How to get $7,500 Instant EV Car Tax Credit from 2024?

You read it correctly! Buying an electric car in 2024. can indeed provide the federal EV car tax credit for electric vehicles as a discount of the $7,500 credit directly from the dealer. This is part of huge effort of Biden government to popularise solar energy and non fossil fuel alternatives .So, here are 7 points you must note for this instant clean energy vehicle credit.

1. Instant Credits at the Time of Purchase.

If the car is eligible for this credit, you’re also eligible for a $7,500 credit. In that case, the dealer will complete the documentation, provide instant credits, and only charge the purchase amount. The dealer will file the form and claim $7,500 from the IRS.

2. Who is Eligible for Instant Rebate in 2024? 

You are eligible for clean vehicle credit only if :

1. Customers must buy it for their use, not for resale
2. Use the vehicle primarily in the U.S.
3. Your “modified adjusted gross income” in year 2024 is not more than :

• $300,000 for married couples filing jointly
• $225,000 for heads of households
• $150,000 for all other filers

You can claim the discount or credit even based on the previous year, 2023 , if the MAGI is less than the cap above. But remember, MAGI should not be crossing in 2024.

3. What if Your Income Crosses the Limit in 2024?

If you met the income cap requirement at the time of purchase, but subsequently, your earnings went up during the year to the extent that you crossed over the cap in 2024, then you must pay back that $7,500 to the IRS when you file your 2024 taxes.

4. Fewer EV Models Qualify in 2024

The requirements imposed by the government get stricter for eligible vehicles. The $7,500 tax credit is comprised of two separate credits, each worth $3,750. Vehicles can qualify for both, one or neither.

Fully electric vehicles and plug-in hybrid vehicles can both qualify for the tax credit; they must meet these two requirements:

• Be assembled in North America
• Have a sticker price (MSRP) of less than $55,000 for cars and $80,000 for SUVs and trucks
• vehicle batteries must fulfil the materials sourcing requirements.

As a buyer, you do not have to be bothered because the car dealer will ascertain if the vehicle they sell satisfies the clean vehicle tax credit requirements.

5. How do you check if a vehicle is eligible for $7500?

The car manufacturer’s website may tell you about the eligibility of the car or vehicle’s eligibility. From a report, only ten cars are eligible for full credit $7,500 credits are :

1. Chevrolet Bolt EV – $26,500
2. Chevrolet Equinox EV – $48,995
3. Ford F-150 Lightning – $49,995
4. Tesla Model 3 Performance – $50,990
5. Chevrolet Silverado – $51,895
6. Tesla Model Y Performance – $52,490
7. Chrysler Pacifica PHEV – $53,425
8. Chevrolet Blazer EV – $60,215
9. Cadillac LYRIQ – $58,590
10. Tesla Model X – $79,990

You can visit the website. fueleconomy.gov for a list of eligible vehicles

6. It no longer matters how much you owe in taxes

You don’t need any tax liability to claim this clean energy vehicle credit because these are now being given as discounts at the time of purchase. The dealer must be convinced about your qualifications. This EV car tax credit is going to help middle-class families a lot.

7. May Get Good Discount on Leasing a Car too !

If you want to lease a vehicle, the credit goes to the company leasing out the car — not you. The leasing companies are also not required to pass the savings on to consumers. However, many leasing companies may offer discounts based on their tax credits as a marketing exercise. Since you are not getting the tax credit directly, you have no restrictions like maximum AGI.

8. Credit for buying a used Electric Vehicle

There is good news if you want to buy a used electric vehicle. You can also get EV car tax credit of 30% of the vehicle sales price, max $4,000, for second-hand EV cars. The certain limitations, effective 2024, are :

1. EV Model year should be 2022 or earlier
2. Adjusted Gross Income cap is fixed at $75,000 for a single person and $150,000 for a household.
3. Vehicles must cost less than $25,000.

9. Hefty EV Car Tax Credit for a Business Use

A business person can claim credit for buying EV vehicles for their business as follows:

1. Up to $7,500 for a light vehicle and 
2. Up to $40,000 for a larger vehicle, like a delivery truck.

There are far fewer restrictions on the commercial tax credit, and the EV credit amount depends on the EV vehicle’s purchase price.