The federal and state electric vehicle (EV) tax credits differ notably in terms of the vehicle Manufacturer’s Suggested Retail Price (MSRP) limits that qualify for the credit.
Federal EV Tax Credit MSRP Limits
- For new clean vehicles eligible for the federal tax credit under the IRS rules, the MSRP limit depends on the vehicle classification:
- Most cars have an MSRP limit of $55,000 to qualify for the federal credit.
- For certain vehicle classes not specifically listed, the $55,000 MSRP limit applies generally.
- However, some luxury or larger vehicles such as trucks and SUVs have a higher MSRP cap of $80,000 for eligibility.
- Examples of vehicles with the $80,000 MSRP limit include 2024-2025 Acura ZDX, Cadillac Lyriq, Chevrolet Blazer EV, Ford F-150 Lightning, and others eligible for the $7,500 federal tax credit.
Thus, federal tax credits set a tiered MSRP limit: $55,000 for most passenger vehicles and up to $80,000 for larger or luxury EV models.
State EV Tax Credit MSRP Limits
- State EV tax credit MSRP limits vary widely by state and program.
- Some state credits have their own MSRP caps that may be lower or higher than the federal limits.
- The specifics depend on the individual state incentives and are not standardized nationwide or necessarily aligned with federal limits.
Summary
| Credit Type | Typical MSRP Limit |
|---|---|
| Federal (most cars) | $55,000 |
| Federal (luxury/truck/SUV) | $80,000 |
| State | Varies by state; not standardized |
The federal credit establishes clear MSRP ceilings tied to vehicle class to determine eligibility. State credits vary independently and may have different MSRP caps or no caps at all depending on the state policies.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-do-the-federal-and-state-ev-tax-credits-differ-in-terms-of-vehicle-msrp-limits/
