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2024 Changes to Electric Car Tax Credit: What Buyers Need to Navigate

Photo: Geoff Robins/AFP via Getty Images

Prospective owners of electric cars have mixed news about the federal tax credit as 2024 draws near. Although the Biden administration wants to see an increase in the use of electric vehicles, modifications to the qualifying requirements might affect whether the full $7,500 credit is available. For customers, navigating these changes becomes essential.

Photo: Justin Sullivan/Getty Images

Navigating the Electric Vehicle Tax Credit Landscape

In 2024, electric vehicle buyers can expect a revamped tax credit system, offering an instant rebate starting January. This eases the process, allowing buyers to enjoy the credit right at the point of purchase through a dealership.

Despite the simplification, buyers must adhere to income caps, verifying they fall below thresholds. Confusion may arise, as income calculations involve various factors. The criteria remain essential, ensuring the credit benefits those truly in need.

Government-imposed requirements will tighten in 2024, potentially reducing the number of electric vehicle models qualifying for the tax credit. Some popular models, like Tesla’s Model 3, might lose eligibility after December 31, posing a challenge for buyers.

READ ALSO: Social Security Benefits: Here Are The Expenses You Should Avoid Before Your Retirement

Leasing as a Viable Option

Leasing an electric vehicle emerges as a viable alternative, sidestepping some eligibility restrictions. Unlike direct buyers, lessees face no income caps or stringent sourcing requirements, providing flexibility in vehicle choices.

Those considering used electric vehicles also find a tax credit opportunity, offering 30% of the sales price, up to $4,000. With lower income and price caps, this becomes an appealing avenue for budget-conscious buyers.

READ ALSO: Wages Go Up, Local Workers Feel The Change

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