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EV tax credits can take some of the sting out of those high price tags. Here’s a look at which vehicles qualify for them in 2024. [[{“value”:”
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Electric vehicles (EVs) have become a popular way to get from point A to point B while reducing your carbon footprint. But there are a few factors that have kept them from earning a place in every American’s garage.
One of the biggest is their high price tags. The IRS offers a tax credit worth up to $7,500 for buyers of new EVs to help with this, but only certain vehicles qualify. Here’s what you need to know if you’re thinking about buying one this year.
The vehicles that qualify for an EV tax credit in 2024
If you hope to claim an EV tax credit for a new vehicle, you’ll have to purchase one of the following 34 models:
There are other requirements you have to meet as well, including:
Purchasing the vehicle for your own use, not for resaleUsing it primarily in the United StatesHaving a modified adjusted gross income (MAGI) below:$300,000 for married couples filing jointly$225,000 for heads of household$150,000 for all other filers
For the last one, you can use your MAGI from the year you take delivery of the vehicle or the year before, whichever is less.
The dealer will be able to determine the eligibility of the vehicle at the time of sale, but it doesn’t have to verify that you meet the buyer requirements listed above. That’s on you. If you claim the full credit when you don’t actually qualify for it, you’ll have to pay the IRS back at tax time.
You can either request that the dealer apply the credit at the time of purchase, effectively reducing your purchase price, or you can wait and claim the credit when you file your 2024 taxes. Either way, you’ll need to fill out Form 8936 to claim it.
Even with a credit, you’ll probably still pay quite a bit for your EV. And then you have other costs, like charging station visits and car insurance to think about. Make sure you’re comfortable with this before you go ahead with the sale.
What if your vehicle doesn’t qualify for a tax credit?
If the vehicle you’re interested in doesn’t qualify for a credit, you may want to consider switching to a different model. Review the options in the above table to see which stands out the most to you.
You could also explore used EV options if you can find any near you. Select used EV models could also qualify for a tax credit worth up to $4,000.
Or it just might not be the right time for you to invest in an EV. That may not be what you want to hear, but waiting could be the best thing for your wallet right now. As electric vehicles become more mainstream, their sticker prices and associated costs, like auto insurance, will come down.
Give it some time and look for an EV in a few years. Just keep in mind that the rules surrounding EV tax credits may change during this time. And other factors, like the availability of insurance discounts for EVs, may have changed as well. Make sure you review all of the associated costs before moving ahead with your purchase.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Kailey Hagen has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
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