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The deposit of your taxes is a notorious trail - or, at the very least, a boring way of spending an afternoon. The task requires compiling your documents, lugging it to your accountant (or seizing it manually in a Site like Turbotax ), and, in some cases, send serious money to IRS. This is not the idea of a good time, but if you know what you are doing, you can minimize what you need. Enter: EV tax credit. If you are eligible for electric vehicle tax credit, which has existed since 2008 and which has been revised in 2022, you could save thousands of people on this year's taxes.

Continue to read to learn all that accountants and finance professionals want you to know credit, including what the electric vehicle vehicle tax credit is, which qualifies for that and how much it is . If you have bought an electric vehicle recently -or plan you in the future -it could revise your balance sheets significantly.

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What is the EV tax credit?

The objective of the EV tax credit is to obtain more electric vehicles on the road.

"It is a financial incentive, at the federal level, to buy a completely electric or partially electric vehicle," explains Kyle Leutters , certified financial planner and advisor to Monsta . "Some states also offer additional tax credit in addition to federal credit."

Credit, found in Section 30D of the internal income code , can be worth up to $ 7,500. However, you will not receive a refund if the amount of the credit provides your balance due to the IRS below zero. (So, no, you cannot earn money on this credit; you just have to do less.)

EV credit has existed for more than a decade, but recent changes now promote cars made in North America and also allow buyers of used electric vehicles to take advantage of the credit.

Updates also have an impact when you receive your money. Until the end of 2023, you will get the money when you have tabled your taxes; From 2024, you can get the credit at the time of the sale (to make the purchase a pill easier to swallow) Or When you put your taxes, you prefer.

Who is eligible for the tax credit in 2024 EV?

All those who buy an electric vehicle are not eligible for the tax credit of 2024 electric vehicles. To cut, you must have placed your electric vehicle in service in 2023 or after. (According to leutters, it's a sophisticated way of saying: "You started using the car.") You must buy the car for personal use, as opposed to resale, and you must use it mainly in the USA

There are also income requirements: your changed gross income (AG) cannot exceed $ 300,000 for married couples who table their taxes together or a surviving spouse, $ 225,000 for managers, or $ 150,000 for everyone. You can use your Modified AGA from the year you bought the car or the previous year. (One year must meet the income requirement.)

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What vehicles qualify for the EV tax credit?

Some factors come into play here, and your automotive dealer should be able to make sure that you choose the requirements.

For 2024, the car must have a battery capacity of at least 7 kilowatt hours, a gross vehicle weight note of less than 14,000 pounds, be manufactured by a qualified manufacturer, undergo a final assembly in North America and meet the mineral and critical battery requirements of components.

The vehicle must also be new, and its retail price reduced by the manufacturer (PDSF) cannot exceed $ 80,000 for Vans, public sports service vehicles and vans, or $ 55,000 for other cars .

All these information bits should be available on the car window sticker. You can also find information on each car, including if it is eligible or not to credit - at this link .

How much money is worth the EV tax credit?

It depends on several factors, especially when you put the car in service. If you did it from January 1 to April 17, 2023, you get a base amount of $ 2,500, plus $ 417 for a vehicle with at least 7 kilowatt hours of battery capacity and additional $ 417 for each kilowatt time of capacity of battery beyond 5 kilowatt hours. The highest amount is $ 7,500 in total.

If you put the car in service after April 18, 2023, it's a little different. "You get $ 3,750 if the vehicle meets only the requirements of critical minerals, $ 3,750 if the vehicle meets only the requirements of battery components and $ 7,500 if the vehicle meets both," said Leutters.

"To meet the requirements of critical minerals, a certain percentage of critical minerals in the battery of an eligible EV had to be extracted or treated in the United States, extracted or treated in a country with which the United States has a free trade Agreement , or recycled in North America, "writes the IRS.

To meet the battery component needs, a certain percentage of the Battery components value Must be manufactured or assembled in North America. In 2023, this percentage is 50, for 2024, it is 60 and for 2025, it is 70. The percentage increases each year by 10% until it reaches 100 in 2029.

How to obtain a tax credit for your installation of an EV charger and charger EV

Tax credits do not end with the car. "There is also a federal tax credit available for the cost of installing the load equipment in your main residence," explains Leutters. "This credit generally represents 30% of costs, up to $ 1,000." As a supporting documentation, when you put your taxes, you will need a receipt for equipment and for the workforce to install it. AE0FCC31AE342FD3A1346EBB1F342FCB

However, the letters indicate that you may not want to drop all this by yourself. "As there are nuances to this credit, please consult a local tax," he advises. They will be able to make sure you have everything you need to harvest as many rewards as possible.

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How to obtain a tax credit for a used electric vehicle

This credit entered into force in 2023, and the glowing says that it is often overlooked. The income requirements are lower ($ 150,000 for married people who deposit jointly or a surviving spouse, $ 112,500 for household chiefs and $ 75,000 for other declarants), but the process is similar to that of new electric vehicles . You will need to make sure you and the car you have chosen are eligible for credit.

How to properly claim your EV tax credit

It starts the day you buy the car. "At the time of sale, the seller must provide you with information on your vehicle and also record the online sale to report the same information at IRS," said Moira Corcoran , CPA, tax expert for Just answer . "If they do not report online, your vehicle will not be eligible."

From 2024, Buyers can transfer The tax credit to their automotive dealer to reduce the initial cost of their new or used electric vehicle. Or, you can claim the tax credit when you table your taxes with Form 8936 .

Save now or save later - it's your choice!