The Treasury Department has updated the list of EV models that are eligible for the full tax break.
The 2023 Chevrolet Bolt.
In April, the US Treasury Department disclosed which electric vehicles met the strict new standards required to qualify for the revamped EV tax credit, which is worth up to $7,500. Less than a dozen are eligible for the full incentive now, almost all from American manufacturers.
The Inflation Reduction Act, signed in August, overhauled the lucrative tax break, adding income limits, price caps and other provisions. It also broke the credit into two parts, requiring vehicles to meet sourcing requirements for battery components and "critical minerals" to qualify for both.
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While most of the new guidance went into effect in January, the mineral and battery standards were delayed while the Treasury determined how it would define key terminology like processing and extraction.
The changes to the credit have trimmed the number of models eligible in the short run, but the Biden administration has said that, in the long run, they will result in more people benefiting and more American companies manufacturing zero-emission vehicles.
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To claim the tax break, known as the Qualified Plug-In Electric Drive Motor Vehicle Credit, you will need to file IRS Form 8936 with your tax return.(You will need to provide the VIN for your vehicle.)
You can only claim the credit once, when you purchase the vehicle. In addition, it is a nonrefundable tax credit, which means will not receive any balance beyond the point at which your tax liability is reduced to zero.
These vehicles remain eligible under the new provisions, which are in effect through Dec. 31, 2032. The list will likely grow as "some qualified manufacturers have yet to submit information," the Treasury Department said in a statement. You can find the most up-to-date info on FuelEconomy.Gov.
Since the initial list was announced on April 17, Volkswagen submitted additional documentation that made all versions of its ID 4 eligible for the full $7,500 credit.
These models meet only one of the requirements for battery components and minerals and are eligible for half the credit.
After Rivian submitted documentation to the IRS proving its 2023 R1T and R1S meet the critical minerals requirement, certain configurations of both vehicles are now eligible for the partial credit.
A number of vehicles were eligible at the start of the year but do not meet the new standards. You can only claim a credit if the vehicle was received -- not just purchased -- on or before April 17, 2023.
Audi Q5 TFSI e Quattro |
---|
BMW 330e |
BMW X5 xDrive45e |
Genesis Electrified GV70 |
Nissan Leaf S, S Plus, SL Plus, SV and SV Plus |
Volvo S60 (PHEV), Extended Range and T8 Recharge (Extended Range) |
If you purchased an EV in a previous year but missed claiming the credit, you may still be able to claim a credit by filing an amended return for the tax year when you took possession of it.
Currently, you can claim $3,750 of the $7,500 EV tax credit if at least half of the value of your vehicle's battery components are manufactured or assembled in North America and the other $3,750 if at least 40% of critical minerals -- like graphite, lithium and cobalt -- are sourced from the US or a trade partner. Both requirements increase in the coming years.
Battery components:
Critical minerals:
These makes and models qualify for the credit if they were received between Jan. 1 and April 17, 2023, according to the IRS.
2023 | BMW 330e |
---|---|
2023 | BMW X5 xDrive45e (PHEV) |
2023 | Cadillac Lyriq |
2023 | Chevrolet Bolt EV |
2023 | Ford E-Transit |
2023 | Jeep Grand Cherokee 4xe |
2023 | Jeep Wrangler 4xe |
2023 | Lincoln Aviator PHEV |
2023 | Lincoln Corsair Grand Touring |
2023 | Mercedes EQS SUV |
2023 | Nissan Leaf |
2023 | Rivian R1S |
2023 | Rivian R1T |
2023 | Tesla Model 3 |
2023 | Tesla Model S |
2023 | Tesla Model X |
2023 | Tesla Model Y |
2023 | Volkswagen ID 4 |
2023 | Audi Q5 TFSI Quattro |
---|---|
2023 | BMW 330e |
2023 | BMW X5 xDrive45e |
2023 | Chrysler Pacifica |
2023 | Ford Escape |
2023 | Jeep Grand Cherokee 4xe |
2023 | Jeep Wrangler 4xe |
2023 | Lincoln Aviator Grand Touring |
2023 | Lincoln Corsair Grand Touring |
2023 | Volvo S60 Recharge |
2023 | Volvo S60 T8 Recharge |
The Inflation Reduction Act made several major changes to the tax credit:
Filing status | Income |
---|---|
Single | $150,000 |
Head of household | $225,000 |
Married, filing jointly | $300,000 |
Married, filing separately | $150,000 |
For the most part, these changes took effect on Jan. 1, 2023, and will remain in effect until Jan. 1, 2032. Always check the IRS website for updates.
Beginning in 2023, plug-in electric or fuel-cell EVs can qualify for a credit of up to 30% of its purchase price, maxing out at $4,000.
There are certain restrictions:
Below are income caps for owners of used EVs wishing to claim the credit.
Filing status | Modified adjusted gross income |
---|---|
Single | $75,000 |
Head of household | $112,500 |
Married, filing jointly | $150,000 |
Married, filing separately | $75,000 |
In addition to the federal EV tax credit, a number of states offer rebates for clean vehicles. Some can't be taken in conjunction with the federal credit, so be sure to get all the information before claiming anything.
California's Clean Vehicle Rebate Project offers credits of between $1,000 and $7,000 for the purchase or lease of certain new EVs, plug-in hybrids and fuel-cell vehicles. EnergySage, an online marketplace for home solar-energy solutions, has a list of state rebate programs.
The Energy Department's Alternative Fuels Data Center has information on various incentives offered by states, utilities and private organizations.
The Inflation Reduction Act also extended the tax break for residential charging systems through 2032 and made it retroactive to Jan. 1, 2022.
It's worth $1,000, or 30% of the cost of buying or installing the system, whichever is less.
The credit now also applies to bidirectional charging equipment, which lets you use your EV to power other appliances or even your home. Not many models have that capability, but it can be handy in an outage or other emergency.
To claim the Alternative Fuel Vehicle Refueling Property Credit, you must file IRS Form 8911.
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