One major aspect of the 2022 Inflation Reduction Act was a tax credit intended to incentivize American consumers to purchase electric vehicles instead of polluting gas-powered cars. However, the specifics of the tax credit and how it is applied have undergone so many changes that it has been difficult to track which types of purchases qualify.
The latest change to the EV tax credit went into effect on January 1, 2024, and will make things easier for car buyers. Electrek reported that as of January 1, the credit — up to $7,500 for new EVs and up to $4,000 for used EVs — can be applied at the point of purchase rather than making buyers file a claim with their tax return.
More than 7,000 car dealers have already signed up with the IRS to ensure that they can offer the point-of-sale rebate to buyers.
Electrek described the rule change as streamlining the process, writing, “On paper, at least, EV buyers pay a reduced fee upfront while the dealer handles the paperwork with the IRS, and then the EV buyer happily gets behind the wheel and drives away.”
However, while this change certainly could make things easier for buyers of EVs, there is still a lot of uncertainty around the rebate, especially as certain vehicles that qualified in 2023 will no longer qualify in 2024. Tesla recently warned customers that some of its models would no longer qualify for the EV tax rebate due to regulations around its battery components being manufactured abroad.
Rule changes from the Biden administration have signaled that the government is more interested in using the tax rebate to force companies to manufacture EVs domestically than to actually save American consumers money.
The comments under Electrek’s post revealed that, even among EV enthusiasts, there is still widespread confusion around the rules and how they will be applied.
“But isn’t there income requirements for these tax breaks? Is the dealer going to check a customers tax paperwork?” asked one commenter. “Sounds like another shady way for dealers/sales people to screw over customers.”
“So what happens if some slick dealer gets you the credit while you don’t really qualify?” asked another. “Tax time the IRS comes calling? How about we just give a straight 7500 dollar subsidy to anything that buys an EV? Your cat buys an EV, she gets 7500, your fish buys an EV 7500 for him too!”
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