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Published date: January 10, 2024

2024 EV Tax Credit Changes: What You Need to Know

2024 EV Tax Credit Changes: What You Need to Know

The Internal Revenue Service (IRS) has made updates to electric vehicle (EV) tax credits in 2024, bringing both good and challenging news for potential buyers. Here's our comprehensive guide to help you understand the changes and how they might impact your EV purchase.

2024 EV Tax Credit Changes: What You Need to Know
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While the new IRS rules for electric vehicle tax credits have introduced some challenges, there's also a silver lining for prospective EV buyers. These changes, which came into effect at the start of 2024, have altered the landscape of electric vehicle incentives, impacting eligibility and credit amounts for various models. While it's true that some vehicles no longer qualify for the full $7,500 tax credit, there's still a multitude of electric and plug-in hybrid options that can help you save on your purchase. Additionally, one significant change makes the tax credit more accessible than ever – it can now be applied at the time of purchase, eliminating the need to wait for tax season. Leasing an EV allows you to enjoy the tax credit benefits, even for vehicles that wouldn't usually qualify.

The Good News:

  1. Immediate Tax Credits: Starting from January 1, 2024, eligible individuals can receive their tax credits at the point of sale when buying a new EV. No more waiting until tax filing season!
  2. Lease Benefits: If you choose to lease an EV instead of purchasing one, you can still enjoy the tax credit benefits, even if the vehicle wouldn't typically qualify for the credit.
  3. State and Local Incentives: Many states and municipalities offer their incentives for EVs and home EV charger installations, and these IRS changes don't affect those incentives.

The Not-So-Good News:

  1. Reduced Eligibility: Fewer vehicles are now eligible for federal tax credits, and even fewer qualify for the maximum $7,500 credit.
  2. Parts Origin Requirement: The eligibility of an EV for the tax credit depends on where its parts, especially batteries and battery components, were manufactured. If these parts were made in China, the tax credit is either reduced or eliminated.
  3. Changing Eligibility: Automakers may alter their parts supply chains and submit applications to meet the new requirements, potentially changing which vehicles qualify for tax credits.

Specific Models: Some vehicles that were once eligible for tax credits may now be ineligible, while others that previously didn't qualify could become eligible due to automakers adapting to new regulations. It's essential to check the IRS website or the specific manufacturer for up-to-date information on eligible models.

The Impact of Placement into Service: The timing of when a vehicle is "placed into service" determines which tax credit rules apply. Even if you signed the purchase paperwork in 2023 but won't receive the vehicle until 2024, the 2024 tax rules will apply. Conversely, if you took delivery of the vehicle in 2023, the rules in force then would still apply.

Leasing Advantages: Leasing an EV can be a smart choice due to the rapidly evolving EV technology. It can also lower your monthly payments, making EV ownership more accessible, especially in a high-interest rate market.

Which EVs and plug-in hybrids (PHEVs) qualify for the tax credit?

If you're curious about which electric vehicles and plug-in hybrids are eligible for these tax credits, you're in luck. We've compiled a comprehensive table listing the models of electric vehicles that qualify for the tax credit and the respective amounts you can potentially save. Whether you're considering a fully electric vehicle or a Plug-In Hybrid Electric Vehicle (PHEV), this resource will help you navigate the available options and their associated tax credit benefits.

EV and PHEV Tax Credits 2024

It's essential to be well-informed when making your EV purchasing decisions, and knowing which models are eligible for tax credits can significantly impact your savings. So, if you're in the market for an electric vehicle, make sure to check out our detailed table to see which options align with your preferences and budget.

Where can I find EVs eligible for the tax credits?

Check out our EV listings platform to find the electric models located near you that qualify for tax credits.

In summary, while the 2024 EV tax credit changes introduce some challenges, they still offer significant incentives for potential EV buyers. Stay informed about the latest updates to make the most of these credits when purchasing or leasing your next electric vehicle.

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© 2022 Lectrium. All Rights Reservered.