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Up To $40,000 Electric Vehicle Tax Credit For New Vehicles— See Who Qualifies

Electric Vehicle Tax Credit [Photo: Palmetto Solar]
Electric Vehicle Tax Credit [Photo: Palmetto Solar]

Up to $40,000 in Electric Vehicle Tax Credit can be claimed when new vehicles are purchased. Read and find out in this article who qualifies for the tax credits!

Electric Vehicle Tax Credit [Photo: Texas Breaking News]

Electric Vehicle Tax Credit [Photo: Texas Breaking News]

The Internal Revenue Code (IRC) 45W states that businesses and taxes-exempt organizations that purchase new vehicles may qualify for an Electric Vehicle Tax Credit of up to $40,000. An article on the U.S. Department of Energy website states that the amount of the tax credits equals to whichever is the lowest among the three options. 

The options include 15% of the basis of the vehicle (30% if the vehicle is not fueled by diesel or gas), the incremental cost of the vehicle, or up to $7,500 in tax credits for vehicles with gross vehicle weight ratings (GVWRs) of less than 14,000 pounds and up to $40,000 in tax credits for all other vehicles.

READ ALSO: Race Against Time: Electric Vehicle Buyers Urged To Claim Tax Break Before New Eligibility Rules Take Effect

Who is qualified for the tax credits?

According to the IRS, those who qualify for the Electric Vehicle Tax Credit are businesses and taxes-exempt organizations. There is no limit on the amount of tax credits the businesses and taxes-exempt organizations can claim. For businesses, the tax credits are not refundable. This means that the Electric Vehicle Tax Credit cannot be more than the liabilities owed. A 45W tax credit can be carried over as a general business credits.

READ ALSO: Get A Deal On Your Next Electric Or Hybrid Vehicle In Rhode Island With DRIVE EV Rebates

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