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Prior to 2024, U.S. auto buyers could only take advantage of the
new EV credit of up to $7,500 or the $4,000 used EV credit when
they filed tax returns the following year.
The Internal Revenue Service has received approximately 100,000
time of sale EV reports this year and paid more than $580
million in advance payments to dealers since Jan. 1, Treasury
said.
Starting Jan. 1, consumers can transfer the credits to a car
dealer at the time of sale, effectively lowering the purchase
price.
Treasury said more than 85,000 of the time of sale tax reports
were for new EVs, with over 90% of those including advance
payments request for $7,500. More than 15,000 time of sale
reports were for used EVs, with about 75% including advanced
payments requests for $4,000.
Treasury spokesperson Haris Talwar said "demand is high four
months into implementation of this new provision."
The Treasury issued guidelines in December aimed at weaning the
U.S. EV supply chain away from China. The number of EV models
qualifying for U.S. EV tax credits fell on Jan. 1 to 19 from 43
with some Tesla Model 3s, Chevrolet Silverado EV, Ford Mustang
Mach-E, Ford E-Transit vehicles among those losing credits.
Since then, many have regained eligibility including the
Volkswagen ID.4, Nissan Motor Leaf, GM's Chevy Blazer EV and
Cadillac Lyriq.
Consumers must attest they meet income limits to qualify for the
tax credit at time of purchase or they will need to repay the
government when filing their taxes. For new vehicles, the
adjusted gross income limit is $300,000 for married couples and
$150,000 for individuals.
The August 2022 Inflation Reduction Act law reformed the EV tax
credit, requiring vehicles to be assembled in North America to
qualify for any tax credits, eliminating nearly 70% of eligible
models.
It also created a used EV tax credit, lifted 200,000-vehicle
manufacturer caps on credits, imposed income and vehicle price
restrictions and extended credits to leased vehicles.
(Reporting by David Shepardson; Editing by David Gregorio and
Diane Craft)
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