Photo: Ford
The Inflation Reduction Act aims to speed up EV adoption and boost electric car production in North America. Nevertheless, the same act incentivizes the purchase of used electric vehicles when certain conditions are met. Now, there’s an online tool verifying which one qualifies for incentives.
We’ve been talking for some time about the Inflation Reduction Act (IRA) and how it aims to boost the production of electric vehicles and batteries in North America. Besides encouraging the local production of electric vehicles while keeping China at bay, the federal government also wants to help lower-income citizens buy electric cars. This is why the IRA also offers incentives to people buying used EVs, although the tax credit is only $4,000 in this case.
Nevertheless, as with new EVs, qualifying for the used EV tax credit is complicated. Many requirements must be met to get the credit, so it pays to know before committing to a purchase if the car is eligible. According to IRA, the used EV must be at least two model years old (2021 and older in 2023) and have a price of less than $25,000. It must be sold by a licensed dealer (no private sellers allowed) and cannot have been used to claim the credit before. Besides, the vehicle must have a battery capacity of at least 7 kWh, which means that almost all plug-in hybrids qualify.
With so many criteria, it’s no wonder why people still feel confused about IRA tax credits. Knowing which vehicle qualifies before purchase is important, and that’s why people at Recurrent have put online a tool for that. The used EV tax credit eligibility tool lets you verify a used EV based on its vehicle identification number. This is incredibly simple to use and was built after one of the Recurrent executives found it hard to read all the eligibility criteria.
The person who wants to apply for the tax credit must also comply with strict requirements, including the income caps. More specifically, the maximum adjusted gross income (AGI) must be lower than $75,000 for a single filer, $150,000 for joint filers, and $112,500 for a Head of Household. One person can only apply for a tax credit once every three years, and reselling the vehicle is also strictly regulated.
The used EV credit could prove even more important to people than the new EV tax credit, considering that the used-EV market is twice the size of the new-EV market. Although the used EV segment is still underdeveloped, the situation will change fast as people buy more electric cars and they are later sold. Undoubtedly, many more people would buy a used EV than a new one.
Nevertheless, the $25,000 price limit can be a disturbing factor in the market, as many sellers would probably price their EVs accordingly to make them eligible for a tax credit. On the other hand, EVs usually hold their value over time, meaning many will have to wait a long time before becoming eligible. This usually means they might have a more worn-out battery, so buyers must be very careful when doing their research.
Nevertheless, as with new EVs, qualifying for the used EV tax credit is complicated. Many requirements must be met to get the credit, so it pays to know before committing to a purchase if the car is eligible. According to IRA, the used EV must be at least two model years old (2021 and older in 2023) and have a price of less than $25,000. It must be sold by a licensed dealer (no private sellers allowed) and cannot have been used to claim the credit before. Besides, the vehicle must have a battery capacity of at least 7 kWh, which means that almost all plug-in hybrids qualify.
With so many criteria, it’s no wonder why people still feel confused about IRA tax credits. Knowing which vehicle qualifies before purchase is important, and that’s why people at Recurrent have put online a tool for that. The used EV tax credit eligibility tool lets you verify a used EV based on its vehicle identification number. This is incredibly simple to use and was built after one of the Recurrent executives found it hard to read all the eligibility criteria.
The person who wants to apply for the tax credit must also comply with strict requirements, including the income caps. More specifically, the maximum adjusted gross income (AGI) must be lower than $75,000 for a single filer, $150,000 for joint filers, and $112,500 for a Head of Household. One person can only apply for a tax credit once every three years, and reselling the vehicle is also strictly regulated.
The used EV credit could prove even more important to people than the new EV tax credit, considering that the used-EV market is twice the size of the new-EV market. Although the used EV segment is still underdeveloped, the situation will change fast as people buy more electric cars and they are later sold. Undoubtedly, many more people would buy a used EV than a new one.
Nevertheless, the $25,000 price limit can be a disturbing factor in the market, as many sellers would probably price their EVs accordingly to make them eligible for a tax credit. On the other hand, EVs usually hold their value over time, meaning many will have to wait a long time before becoming eligible. This usually means they might have a more worn-out battery, so buyers must be very careful when doing their research.
Google News