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Tax Credits For EV Owners
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A major way that the government tries to encourage certain choices and actions is by offering tax credits. They do this as well with EVs, by offering income tax credits to people who buy these cars. In this way, the government is partly subsidizing the purchase of EVs, to provide an incentive for consumers to own and drive them.
A major way that the government tries to encourage certain choices and actions is by offering tax credits. They do this as well with EVs, by offering income tax credits to people who buy these cars. In this way, the government is partly subsidizing the purchase of EVs, to provide an incentive for consumers to own and drive them.
Electric Vehicles (EV)
EVs are primarily of two categories, fully electric or plug-in hybrids. The hybrids use an engine that can be powered by gasoline and by a rechargeable electric battery. The government tax credits and other financial incentives are targeting passenger cars, therefore most other types of EVs – like motorcycles and scooters, are not eligible.
How Much Is the Tax Credit?
The EV tax credit incentive is a federal government program, administered by the IRS. The tax credit is a maximum of $7,500, depending on the specific vehicle. Even if your EV is eligible for the $7,500 – that does not mean you will actually realize this in money. This tax credit can only be applied up to the amount of income tax you owe for the year you bought the car. If, for example, you owe $6,000 in taxes, then you will only receive a $6,000 credit – you will not receive payment for the remaining $1,500. Also, the credit is not able to be carried over to the following year.
The maximum tax credit varies per each eligible EV, with fully electric cars almost all eligible for the maximum and only some of the hybrids. For example, a Toyota Prius is eligible for up to $4,500 and a Toyota RAV4 for up to the maximum of $7,500.
Requirements and Restrictions
– You must be the first buyer (if you lease, you are not eligible)
– The vehicle must have battery packs that are rated at least 4 kWh of energy storage and are can be recharged from an external source
– The car must be built by a qualified manufacturer
– You must be a legitimate owner/user, not a dealer or broker.
– The program is subject to cancellation and modification by the government.
– The IRS has the final say-so about the eligibility of each and any tax credit claim.
Other Financial Incentives
Many state governments have their own financial incentive programs for EV purchases, so you should check where you live. For example, California offers actual cash rebates on the purchase and leasing of EVs. These rebates are $2,000 for a fully electric vehicle and $1,000 for a hybrid – these are in addition to any available tax credit.
What Are The Cheapest Electric Cars?
Some of the most affordable ones include:
– Cheapest electric cars
– Fiat 500 Electric.
– Nissan Leaf.
– MINI Electric.
– MG ZS EV.
– Peugeot e-208.
– Renault Zoe.
– Hyundai Kona Electric.
– Honda e
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