The Inflation Reduction Act of 2022, or IRA, is the most ambitious climate legislation in U.S. history and aims to make electric vehicles a little more attainable — or at least that’s the hope in the long run.
The bill, signed into law by President Biden on Aug. 16, has allocated over $369 million dollars for climate action, with a portion of the budget dedicated to enhancing tax credits for electric vehicle purchases.
These expansions have the potential to save Americans who claim the credit up to $950 per year, according to the White House. But understanding these new changes can also be fairly daunting — new manufacturing guidelines, income thresholds and pricing caps abound.
Here’s what you need to know about the federal tax incentives for electric vehicles and a summary of changes to the credit courtesy of the IRA.
What is the electric vehicle tax credit?
The electric vehicle tax credit, or the EV credit, is a nonrefundable tax credit the IRS offers taxpayers who purchase…
This article was written by Sabrina Parys and originally published on www.nerdwallet.com