WASHINGTON, DC (DC News Now) — As more car manufacturers make electric vehicles, American consumers can cash in on tax credits for “green” vehicles for another decade.
The Inflation Reduction Act extended a tax credit — up to $7,500 — through 2032 for people who buy new electric vehicles; however, consumers may consider speeding up plans to buy a new EV, given upcoming guidance from the IRS that requires manufacturers to implement certain things in order for their vehicles to be eligible for the program.
The IRS reportedly is slated to implement the new requirements in March, but the 40 “green” vehicles already included in the tax credit program are fair game for consumers to purchase and receive the credit.
Examples of the booming electric vehicle industry was on full display at the Washington Auto Show, where DC News Now asked consumers about their own buying strategies to stretch their dollar.
Jason Makel of Maryland said he attended the show to “find out what’s the latest and greatest electrics.”
“I usually go at the end of the month when they [sales representatives] make their quota…” “…they usually want to sell a certain amount of vehicles at the end of the month,” said Miguel Butler of Maryland.
Among the latest EVs that qualify are the Mustang Mach-E, Volvo’s XC40 Recharge and the Chevy Bolt, according to the IRS.
Consumers who bought electric vehicles since 2010 when they were newly on the market still can take advantage of the tax credit; however no more than 2000,000 of the qualifying models can have been sold in the US.
Electric vehicles that may qualify for the tax credit initially offered from 2010 through 2022 include the Hyundai Sonata Plug-in Hybrid, the Nissan Leaf and the Subaru Crosstrek Hybrid.
Dawne Proctor, another attendee at the Washington Auto Show, said internet research is the first way she reviews deals when car buying.
“Google…way before I go to the dealership,” Proctor said.
Online research is key for consumers seeking a tax credit up to $7,500 because of varying requirements based on income, and pre-approved credit amounts by the IRS.
Qualifying vehicles must be made in North America and purchased for consumers’ own use, and not for resale. Income requirements depend on tax filing status: Eligible married couples who file jointly cannot exceed $300,000 in annual adjusted gross income (AGI), according to the IRS.
A $225,000 AGI is the cap for heads of households, and a $150,000 AGI applies to all other filers.
Once consumers purchase a vehicle qualified for the tax credit, they should complete Form 8936 when filing taxes. The filing deadline in 2023 is April 18.
Once the car is off the sales lot, and a consumer is behind the wheel, it’s time to search for plug-in stations. The U.S. Department of Energy maps where charging stations are located.
Jamie Darvish, chairman of the Washington Auto Show said, “when you buy a vehicle that plugs in, there’s a network that works right on your smartphone, and it helps you identify exactly where chargers are, and not only where they are, if they are available as well.”