The majority of Americans who buy new electric cars and qualify for a tax credit are opting to receive that credit directly from the dealer instead of waiting at tax time, according to recent data from the Treasury Department. This reveals a new behavior of shoppers when choosing these stimulus checks, created in the Joe Biden administration’s Inflation Reduction Act.
About 90% of qualified consumers who buy a new electric vehicle have opted to receive their tax exemption as an upfront payment, and these payments could be as large as $7,500, an amount not at all negligible considering that electric vehicles are usually a little more expensive than traditional fuel ones.
Electric Cars That Qualify for a Tax Credit in 2024
From January 1, 2024, important changes were introduced as to which vehicles qualify for the federal tax credit of up to $7,500 for electric cars and plug-in hybrids. These changes affect cars according to their manufacturing origin, battery components and other criteria such as price and income of buyers. Some rules have gotten stricter this year, meaning some cars might not qualify for the credit.
However, leasing an electric vehicle instead of buying it can exempt you from some of these restrictions. One good news for eligible buyers is that, starting in 2024, they will be able to get the tax credit directly as a discount at the dealership at the time of purchase, without having to wait for the tax season.
Of course there are requirements and restrictions to apply for this tax credit, and for this you must:
- Buy the vehicle for your own use, not for resale.
- Use it mainly inside the United States.
- Stay within the adjusted gross income (AGI):
- $300,000 for married couples filing jointly
- $225,000 for heads of households
- $150,000 for all other filers
The list of the qualifying cars in 2024, and their maximum tax credit amounts is the following:
MSRP= Manufacturer’s Suggested Retail Price
- Cadillac Lyriq (2024 model year, MSRP $80,000 or below)
Chevrolet Bolt and Bolt EUV (2022 and 2023 model years, MSRP $55,000 or below) - Chevrolet Blazer EV (2024 model year, MSRP $80,000 or below)
- Chrysler Pacifica Hybrid PHEV (2022 through 2024 model years, MSRP $80,000 or below)
- Ford F-150 Lightning (2022 through 2024 model years, MSRP $80,000 or below)
- Honda Prologue (2024 model year, MSRP $80,000 or below)
- Tesla Model 3 Performance (2023 and 2024 model years, MSRP $55,000 or below)
- Tesla Model X Long Range (2023 and 2024 model years, MSRP $80,000 or below)
- Tesla Model Y All-Wheel Drive (2023 and 2024 model years, MSRP $80,000 or below)
- Tesla Model Y Performance (2023 and 2024 model years, MSRP $80,000 or below); and Rear-Wheel Drive (2024 model year only, MSRP $80,000 or below)
- Volkswagen ID.4 standard, S, Pro S Plus, Pro S, Pro, AWD Pro, AWD Pro S, and AWD Pro S Plus (most 2023 and 2024 model year with SK On battery components, MSRP $80,000 or below)
EV’s That Qualify for a Partial Tax Credit in 2024
Until December 31, 2024, these vehicles qualify for a partial tax credit of $3,750 when purchased new at the dealership:
- Audi Q5 PHEV (2023 and 2024 model years, MSRP $80,000 or below)
Ford Escape Plug-In Hybrid (2022 through 2024 model years, MSRP $80,000 or below) - Jeep Grand Cherokee 4xe (2022 through 2024 model years, MSRP $80,000 or below)
- Jeep Wrangler 4xe (2022 through 2024 model years, MSRP $80,000 or below)
- Lincoln Corsair Grand Touring (2022 through 2024 model years, MSRP $80,000 or below)
- Nissan Leaf (2024 model year, sold on or after March 6, 2024, MSRP $55,000 or below)
- Rivian R1S and R1T (2022 through 2024 model years, MSRP $80,000 or below)
