EV Tax Credit: Rules and Qualifications for Clean Vehicle Purchases

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…

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This article was written by Sabrina Parys and originally published on www.nerdwallet.com