To be eligible for federal EV tax credits, both new and used electric vehicles must meet specific requirements. Here are the key eligibility criteria:
New Electric Vehicles
- Income Limitations:
- Married Couples Filing Jointly: Modified Adjusted Gross Income (AGI) must be $300,000 or less.
- Heads of Households: AGI must be $225,000 or less.
- All Other Filers: AGI must be $150,000 or less.
- Vehicle Requirements:
- The vehicle must be a qualified plug-in electric vehicle (EV) or fuel cell electric vehicle (FCV).
- The vehicle must be used primarily in the United States.
- The vehicle must be purchased for personal use, not for resale.
- Battery and Sourcing Requirements:
- To qualify for the full $7,500 credit, the vehicle must meet both the battery and sourcing requirements.
- Battery Requirement: A certain percentage of the battery must be assembled or manufactured in North America—50% for 2023, 60% for 2024 and 2025, increasing to 100% by 2029.
- Sourcing Requirement (Critical Minerals): A certain percentage of critical minerals must be extracted or processed in the U.S. or a country with a U.S. free-trade agreement—40% for 2023, 50% for 2024, and increasing to 80% by 2026.
Used Electric Vehicles
- Vehicle Requirements:
- The vehicle must be purchased from a licensed dealer.
- The vehicle must be primarily used in the U.S.
- It must be a model year at least two years earlier than the calendar year of purchase.
- Price Limitation:
- The sale price of the vehicle must be $25,000 or less.
- Battery Capacity:
- The vehicle must have a battery capacity of at least 7 kilowatt-hours.
- Dealer Reporting:
- The dealer must provide the required information at the time of sale and report it to the IRS.
General Requirements
- Non-Refundable Credit: The tax credit cannot exceed the amount of taxes owed and cannot be applied to future tax years.
- Sellers’ Responsibilities: Sellers must register online and provide information about the vehicle’s eligibility for the tax credit. They must also report this information to the IRS.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-eligibility-requirements-for-federal-ev-tax-credits/
