The environmental friendliness and innovative designs found in electric vehicles today might appeal to you as a car buyer. However, the fact that an EV could earn you a credit on your taxes might appeal to you even more. You can claim this tax credit of $7,500 by ensuring the EV you buy in Plantation, FL, meets specific criteria. Read this guide from our residential electrical services pros to learn more.
Vehicle Type
The IRS will allow you to claim the $7,500 credit on your taxes if your vehicle is one of two types. The first type is a new plug-in electric vehicle (EV). The second is a fuel cell vehicle (FCV). You must buy a new EV or FCV rather than one that is pre-owned.
The main difference between the two involves the way they store and deliver energy. An EV uses energy stored in its batteries, while FCVs use stored fuel that reacts to produce energy. FCVs are more efficient and release water vapor. Whether you buy an EV or an FCV, your vehicle must have a gross vehicle weight rating of less than 14,000 pounds to qualify for the tax credit.
Assembly Location
Along with buying either an EV or an FVC, you must also ensure that your vehicle is assembled in North America. The IRS will not allow you to claim the credit on an EV assembled in Asia, Europe, or any other location outside of North America.
Battery Capacity and Sourcing
Your electric vehicle must have a battery with the required capacity of at least seven kilowatt-hours to qualify for this tax credit.
Furthermore, you must ensure that your EV’s battery meets the required sourcing criteria. It must contain components sourced from either the United States or one of the approved U.S. trade partners.
Additionally, it must contain a specific percentage of critical minerals sourced from the U.S. or one of its trade partners. You can find this information directly from the manufacturer or the dealership.
If the battery in the vehicle only meets the critical minerals requirement, you can still claim a tax credit of $3,750. Similarly, you qualify for a $3,750 tax credit if the vehicle’s battery only meets the components requirement. The battery must meet both the minerals and components requirements to qualify for the entire $7,500 tax credit.
Price Cap
Additionally, the manufacturer’s suggested retail price (MSRP) must fall at or below a stipulated price cap. This cap requires the MSRP to be at or below $80,000 for vans, trucks, and sports utility vehicles.
For other vehicles, the price cap is set at or below $50,000. If the model of your EV exceeds this price cap, it will not qualify for the $7,500 tax credit.
Usage
Likewise, you must ensure that your electric vehicle satisfies the IRS’s usage stipulation for this tax credit. You must purchase the EV for your own use.
Additionally, you must drive and use it in the U.S. If you export the vehicle to drive and use it in another country, you cannot claim the $7,500 credit on your taxes.
Seller Requirements
The IRS requires sellers of EVs to meet certain criteria so that buyers can legitimately claim this credit on their taxes. The dealership in Plantation from which you buy your electric vehicle must provide information about its qualifications. The seller must also register online with the IRS. You cannot claim the credit if you buy an EV from an unregistered or private seller.
The registered seller must also provide you with a paper copy of the EV’s time-of-sale report. Keep this copy for your records, as it verifies that the seller sent the report to the IRS on the day that you purchased the vehicle.
Income Limits
The IRS requires you to meet income limits to qualify for this $7,500 EV tax credit. Your modified adjusted income, or AGI, must not exceed $300,000 for married couples filing jointly or for a surviving spouse, $225,000 for heads of household, and $150,000 for all other tax filers.
Learn About Our Services for Electric Vehicle Owners
At Paragon Electric , we want to become your family’s trusted electrician. Our locally owned electrical business can install an EV charging station in your garage or on your property and much more. We can also install surge protection, electrical panels, and new wiring to help you charge your electric vehicle safely. Our business is accredited by the Better Business Bureau. Contact us today to learn about the electrician services we provide for EV owners.
