The new EV tax credit is complicated. Here’s who qualifies

Tax credits now only apply to buyers with incomes less than or equal to $150,000 for single filers, $225,000 for heads of household, and $300,000 for joint filers. 

The price of the new EV purchased must be less than $55,000 for cars and below $80,000 for SUVs, pickup trucks, and vans in order to qualify. 

The new credit expands eligibility by including used EVs, as well as new ones — if you buy a used EV, you could receive a credit of up to $4,000. 

If you want to purchase an EV with an up to $7,500 tax credit, you can only consider EVs assembled in North America and powered by batteries with materials sourced from the US or its free trade partners. Essentially, your new electric car needs a “Made in America” stamp.

These provisions limit the manufacturers that qualify for the credit. According to PBS, battery materials processed in China power the vehicles of quite a few American EV manufacturers, including Tesla. The new credit also raises the bar for plug-in hybrids or PHEVs: TechCrunch notes that new PHEVs need 7 kWh battery packs in order to qualify. One of the aims of the act is to make electric cars more affordable, but fewer models of EVs meet all of these parameters. 

Instead of financing the full price of the car and then getting money back when filing taxes, buyers can immediately purchase the car at the dealership with the credit deducted from the price. 

According to Bankrate, two people in the same household can separately claim the credit if they buy two EVs individually. If they buy an EV together, the credit only applies once. 

Starting January 2023, the dealership should have the tax credit already factored into the price. You get the credit included with the price of the EV.

Tax credits now only apply to buyers with incomes less than or equal to $150,000 for single filers, $225,000 for heads of household, and $300,000 for joint filers. 

The price of the new EV purchased must be less than $55,000 for cars and below $80,000 for SUVs, pickup trucks, and vans in order to qualify. 

The new credit expands eligibility by including used EVs, as well as new ones — if you buy a used EV, you could receive a credit of up to $4,000. 

If you want to purchase an EV with an up to $7,500 tax credit, you can only consider EVs assembled in North America and powered by batteries with materials sourced from the US or its free trade partners. Essentially, your new electric car needs a “Made in America” stamp.

These provisions limit the manufacturers that qualify for the credit. According to PBS, battery materials processed in China power the vehicles of quite a few American EV manufacturers, including Tesla. The new credit also raises the bar for plug-in hybrids or PHEVs: TechCrunch notes that new PHEVs need 7 kWh battery packs in order to qualify. One of the aims of the act is to make electric cars more affordable, but fewer models of EVs meet all of these parameters. 

Instead of financing the full price of the car and then getting money back when filing taxes, buyers can immediately purchase the car at the dealership with the credit deducted from the price. 

According to Bankrate, two people in the same household can separately claim the credit if they buy two EVs individually. If they buy an EV together, the credit only applies once. 

Starting January 2023, the dealership should have the tax credit already factored into the price. You get the credit included with the price of the EV.