The eligibility criteria for the up to $7,500 federal EV tax credit under the current rules (applying to new qualifying vehicles purchased in 2023 or later) are as follows:
Vehicle Eligibility Requirements
- The vehicle must be a new plug-in electric vehicle (EV) or fuel cell electric vehicle (FCV) placed in service in 2023 or after.
- It must have a battery capacity of at least 7 kilowatt hours.
- The vehicle must have a gross vehicle weight rating under 14,000 pounds.
- The vehicle must be manufactured by a qualified manufacturer and meet specific battery sourcing and critical mineral requirements:
- Battery assembly/manufacturing in North America: The percentage required increases over time (e.g., 60% in 2024, rising to 100% by 2029).
- Critical minerals sourcing: A required percentage of critical minerals must be extracted or processed in the U.S. or countries with trade agreements; this percentage also increases over the years (e.g., 50% in 2024, rising to 80% by 2027 and beyond). These two sourcing criteria each account for half of the $7,500 credit, so a vehicle meeting both gets the full credit; meeting only one can yield a partial credit of $3,750.
Buyer Eligibility Requirements
- The purchaser must buy the vehicle for their own use, not for resale.
- The vehicle must be primarily used in the United States.
- Income limits based on Modified Adjusted Gross Income (MAGI) apply:
- $300,000 or less for married couples filing jointly or surviving spouses
- $225,000 or less for heads of households
- $150,000 or less for all other filers
- The income limit check uses MAGI from the year of vehicle delivery or the prior year, whichever is lower; qualifying in either year allows claiming the credit.
- The credit is nonrefundable, meaning it can only reduce your tax liability and cannot be carried forward or refunded if unused.
Additional Notes
- Sellers of qualifying vehicles must register and report vehicle information to the IRS for the vehicle to be eligible.
- The stricter battery and sourcing rules took effect for vehicles placed in service after April 17, 2023, and will become more restrictive over time.
- The credit applies to both individuals and businesses.
In summary, to claim the full $7,500 federal EV tax credit, you must purchase a new qualifying EV or FCV with sufficient battery capacity and meet evolving battery and mineral sourcing requirements, meet income limits, use the vehicle primarily in the U.S., and buy it for personal use rather than resale.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-eligibility-criteria-for-the-7500-federal-ev-tax-credit/
