Are You Eligible for the Tax Credit for Electric Cars? Learn More HereMay 14, 2023
The US government offers a tax credit when buying new electric cars. The credit aims to help offset the higher cost of electric cars, and at the same time, encourage citizens to buy the cars, and as a result improve the environment. Electric cars have zero contributions to pollution or increase in greenhouse gases because they have zero emissions. Who is eligible for electric car tax break? Here are all the details.
First, what is the tax credit for electric cars?
Before we focus on who is eligible or not, it’s essential we discuss what is the tax credit for electric cars. This is a government incentive to help buyers of new electric cars buy the cars at reduced prices. Fully electric cars are highly expensive, and for the government to encourage people to buy these vehicles, they came up with this tax credit. However, there are set terms and conditions for a car to qualify for the tax break.
How much is the tax credit for electric vehicles?
This tax credit depends on the type, size and even design of the electric car you buy. However, the tax credit is between $2500 and $7500 per vehicle. The specific tax credit you can claim is determined by the battery capacity and the size of your vehicle. This tax credit can help ease your tax burden, and that is why you should learn how to claim it if you are eligible.
Are you eligible for the tax credit?
This tax credit is for buyers buying new electric vehicles from manufacturers who have sold less than 200,000 units. For instance, if you buy a Tesla, you will not be eligible to claim electric car tax credit because Tesla has already sold more than 200,000 units. Another key factor you need to know is that you should buy the car and use it within the US. Also, the battery of the electric car you buy must be able to store at least 4 KWH of energy, and be charged by an external source of energy.
In addition, the electric car tax deduction is not available to citizens who buy electric cars in order to resell them. It is strictly for buyers who buy to use the cars. Besides that, the tax credit is not for used cars. If you buy a used electric car, you will not be eligible for the tax credit for electric vehicles. Also, when you lease an electric car, don’t expect to get a tax break.
How to claim the electric car tax credit?
If your car qualifies for this tax credit, you can claim it when filing your tax returns. You will need to file Form 8936. You need to have details about your car such as car model, battery capacity, price and other details. But you can do it the smart way – online tax filling through tax software or programs. It’s easy, accurate, fast and most importantly, convenient. You just need to answer a few questions, provide some essential information, and it will be done! If you are eligible, you will get what you deserve just to ease your tax burden.