Senators Propose Generous Tax Breaks For Electric Car Owners

Cadrene Heslop

A proposal on the books sets to benefit electric vehicle (EV) drivers. It is the Inflation Reduction Act. Experts label the benefits as generous. The act is part of the Biden administration's plan to increase EV sales in less than a decade. Some EVs already qualify for tax credits; these got left out of the new proposal. Models not entitled to government help could become eligible. But this change will only happen if the law gets passed. (source)

Details of the bill await finalization. Here is what got made public thus far. The legislation introduced two new EVs credits, totaling up to $7,500 per car. These are the primary qualifying rules. (source)

"A new electric vehicle can qualify for a credit of $3,750, provided it meets certain conditions: Its final assembly must take place in North America; it must cost under $55,000 ($80,000 for pickups or SUVs), and; buyers must have an annual income of less than $150,000 (more if they are married or heads of household).
An additional credit of $3,750 applies if the EV's battery meets some fairly stringent requirements. Automakers are raising concerns that those requirements will render the full credit unavailable for any U.S. car."

The bill is under review, and it is subject to change. Right now, analysts say the rules are complex.
Photo by CHUTTERSNAP on Unsplash

The tax credit requires car battery assembly in North America. Or a country with which the U.S. has a free trade agreement. Researchers note this qualifying rule is a problem. None of today's EVs meet this proposed standard. Another issue is that the IRS and Treasure have the last say about EVs eligibility. (source)

The IRS has until year-end to release details about the inflation bill. (source)

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*Disclaimer: This article is for informational purposes only. This article got written using accredited media reports. *Advice Disclaimer: This article should not be considered business, professional financial, shopping, car ownership, or legal advice. The ideas, numbers, and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional or life coach.

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