After announcing in late March that it had modified the conditions for the rebate program, the IRS updated its list of automobiles this morning that will be eligible for the full electric vehicle tax credit.
IRS updated its list of automobiles this morning that will be eligible for the full electric vehicle tax credit. (Photo: https://dpwcpas.com/)
IRS Updated The IRA And Detailed It’s Impact To Vehicles
The IRS updated the Inflation Reduction Act (IRA) guidance and detailed how this would change which vehicles would still be eligible for at least some of the $7,500 credit on March 31.
According to the news, updated terms, automakers must increase the proportion of a battery pack’s materials that are “extracted or processed in the United States, or in any country with which the United States has an active free trade agreement, or… recycled in North America is equal to or greater than the applicable percentage.”
Additionally, some battery component production or assembly will have to take place in North America.
Due to the fact that some vehicles, such as the Tesla Model 3 Rear-Wheel-Drive, are eligible for partial credits because their battery packs are made in China, each portion of the credit is worth $3,750.
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Vehicles That Are Eligible For The Complete $7,500 Tax Credit
- Cadillac
- 2023-2024 LYRIQ
- Chevrolet
- 2024 Blazer
- 2022-2023 Bolt
- 2022-2023 Bolt EUV
- 2024 Equinox
- 2024 Silverado
- Ford
- 2022-2023 F-150 Lightning (Extended Range Battery)
- 2022-2023 F-150 Lightning (Standard Range Battery)
- Tesla
- 2022-2023 Model 3 Performance
- 2022-2023 Model Y All-Wheel Drive
- 2022-2023 Model Y Long Range All-Wheel Drive
- 2022-2023 Model Y Performance
Vehicles That Are Eligible For The Complete $3,750 Tax Credit
- Ford
- 2022-2023 E-Transit
- 2022-2023 Mustang Mach-E (Extended Range Battery)
- 2022-2023 Mustang Mach-E (Standard Range Battery)
- Tesla
- 2022-2023 Model 3 Standard Range Rear Wheel Drive
Even if their vehicle satisfies the new IRS requirements, additional conditions may prevent some from being eligible for any credit at all.
The vehicle must be purchased for “your own use,” not for resale, even though the credits are open to both individuals and their businesses. Furthermore, it must be applied primarily in the US.
Additionally, there are income restrictions, which include a $300,000 joint filing threshold for married couples, a $225,000 threshold for heads of households, and a $150,000 threshold for everyone else. To be eligible for the credit, your modified adjusted gross income must be below those thresholds.
Only vans, SUVs, and pickup trucks that are under $80,000 MSRP qualify; the maximum price for all other cars is $55,000.
