US Tax Credit Scheme for Electric Vehicles

In News

• Starting January 1, many Americans will qualify for a tax credit of up to $7,500 for buying an electric vehicle (EV).

About Tax Credit Scheme

• About:
  • A credit of up to $7,500 will be offered to people who buy certain new electric vehicles as well as some plug-in gas-electric hybrids and hydrogen fuel cell vehicles. 
  • The new tax credit will last until 2032.
  • It is a part of changes enacted in the Inflation Reduction Act.
  • The new law also provides a smaller credit for people who buy a used EV.
• Eligibility to Get Credit:
  • It will depend upon different income criteria for new EVs and used EVs.
• How Credit will be Paid:
  • At first, it will be applied to the 2023 tax return, which is filed in 2024. 
  • Starting in 2024, consumers can transfer the credit to a dealership to lower the vehicle price at purchase.
• Benefits:
  • It is designed to reduce greenhouse emissions.
  • It is intended to make zero-emission vehicles affordable to more people.

Source: IE