Which electric vehicles benefit from the federal electric vehicle tax credit?

Purchasing a new electric vehicle can be an extremely exciting time, as you have the chance to step into the future. As electric cars become more commonplace, there is a huge selection of models to consider. Figuring out what features you want, your ideal range, and everything in between can be a critical part of the buying experience. An important aspect to consider is the federal tax credit available for electric vehicles. Which electric cars should you consider if you want to take advantage of this benefit?

Which electric cars are eligible?

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<p>To take advantage of the federal EV tax credit, you must first purchase one of the eligible models.  They must be electric vehicles or plug-in hybrid (PHEV) models, and the model year does not matter.  Additionally, eligibility for this tax credit also depends on battery capacity, so some models may not be eligible for the full tax credit.</p>
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If you want to take advantage of the full tax credit of $7,500, consider electric vehicles such as:

  • Audi e-tron
  • Audi e-tron Sportback
  • BMWi4
  • Hyundai Ioniq 5
  • lucid look
  • Mini Cooper SE Hardtop
  • Nissan Leaf
  • Porsche Taycan
  • Volkswagen ID.4

These 100% electric models all get full credit. Yet many plug-in hybrid (PHEV) models also benefit from the federal electric vehicle tax credit. Looking at this list, you might be surprised that models from the GM and Tesla family of brands aren’t available. Indeed, these two brands have sold more than 200,000 models, which makes these brands ineligible for the federal tax credit for electric vehicles.

Are there models for a lower amount of tax credits?

Audi RS e-tron GT 2022 | Audi

Yes! A massive selection of different models available, primarily PHEV models, are eligible for certain federal tax credits. Many of these models allow you to obtain tax credits ranging from $1,875 to $6,843. That’s still a little extra cash to help lower the cost of buying one of these models. The EPA has a comprehensive list of models you can review and see how much credit you might receive.

What exactly is this tax credit and how can I claim it?

a new nissan leaf on the road, an economical electric car that can use the federal electric vehicle tax credit

2022 Nissan Leaf | Nissan

The big question surrounding the tax credit is, what exactly is this federal electric vehicle tax credit? The easiest way to explain this credit is an amount you can claim on your taxes that will reduce your tax liability. This means that if you can claim the full amount of $7,500, you can reduce the amount you owe on your taxes.

To claim this credit, you’ll need to fill out a specific IRS form, and if everything works out, you might owe a lot less or no money at all. But be aware that this tax credit is non-refundable, meaning it won’t automatically increase your refund or lower your tax liability below $0.

All of this can be confusing, and believe me, it is. Speak to a tax professional to better understand this tax credit and how it could affect your financial situation.

Are used electric vehicles or leased models eligible?

lucid air parked in the desert, a luxury-oriented electric vehicle

Lucid Air GT | Lucid

Can you get this tax credit if you decide to buy a used electric vehicle? No, the tax credit only applies to a new EV purchase. But, you might qualify for local or state incentives, so check that option out. In addition, if you lease a new EV, you will not be able to take advantage of this tax credit. But, you can enjoy additional savings through a lower lease payment.

Take advantage of this tax credit while you can

a porsche taycan driving on a cliff side road

Porsche Taycan 2022 | Porsche

As this tax credit only applies to a specific number of models, if you are interested in a new electric car or plug-in hybrid vehicle, start the purchase process now. While the limit is 200,000 models and there are few automakers close to that threshold, you don’t want to miss this.

RELATED: Electric car prices are falling

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