How Does The Federal Tax Credit For Electric Cars Work?

With interest in electric vehicles growing, including the Kia EV6, more people in Greensboro are hearing about incentives. Based on a federal tax credit, many are unaware of how this works. Starting from a minimum of $2,500, and going all the way to $7,500, this largely depends on your car’s traction battery capacity and gross weight rating.

For those purchasing an electric car, this credit might be yours. Here, the financing team at Carolina Kia of High Point spotlights which electric vehicles are eligible.

Which Electric Cars Quality For a Tax Credit?

If someone hears about the federal EV tax credit, they assume all are applicable. Yet buyers only earn this credit if they purchase a qualifying New EV after December 31, 2009. Also meeting these criteria:

• Draws propulsion using a traction battery that has at least 5 kilowatt-hours (kWh) of capacity.
• Uses an external source of energy to recharge the battery.
• Has a gross vehicle weight rating (GVWR) of up to 14,000 pounds.
• Meets specified emission standards.
• Has to be mostly driven in the United States.

We’ve located a tool that allows potential buyers to estimate the cost of their model when driving around Kernersville. Depending if it’s a Plug-In or Battery EV, this can impact the car you’re considering and if it qualifies to earn the maximum tax credit. You also have to view battery packs and make sure they’re rated for at least 4kWh of energy storage and whether it’s rechargeable from an external source.

Do I Qualify For The Federal Electric Car Tax Credit?

After much searching, you’ll come upon the ideal EV model that works for you and qualifies for the tax credit. Upon determining if it’s applicable to your taxes, remember that it’s for buying only, leasing will send the credit to the lending business you’re working with.

You’ll have to calculate how much you will own for that year’s income tax. This can help determine how much of the EV tax credit you’ll qualify for.

Will The Electric Vehicle Tax Credit be Permanent?

As more car manufacturers move towards electric vehicles, this tax credit will not be around forever. After a specific company has sold 200,000+ eligible plug-in electric models, the credit phases out following the second quarter. To assist buyers, The IRS put out a list of qualifying manufacturers.

Save on Your EV Purchase With Kia

Find your next, or first, electric vehicle with Carolina Kia of High Point and learn if you qualify for that federal tax credit. Our sales staff can support you with any questions you may have, including covering the differences between hybrid vs. electric vehicles.