How Does the Federal Tax Credit for Electric Cars Work?

While innovative electric vehicles can help you save on gas during your commutes around St Louis, they can also give you money back with a federal electric car tax credit. With the purchase of an electric vehicle, you can receive up to $7,500 in tax credits depending on the EVs traction battery capacity and gross vehicle weight rating. If you’re interested in upgrading to an electric vehicle in Manchester, learn more about how the federal tax credit works for electric cars and explore the benefits of EVs at BMW of West St Louis!

Eligibility Terms for the Electric Car Tax Credit

Previously, top-selling EV models were prevented from receiving the federal tax credit after selling over 200,000 eligible models. However, with the introduction of the Inflation Reduction Act, the focus turns to rewarding Ballwin drivers for making more energy-efficient home improvements and electric vehicle purchases. All eligible taxpayers can take advantage of the electric car tax credit between 2023 and 2032 for EVs purchased in 2023 and on. Here are some of the eligibility requirements:

• Have a battery capacity of at least 7-kilowatt hours
• Have a gross vehicle weight rating of fewer than 14,000 pounds
• Be made by a qualified manufacturer. See which new and used vehicles qualify.
• New electric vehicle buyers meeting a certain income threshold may qualify for a credit of up to $7,500. The new EV tax credit guidelines also set limits on the modified adjusted gross income that taxpayers make.
• Used cars can qualify for a credit of up to $4,000 credit, limited to 30% of the car’s purchase price. However, the used car must be a PHEV or fuel cell, and it only applies to the first transfer of vehicles at least two years old.
• Eligible vehicles must have an MSRP of $80,000 and under for vans, trucks, and SUVs; under $55,000 MSRP for sedans and passenger cars; and under $25,000 MSRP for used cars.
• How much credit a vehicle receives depends on if the final assembly was completed in the US, how much of the battery was manufactured/assembled in the US, and how much of the battery materials were sourced in the US or a free-trade country.

Discover Electric BMW Models at BMW of West St Louis!

Now it’s even easier to add an exciting electric BMW model to your trips around Ballwin. Learn more about preparing your home for an electric vehicle and don’t hesitate to contact our team at BMW of West St Louis if you have questions about the electric car tax credit.