ICYMI, a new bill called the Inflation Reduction Act was signed into law on 8/16/22.
3/4 of this $437B bill is focused on reducing climate change, making it the largest investment in this area in US history.
The Wilderness Society (around since 1935) is calling this bill a “breakthrough” on climate policy.
If you’ve been thinking about “going electric” (the first few months of 2022 saw a 60% in Electric Vehicle ((EV)) registrations!) read below for the latest on the EV tax credits, as well as their restrictions.
The existing EV tax credits were set to expire in 2022, this bill extends the following credits through 2032:
$7500 tax credit with purchase of new EV.
$4000 tax credit or 30% of the price of the vehicle, whichever is less, with purchase of used (at least 2 years old) EV.
Additions to existing policy:
EV tax credits no apply to any “clean vehicle”: a hydrogen fuel cell car (“hybrid”), a plug-in hybrid, even some commercial vehicles, depending on weight.
Starting in 2024, the discount will be applied at the dealership, rather than having to claim in on your taxes.
Restrictions:
Income Limits: Single/$150,000 AGI (gross annual income after deductions) does not qualify. Married couples who are filing jointly/$300,000. Head of household/$225,000.
Vehicle Price/Type for New Rigs: Vans, Trucks, SUV’s with an MSRP of more than $80,000 do not qualify. Cars/MSRP can’t exceed $55,000.
Vehicle Price for Used Rigs: MSRP $25,000 or less.
More Rules:
The part of the legislation on clean vehicles indicates that the same $7,500 tax credit will be offered to those who purchase an EV, but stricter laws regarding the vehicle components may make finding a qualifying EV challenging. The incentive can essentially be split into two parts, the minerals used in the battery components.
A certain percentage of the critical minerals used in the battery must be extracted from the U.S. or a country that the U.S. shares a free trade agreement with: i.e. U.S., Canada or Mexico. The required percentages will increase each year from 2024 to 2026.
Some good news! The legislation removes the limit on the number of EVs sold. Previously, manufacturers that sold 200,000 vehicles would no longer be eligible to offer credit. But in order to qualify the vehicles must be assembled in North America.
Some good news! The legislation removes the limit on the number of EVs sold. Previously, manufacturers that sold 200,000 vehicles would no longer be eligible to offer credit. But in order to qualify the vehicles must be assembled in North America.
Unlocking Abundance 