As we steer towards a greener future, the automotive landscape is evolving, and electric vehicles (EVs) are becoming increasingly popular. To encourage more drivers to make the switch to electric, governments often provide incentives, including tax credits.
In 2024, there are exciting changes to the electric vehicle tax credit that can significantly impact your savings. At Dick Hannah Dealerships, we’re committed to keeping you informed about the latest developments in the world of electric vehicles. Let’s take a closer look at the 2024 changes to the EV tax credit and how they might benefit you.
Increased Maximum Credit: In 2024, the electric vehicle tax credit will see a boost in the maximum available credit. This means more potential savings for those considering the purchase of an electric vehicle. The increased credit aims to make EVs more affordable and accessible to a broader range of consumers.
Instant savings: As of January 1st, dealerships will take on the responsibility of processing the credit through the IRS portal during the sale, eliminating the need for customers to apply it to their year-end taxes. This allows customers to instantly apply the $7,500 credit towards their vehicle purchase, helping reduce the overall cost.
Expanded Eligibility Criteria: The eligibility criteria for claiming the electric vehicle tax credit have been expanded. More electric cars and plug-in hybrids now qualify for the credit, providing consumers with a wider selection of vehicles to choose from. This expansion reflects the continuous advancements in electric vehicle technology and the growing diversity of models available in the market.
Phased Reduction for Popular Models: To ensure the tax credit benefits a broad spectrum of consumers, there is a phased reduction for popular electric vehicle models. As these models become more mainstream, the tax credit gradually decreases. This approach is designed to incentivize the adoption of newer, less-established models while acknowledging the success of early EV pioneers.
Income-based Credit Adjustments: The 2024 changes also introduce income-based adjustments to the electric vehicle tax credit. Higher-income individuals may experience a reduction in the credit, while lower-income individuals could be eligible for an increased credit amount. This adjustment aims to make electric vehicles more financially attractive to a broader range of consumers.
These are the annual income limits for the $7,500 new vehicle credit: $300,000 for married couples filing a joint tax return; $225,000 for heads of household; and $150,000 for single tax filers.
These limits apply to the $4,000 used vehicle credit: $150,000 for married couples filing a joint tax return; $112,500 for heads of household; and $75,000 for single tax filers.
State Incentives Alignment: In addition to federal changes, some states may also align their incentives with the federal tax credit adjustments. This creates a more cohesive and supportive environment for electric vehicle adoption. Be sure to check your state’s specific incentives to maximize your potential savings.
At Dick Hannah Dealerships, we are optimistic about the positive changes happening in the electric vehicle landscape. The 2024 adjustments to the electric vehicle tax credit are a significant step towards making sustainable transportation more accessible to everyone. Whether you’re a seasoned electric vehicle owner or considering making the switch for the first time, these changes can impact your purchasing decision and contribute to a more sustainable future.