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Tesla Model 3 snags spot on list for government's $7,500 tax credit — here's how to cash in at purchase

"For the first time, the IRA allows consumers to reduce the up-front cost of a clean vehicle."

"For the first time, the IRA allows consumers to reduce the up-front cost of a clean vehicle."

Photo Credit: Getty Images

The attention received by electric vehicles has grown tremendously, with their benefits being officially recognized by the federal government in the form of tax breaks on purchases. 

With the historic Inflation Reduction Act (IRA) signed into law to make planet-friendly purchases and production cheaper and easier — allocating more than one-third of a trillion dollars — buyers of new EVs can receive up to a $7,500 tax credit, and used EV purchasers can get up to $4,000. Policy developments such as these have driven up accessibility and popularity with consumers. 

As Teslarati detailed, the Tesla Model 3 Long Range All-Wheel-Drive has made the list of vehicles that qualified for the $7,500 tax credit. This is the second Tesla Model 3 EV that has made the cut, with the first being the Model 3 Performance.  

The announcement comes within 2024's new "point of sale" approach implemented by the Internal Revenue Service, incentivizing qualifying IRA customers by immediately lowering the price of purchase. 

The U.S. Department of the Treasury and the IRS decided on the move after seeing that providing a tax credit on the following year's tax return was not as efficient. 

"For the first time, the IRA allows consumers to reduce the up-front cost of a clean vehicle, expanding consumer choices and helping car dealers expand their businesses," chief implementation officer for the IRA, Laurel Blatchford, said, per Teslarati. 

Dealership businesses have access to the IRS Energy Credits Online portal, allowing registered dealers to submit clean vehicle sales information to the IRS and quickly receive payment for transferred credits. Dealerships can also submit "time of sale" reports, confirming vehicles' eligibility for a credit, whether or not the buyer may choose to transfer the credit to the dealer. 

Tesla has continued to offer EV options that are affordable and easy to navigate, delivering the most well-known electric vehicles on the market today. Teslas run on electricity, which is cheaper than gasoline and produces no planet-warming pollution. EV drivers spend about 60% less on fuel than traditional vehicles. Due to the high demand for EVs, Teslas provide high resale value for consumers as well.

Tax credits such as those established within the IRA will make the switch to an EV an ideal way to reduce heat-trapping gases while being kinder to consumer budgets. 

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