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Electric vehicle tax credit update: These cars are eligible for a $7,500 credit in 2024

CHARLOTTE, N.C. — If you’re in the market for a new car and also want to make the most of any tax credits, you may want to consider an electric vehicle. 

The EV tax credit can save you up to $7,500 by purchasing a new electric vehicle. Here’s who qualifies for the tax credit, according to Money.com. 

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The EV tax credit is an incentive that applies to the purchase of many new fully electric vehicles and plug-in hybrids (those with a gasoline engine and a chargeable battery). The credit was established as part of the Inflation Reduction Act. It offers a maximum $7,500 credit for new EVs and $4,000 for used vehicles. 

EVs are still more expensive gas-powered cars, but this tax credit was designed to close the gap for customers considering electric models. 

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Here’s how the EV tax credit works. First, it decreases how much you owe in federal taxes for the year you buy the car. So if you owe more than $7,500 in taxes and qualify for the full credit, the credit takes $7,500 off your tax bill. Starting in January 2024, the IRS is giving EV buyers the option to instantly access the benefit upfront, regardless of their tax liability. 

New vehicles eligible for the $7,500 tax credit on or after Jan. 1, 2024:

  • 2022-2023 Chevrolet Bolt EUV with an MSRP limit of $55,000
  • 2022-2023 Chevrolet Bolt EV with an MSRP limit of $55,000
  • 2022-2024 Chrysler Pacifica PHEV with an MSRP limit of $80,000
  • 2022-2024 Ford F-150 Lightning (Extended Range Battery) with an MSRP limit of $80,000
  • 2022-2024 Ford F-150 Lightning (Standard Range Battery) with an MSRP limit of $80,000
  • 2023–2024 Tesla Model 3 Performance with an MSRP limit of $55,000
  • 2023–2024 Tesla Model X Long Range with an MSRP limit of $80,000
  • 2023–2024 Tesla Model Y All-Wheel Drive with an MSRP limit of $80,000
  • 2023–2024 Tesla Model Y Performance with an MSRP limit of $80,000
  • 2024 Tesla Model Y Rear-Wheel Drive with an MSRP limit of $80,000

New vehicles eligible for the partial $3,750 tax credit on or after Jan. 1, 2024:

  • 2022–2024 Ford Escape Plug-in Hybrid with an MSRP limit of $80,000
  • 2022–2024 Jeep Grand Cherokee PHEV 4xe with an MSRP limit of $80,000
  • 2022–2024 Jeep Wrangler PHEV 4xe with an MSRP limit of $80,000 
  • 2022–2024 Lincoln Corsair Grand Touring with an MSRP limit of $80,000 
  • 2023–2024 Rivian R1S Dual Large with an MSRP limit of $80,000
  • 2023–2024 Rivian R1S Quad Large with an MSRP limit of $80,000
  • 2023–2024 Rivian R1T Dual Large with an MSRP limit of $80,000
  • 2023–2024 Rivian R1T Dual Max with an MSRP limit of $80,000
  • 2023–2024 Rivian R1T Quad Large with an MSRP limit of $80,000

The tax credit is nonrefundable, which means if you owe less in taxes than the amount of the credit, you won’t get the unused portion nor can you carry the credit over to the next year’s tax return, according to H&R Block.

To qualify, your adjusted gross income (AGI) cannot exceed a certain threshold. For single filers, it’s $150,000, head of household filers is $225,00 and $300,000 for married couples. 

When you purchase an EV, you should file Form 8936, according to the IRS. This will allow you to claim the EV tax credit while filing your income tax return, assuming you don’t take advantage of the credit when you purchase the vehicle.

Contact Kia Murray at kmurray@wcnc.com and follow her on FacebookX and Instagram.

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