EV Tax Credit 2024: How It Works, Who Qualifies

The electric vehicle (EV) tax credit has undergone significant changes for 2024, offering new opportunities for consumers to save money on their EV purchases.

This year brings exciting updates to the federal incentive program, making it easier for buyers to access the credit and potentially save thousands of dollars on their new or used electric vehicles.

New Point-of-Sale Option

Starting January 1, 2024, EV buyers can now take advantage of the tax credit at the point of sale. This means you can receive an immediate discount on your vehicle purchase, rather than waiting to claim the credit on your tax return. This change makes the incentive more accessible and attractive to potential EV buyers.

Credit Amounts

The maximum credit for new electric vehicles remains at $7,500, while used EV buyers can qualify for up to $4,000.

However, it’s important to note that not all vehicles will be eligible for the full credit amount, as it depends on factors such as battery sourcing and assembly requirements.

Eligibility Requirements

To qualify for the EV tax credit in 2024, both the vehicle and the buyer must meet certain criteria:

• Income Limits: Single filers must have a modified adjusted gross income (MAGI) of $150,000 or less, while joint filers are capped at $300,000.
• Vehicle Price Caps: New cars must have a manufacturer’s suggested retail price (MSRP) of $55,000 or less, while vans, SUVs, and pickup trucks are capped at $80,000.
• North American Assembly: The final assembly of new EVs must occur in North America to be eligible for the credit.
• Battery and Sourcing Requirements: To receive the full $7,500 credit, vehicles must meet specific battery component and critical mineral sourcing criteria.

Used EV Credit

The tax credit for used EVs, introduced in 2023, continues in 2024 with some specific requirements:

• The vehicle must be at least two model years old
• It must cost $25,000 or less
• The buyer can only claim this credit once every three years.

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How to Claim the Credit

In 2024, consumers have two options for claiming the EV tax credit:

1. Point-of-Sale Discount: You can transfer the credit to the dealer at the time of purchase, receiving an immediate discount on the vehicle price.
2. Tax Return Claim: Alternatively, you can still choose to claim the credit when filing your annual tax return using Form 8936.

Qualifying Vehicles

The list of eligible vehicles may change throughout the year as manufacturers adapt to new requirements. Some models that may qualify for the full or partial credit in 2024 include certain versions of the Chevrolet Bolt EV, Ford F-150 Lightning, and Tesla Model 3.

However, it’s crucial to check the most up-to-date information on the FuelEconomy.gov website or consult with dealerships for the latest eligibility status.

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