To qualify for both federal and state EV tax credits, you must meet several specific requirements. Here’s a breakdown of the key factors to consider for both new and used electric vehicles:
Federal EV Tax Credits
New Electric Vehicles
- Vehicle Qualifications:
- The vehicle must be a new, qualified plug-in electric vehicle (EV) or fuel cell vehicle (FCV).
- It must meet specific battery and critical mineral sourcing requirements.
- Battery Requirement: A percentage of the vehicle’s battery must be assembled or manufactured in North America. The threshold increases each year, starting at 50% in 2023 and reaching 100% by 2029.
- Critical Minerals Requirement: A percentage of the critical minerals in the battery must be extracted or processed in the U.S. or a country with a U.S. free-trade agreement. This starts at 40% in 2023 and rises to 80% by 2027.
- Buyer Qualifications:
- The vehicle must be purchased for personal use, not for resale.
- It must be used primarily in the U.S.
- The buyer’s modified adjusted gross income (MAGI) must not exceed certain limits:
- $300,000 for married couples filing jointly or a surviving spouse
- $225,000 for heads of households
- $150,000 for all other filers.
- Tax Credit:
- The full tax credit is up to $7,500 if the vehicle meets both requirements.
- If only one requirement is met, the credit may be $3,750.
Used Electric Vehicles
- Vehicle Qualifications:
- The vehicle must be a used, previously owned electric vehicle.
- It must have a sale price of $25,000 or less.
- The model year must be at least two years earlier than the calendar year of purchase.
- The vehicle must not have been transferred to a qualified buyer after August 16, 2022.
- It must have a gross vehicle weight rating of less than 14,000 pounds and a battery capacity of at least 7 kilowatt-hours.
- Buyer Qualifications:
- The buyer’s income limits are $150,000 for joint filers.
- A buyer can claim the credit once every three years.
- Tax Credit:
- The tax credit for a used electric vehicle is up to $4,000.
State EV Tax Credits
Requirements for state EV tax credits vary by state and are not federally mandated. However, many states offer incentives such as rebates or credits for EV purchases. These can include income and price limits similar to federal credits, but specifics depend on the state’s program. You should check your state’s official resources for detailed requirements and available incentives.
General Steps to Qualify for State Credits
- Check State Incentives: Visit your state’s energy or transportation department website to see which incentives are available.
- Meet State-Specific Requirements: These might include residency, vehicle eligibility, and application deadlines.
- Apply for the Credit or Rebate: Follow the application process provided by your state to receive the credit or rebate.
In summary, while federal rules provide a uniform framework, state rules can vary significantly, requiring you to check local government websites for specific details.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-specific-requirements-to-qualify-for-both-federal-and-state-ev-tax-credits/
