What is the Inflation Reduction Act?

The Inflation Reduction Act was recently passed by the U.S. to incentivize and promote clean energy. The Act aims to invest $369 billion over 10 years into clean energy programs. Within the Act are a number of incentives and programs for electric vehicles, including the Section 30D Clean Vehicle Credit and the Section 30C Federal Alternative Fuel Infrastructure Tax Credit. Let’s take a closer look at these to see how they relate to you.

What is the Clean Vehicle Credit? How do I know if I am eligible for the EV tax credit?

The Clean Vehicle Credit is a tax break to incentivize individuals and businesses to invest in electric vehicles. For new electric vehicles, consumers will be eligible to receive up to $7,500 in credit. For used electric vehicles, consumers will be eligible for up to $4,000 in credit or 30% of the vehicle cost. However, like all governmental subsidies, there are some criteria you need to meet in order to qualify. Here is what needs to be true to qualify:

New EVs

• The EV battery must be manufactured in North America with minerals mined or recycled from the continent
• Your income must be $150,000 or less (if a single filer) or $300,000 or less (if a joint filer)
• The Manufacturer Set Retail Price (MSRP) must be $80,000 or less for SUVs, vans and pick-up trucks or $55,000 or less for other vehicles

Used EVs

• The “made in North America” requirement does not apply
• Your income must be $75,000 or less (if a single filer) or $150,000 or less (if a joint filer)
• Maximum MSRP must be $25,000

What about EV Charging? Is there any tax credit for EV charging?

We’re glad you asked. The Federal Alternative Fuel Infrastructure Tax Credit provides an EV driver $1,000 of credit or 30% of the EV charging installation cost (whichever is of lesser value) for individuals who purchase residential fuel equipment before December 31, 2032. This means, if you plan to install a Level 2 EV charger in your home, you could be eligible for $1,000 of credit for this installation.