I recently received a question at USTaxAid about Electric Vehicle (EV) tax credits. Many of the rules are changing in 2023, so it’s bound to get confusing. First, here is the question:
Will I get a tax credit on a new 2022 Chevy Bolt EV I bought in September 2022, when I fill out my tax return in 2023?
But let’s look at this in a little more detail. The tax return you file in 2023 will be your 2022 tax return. It will follow US law for 2022. The new EV tax credits, as part of the Inflation Recovery Act of 2022 had some phase-in credits. For the most part, though, 2022 law applied to 2022 purchases and 2023 law will apply to 2023 purchases.
In this case, you need to use the 2022 law currently in place. GM reached the 200,000 vehicle cap way back in 2019. That means no EV tax credit for applicable GM 2022 EV vehicles.
In 2023, the vehicles will again be eligible for the credit if they otherwise qualify. There may still be a question as to whether they receive the full $7,500 tax credit due to the battery sourcing requirements that start in 2023.
In the case of the community member, though, a 2022 vehicle bought and received in 2022 is under 2022 law. And for 2022, applicable GM vehicles do not get an EV credit.
How is your year-end tax planning going? We spent the last few Wednesday Coaching sessions in 2022 talking about year-end planning for real estate investors, business owners, and investors. If you’re not yet a member, you can join anytime at Wednesday Coaching and