Sunday December 10, 2023
2024 EV Credits for Auto Purchases
The IRS allows a credit for a new EVs of up to $7,500 per vehicle. The credit for qualified vehicles is $3,750 for the vehicle if certain mineral requirements are met, and $3,750 for a qualified battery. The law permits the Secretary of the Treasury to enable the taxpayer to transfer the credit to a registered automobile dealer.
There are specific requirements that the dealer must meet in order to reduce the EV price by the credit amount. The dealer must disclose the suggested retail price by the manufacturer, the value of the credit and the fact that the price is reduced by the credit amount.
The dealer must be certain that the credit does not reduce any other benefits or incentives. If the taxpayer is below the required income amounts, the credit will not be included in his or her taxable income.
Taxpayers may qualify for the new EV credit as a couple filing a joint tax return with income under $300,000 or a single taxpayer with income under $150,000. The IRS is permitted to make advanced payments to qualified dealers for the credit amounts.
A dealer is defined as an individual who is qualified by a state agency to engage in the sale of automotive vehicles. The dealer should ensure that the taxpayer is qualified for the credit. If the taxpayer has income over $300,000 (couple filing a joint tax return) or $150,000 (single taxpayer), the tax credit will be recovered when the taxpayer files his or her tax return.
There is a credit for the lesser of $4,000 or 30% of the sale price for the first sale of a used vehicle that has a model year at least two years old. This used vehicle must have a sale price of $25,000 or less. A qualified buyer for the used EV credit may have income up to $150,000 filing jointly or $75,000 for a single taxpayer.
Editor’s Note: There are several vehicles that qualify for the full $7,500 credit in 2024. Some models include but are not limited to the 2024 Ford F-150 Lightning, Lincoln Aviator, Chevrolet Silverado, Blazer and Equinox, Chrysler Pacifica, Tesla Model 3 and Model Y and Cadillac Lyriq. There are also vehicles in which the battery will qualify for a reduced credit of $3,750. These include some models (not all) of Ford Mustang Mach-E, Jeep Grand Cherokee and Wrangler, Lincoln Corsair and Rivian R1S and R1T.