced Friday by the Biden administration and are being rolled out to car dealerships before they take effect Jan. 1.
under New guidanceUnder Treasury Department guidelines, buyers of a qualifying new electric vehicle or plug-in hybrid electric vehicle can deduct $7,500 off the sticker price of a new EV or $4,000 off the price of a used EV.
“For the first time, the Inflation Reduction Act allows consumers to lower the price of a clean vehicle, expanding consumer choices and helping car dealers expand their businesses,” said Laurel Blatchford, Treasury’s chief enforcement officer for the Inflation Reduction Act. In a statement. “The IRS is focused on streamlining this process for car dealers as part of a commitment to improve service and help taxpayers claim the credits they deserve.”
More than a dozen new EV models and some of their variants are eligible for all or half of the new credit. A small number of models, mostly foreign-made vehicles, are currently ineligible. Most of the cars that have qualified so far are made by the “big three” EV automakers in the U.S. — Ford, General Motors and Stellar — plus Tesla and German automaker Volkswagen.
Many foreign companies are building EV factories in the US to take advantage of future tax incentives.
A 2022 George Washington University study found that getting consumer subsidies could be a key piece of the puzzle to getting more people to buy EVs. Researchers surveyed more than 2,000 U.S. car buyers and found that the majority would prefer to get a refund instead of waiting to file their taxes and get a loan. The researchers found that the preference was even higher for low-income families, used-vehicle buyers and those with tighter budgets.
The Biden administration is currently contacting dealers with information on how to register on a new federal website, eventually offering pre-tax credits to consumers. According to a Treasury press release, car sellers will be reimbursed by the government within 72 hours of selling the car.
