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Check The Modification Of EV Tax Credit In 2024

EV Tax Credit
EV Tax Credit; Source- NACS

The $7,500 tax credit for the first electric cars will be easier for consumers to get in 2024, but there might be some obstacles for individuals. The concurrent application of federal policies is to blame for this. A noteworthy modification is that automobile dealers will have the ability to give purchasers the EV tax credit at the time of sale, in the form of cash, a price reduction, or a down payment.

EV Tax Credit

EV Tax Credit; Source- USA TODAY

Claim For EV Tax Credit

To enjoy the benefits under the current system, customers must wait to file their annual tax return. In essence, customers would give the auto dealer their federal tax credit, and the company would then pass the tax benefit forward to customers. With corresponding credits of up to $7,500 or $4,000, this new system will apply to both new and used EVs. Moreover, customers will benefit from the tax relief under the new approach, irrespective of their overall tax liability.

Eligibility For EV Tax Credit

Because the tax credit is currently nonrefundable, purchasers can only be eligible if they owe federal taxes. However, the Inflation Reduction Act, which was signed by President Joe Biden, may make some EVs ineligible in 2024, thus customers hoping to take advantage of the tax credit may run into difficulties. To strengthen domestic EV supply chains, the act establishes manufacturing criteria. While automakers seek to comply with the regulations, this may temporarily prevent some EVs from being qualified for the tax credit.

If customers are looking for a point-of-sale discount, they should be aware of a few restrictions. Buyers must submit a return of income taxes for the year in which they shift their EV tax credit to a dealer, and not all dealers are eligible to participate. It’s also necessary to take into account eligibility restrictions depending on household income and different regulations for new and used EVs. In conclusion, even though the new regulations seek to facilitate the EV tax credit claim process for consumers, issues with vehicle availability and qualifying requirements can surface in 2024.

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