The Internal Revenue Service can give eligible taxpayers a credit of up to $7,500. This tax credit is under Code Section 30D if you purchase a new car that qualifies as a plug-in EV or FCV (fuel cell electric vehicle).
Thanks to the Inflation Reduction Act from 2022, some rules have changed and taxpayers can benefit from this IRS tax credit until 2032. You can enjoy it even if you bought it in 2023.
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IRS unveils who qualifies for this tax credit
For your information, to qualify for the credit for new clean vehicles you must meet several requirements. First, you should know that you can be either a business or an individual.
Secondly, it is essential that you buy it for your own use and this IRS tax credit is not meant for resale. What is more, it is important to know where you are going to drive.
Keep in mind that you must use it mainly in the United States. That means you cannot buy it to take it to another country. But there are also income thresholds to get this credit from the IRS.
IRS set income limits for the clean vehicle credit
Remember that your modified AGI (adjusted gross income) may not be over $300,000 for couples who are married and file jointly. This is the same for a surviving spouse.
Heads of households can have a modified AGI of $225,000. Finally, if you are none of the aforementioned filers, your AGI cannot exceed $150,000. Interestingly, you can use the AGI from the year before the delivery of the vehicle or from the same year.
Therefore, if your AGI is below the threshold in one of the 2 years, you can claim the credit. The IRS warns that if you do not transfer the credit, it is nonrefundable when you file your tax return. Usually, the base amount is $2,500 and it can be up to $7,500. Check if your vehicle qualifies at: https://fueleconomy.gov/feg/tax2023.shtml