To qualify for the federal electric vehicle tax credit, vehicles must meet specific criteria:
1. Vehicle Eligibility
- Price limits:
- SUVs, trucks, vans: MSRP ≤ $80,000
- Sedans, hatchbacks, wagons: MSRP ≤ $55,000.
EPA classifications (listed on the window sticker) determine vehicle categories.
- Assembly location:
Must be assembled in North America (U.S., Canada, Mexico). Models like BMW i4, Hyundai Ioniq 5, and Kia EV6 do not qualify due to overseas assembly.
2. Battery Requirements
The $7,500 credit is divided into two $3,750 portions, each with separate rules:
Battery Component
- North American manufacturing:
- 2023: 50%
- 2024: 60%
- 2025: 60%
- 2026: 70%
- 2027: 80%
- 2028–2032: 90–100%
Critical Minerals
A percentage of minerals must be sourced from the U.S. or free-trade partners:
- 2023: 40%
- 2024: 50%
- 2025: 60%
- 2026: 70%
- 2027–2032: 80%
3. Income Limits
- Filing status:
- Joint filers: Modified AGI ≤ $300,000
- Heads of household: ≤ $225,000
- Single filers: ≤ $150,000.
- Income can be assessed for the current or prior tax year.
Additional Notes
- Leased vehicles: May bypass MSRP/assembly rules in some cases.
- Used EVs: A separate $4,000 credit exists with different eligibility.
- Tax liability: The credit is nonrefundable but transferable to dealers starting in 2024.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-specific-requirements-for-the-vehicle-to-qualify-for-the-tax-credit/
