Electric Vehicle Tax Credit

Electric Vehicle Tax Credit

The Electric Vehicle Tax Credit is a tax incentive provided by the federal government to encourage the purchase of electric vehicles (EVs). This credit allows eligible taxpayers to reduce their federal income tax liability by a specified amount, which can vary based on the vehicle’s make, model, and battery capacity.

In general, the credit can be up to $7,500 for qualifying electric vehicles, with the exact amount determined by the vehicle’s specifications and the manufacturer’s production levels. The credit phases out once a manufacturer sells 200,000 qualified vehicles.

For example, if an individual purchases a qualifying electric vehicle for $35,000 and is eligible for the maximum credit of $7,500, they can reduce their tax liability by that amount, effectively lowering the cost of the vehicle.