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5 Things to Know About the EV Provisions in the Inflation Reduction Act
The Inflation Reduction Act of 2022 (the “IRA”) was signed into law today. Its EV incentive provisions could give a huge boost to the transition beyond gasoline. Here are 5 things you need to know:
- New EVs are eligible for a federal tax credit of up to $7,500 per vehicle through 2032.
- Half the tax credit is available if a certain portion of the EV’s critical materials are from the U.S. or a free trade partner or are recycled in North America. The other half is available if a certain portion of the vehicle’s battery’s components are made or assembled in North America.
- There’s a price cap for the purchase of new EVs ($80,000 for SUV, trucks and vans, and $55,000 for all other vehicles) and an income cap ($150,000 for single filers and $300,000 for joint filers).
- The dealership can give the tax incentive up front in the form of a discount.
- Used EVs are eligible for a $4,000 tax credit, with a vehicle price cap of $25,000 and an income cap of $75,000 for single filers and $150,000 for joint filers. There are no sourcing requirements.