New Rules (2022 & Beyond) For Electric Vehicle (EV) Tax Credits | USTaxAid

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New Rules (2022 & Beyond) For Electric Vehicle (EV) Tax Credits

Written by Diane Kennedy, CPA on August 29, 2022

Have you been dreaming of a new electric vehicle (EV) and cannot wait to get the tax credits?  If so, you won’t want to miss this blog. The Inflation Reduction Act of 2022 has new rules, but the timeline for when they go into effect is confusing.

 

Some of the old rules will still be in place until the IRS pushes the button. And in some cases, you might have a choice between old law and new law.

Act wisely! You could blow a tax credit too easily right now because the new Inflation Reduction Act of 2022 is now law and it has some big changes for EV tax credits.

 

What Vehicles Qualify for EV Tax Credit

One of the big changes has to do with which vehicle will qualify due to where they are assembled. The Dept of Energy released a list of vehicles with final assembly in North America. These may qualify but a new restriction also requires the MSRP (manufacturer’s suggested retail price) be under $55,000 for cars and $80,000 for trucks.

 

Do not panic yet, though. Keep reading for when these new rules go into effect.

 

This list was released just after the IRA of 2022 became law. It will undoubtedly be updated as time goes on.

As manufacturers sell EVs, the 200K unit cap will come into play and just because a vehicle is on the list now it may not still be available for tax credit  this year because of the cap.

 

 

Model YearVehicleNote
2022Audi Q5PHEV model only
2022BMW 3-series Plug-in330e
2022BMW X5xDrive45e
2022Chevrolet Bolt EUVManufacturer sales cap met
2022Chevrolet Bolt EVManufacturer sales cap met
2022Chrysler Pacifica PHEVPacifica Hybrid (PHEV) only
2022Ford Escape PHEVPHEV model only
2022Ford F SeriesF-150 Lightning only
2022Ford Mustang MACH E
2022Ford Transit VanE-Transit only
2022GMC Hummer PickupManufacturer sales cap met
2022GMC Hummer SUVManufacturer sales cap met
2022Jeep Grand Cherokee PHEVPHEV model only
2022Jeep Wrangler PHEV4xe (PHEV) only
2022Lincoln Aviator PHEVPlug-In Hybrid model only
2022Lincoln Corsair Plug-inPlug-In Hybrid model only
2022Lucid AirReserve here
2022Nissan Leaf
2022Rivian EDVFleet-only
2022Rivian R1SReserve here
2022Rivian R1TReserve here
2022Tesla Model 3Manufacturer sales cap met
2022Tesla Model SManufacturer sales cap met
2022Tesla Model XManufacturer sales cap met
2022Tesla Model YManufacturer sales cap met
2022Volvo S60T8 Recharge (PHEV) only
2023BMW 3-series Plug-In330e
2023Bolt EVManufacturer sales cap met
2023Cadillac LyriqManufacturer sales cap met
2023Mercedes EQS
2023Nissan Leaf

 

This list WILL change as manufacturers move to become compliant, the IRS issues regulations and sales hit the caps.

Act on This Fast

The $55K (cars) and $80K (trucks) MSRP caps goes into place as soon as the IRS issues guidance. So right now, there is still a window to buy a vehicle for the credit even though it is over the limit.

If you were in contract prior to the law, you can use the old law to get the EV credit if you are buying a vehicle with outside the US assembly.

 

The new IRA of 2022 bill also allows for an EV tax credit upfront, but we do not have guidance on that either. In 2023, there will also be a $4,000 tax credit available for used EVs that are purchased.

My Disclaimer

Last time I wrote about a suggested changed for EV tax credit, I got hate mail. I have never seen any other subject get people so ramped up.

So, here is my disclaimer. This is brand new law. We must get the IRS’s guidance before we know exactly how it will work. Manufacturers will likely be moving assembly plants so they qualify.

The list here, today, August 2022, is probably very different from what the list will be in mid-2023.

 

Stay tuned to our Tax Updates as the new rules roll out.

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