in important ways. First, it split the credit into two parts — battery materials and battery components. Both have to be sourced either within North America or from a country approved by the Treasury Department . Second, it required that final assembly of the vehicle take place in North America.. They had to meet income restrictions — no incentives for billionaires — and they had to owe enough in federal taxes to qualify for the maximum EV tax credit.
The new rules place a lot more of the burden on dealers, who will report sales to the IRS directly and get reimbursed for the amount of the credit within 72 hours. Here’s the part that will have the biggest impact on buyers. “Eligible consumers may transfer the full value of the new or previously owned vehicle creditThere’s another huge advantage for buyers here. Previously the full amount of the sale had to be paid or financed up front, while the benefit came in the following tax year.
The price and income limits included in the IRA still apply. Sedans and wagons are limited to a sales price of $55,000. The price of SUVs and light trucks is limited to $80,000. The income limits for a new vehicle are $150,000 adjusted gross income for an individual, $225,000 for a head of household, and $300,000 for a married couple filing jointly or a surviving spouse.
But when my wife and I bought a used Chevy Bolt earlier this year, we had to tell the dealer about this and walk the staff through the process. Fortunately, we knew more about the process than the dealer, but not everyone will have that information at their fingertips back more or less immediately if you don’t want to incur interest and penalties. Make sure your ducks are all in a row before you sign that form certifying your income is below the allowable limits.