$7500 EV Tax credit, Making The Most Of It

Electronic vehicles are relatively new. Its manufacturers, sellers, and car insurers are still learning how EV works compared to their gas-powered relatives. One thing is an advantage if you’re an EV user. You can claim the $7500 EV tax credit without waiting for the tax season.

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Income and car requirements to qualify for $7500 EV tax credit

Not all EV cars used on U.S. roads can qualify for the $7500 EV tax credit because the Department of Energy has specific requirements about the car’s specifications and manufacturing. The Ascent recommended checking which EV cars could qualify through the Fuel Economy website. You can also put the Vehicle Identification Number (VIN) into the Department of Transportation website to check if your car is eligible.

When it comes to income, you must meet the IRS’ set threshold, but you can use this year or the previous year, whichever qualifies. Also, depending on your circumstances, you may opt for leasing an EV rather than owning one because the income restriction won’t apply in claiming the EV tax credit.

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The EV tax credit is non-refundable

Refundable tax credits can give back your money, but this is not the case for EV tax credits. This means that if you owe $6500 in tax and you’re eligible for $7500 EV tax credits, you cannot get the remaining $1000 back, according to The Ascent.

However, you can immediately use the $7500 EV tax credit upon purchasing it. According to the changes made by the IRS in October 2023, nobody comes back and asks you for the difference in case your tax bill doesn’t reach $7500.

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