The Tax Credits And Rebates That Come With Buying An EV

The IRS explains that the federal tax applies to any vehicle purchased after December 31, 2009. The base for the credit is $2,500, but for every 5kWh the battery of the vehicle has, an additional amount is paid. New EV models, given their battery size and capacity, usually qualify for the full maximum of $7,500. Kelley Blue Book adds that the $7,500 in credit is not an instant benefit; rather, it is a credit that buyers can only use in the same year of purchase when they file their taxes to obtain tax discounts of up to $7,500. The credit only applies to new vehicles and not used cars. Leased vehicles do not apply. The vehicle needs to be used inside the country, must be bought for personal use, and not be intended for resale.

Additionally, every state offers state-level tax incentives, rebates, or benefits, including domestic charging discounts, free parking, and EV charging benefits. A state-by-state map offered by the U.S. Department of Energy reveals that California leads with 135 different laws and incentives. The Clean Vehicle Rebate Project of California allows those who buy or lease an EV to get $1,000 to $7,000 in savings. Tesla, due to price increases, is not eligible for this rebate. Those buying an EV should take advice from professional tax accountants regarding federal incentives, and search for the best benefits available in their state through official channels.