{"id":1160,"date":"2021-08-03T08:09:00","date_gmt":"2021-08-03T15:09:00","guid":{"rendered":"https:\/\/freedomgeneral.com\/blog\/?p=1160"},"modified":"2021-07-30T08:11:24","modified_gmt":"2021-07-30T15:11:24","slug":"electric-car-tax-credit-ultimate-guide","status":"publish","type":"post","link":"https:\/\/freedomgeneral.com\/blog\/electric-car-tax-credit-ultimate-guide\/","title":{"rendered":"Electric Car Tax Credits: The Ultimate Guide"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"683\" src=\"https:\/\/freedomgeneral.com\/blog\/wp-content\/uploads\/2021\/07\/calculating-taxes-1024x683.jpg\" alt=\"Person calculating taxes from buying an electric vehicle\" class=\"wp-image-1161\" srcset=\"https:\/\/freedomgeneral.com\/blog\/wp-content\/uploads\/2021\/07\/calculating-taxes-1024x683.jpg 1024w, https:\/\/freedomgeneral.com\/blog\/wp-content\/uploads\/2021\/07\/calculating-taxes-300x200.jpg 300w, https:\/\/freedomgeneral.com\/blog\/wp-content\/uploads\/2021\/07\/calculating-taxes-768x512.jpg 768w, https:\/\/freedomgeneral.com\/blog\/wp-content\/uploads\/2021\/07\/calculating-taxes-1536x1024.jpg 1536w, https:\/\/freedomgeneral.com\/blog\/wp-content\/uploads\/2021\/07\/calculating-taxes.jpg 1920w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>As electric cars become more and more popular, people around the nation are beginning to take notice of all the many benefits they offer. From saving money on gas to helping save the environment, electric vehicles come with a huge range of benefits that drivers love.<\/p>\n\n\n\n<p>At Freedom National, our job is to help you take advantage of every possible way you can save on your vehicle\u2014 not just when it comes to cheap car insurance online. That\u2019s why we\u2019ve created this guide to one of the <a href=\"https:\/\/freedomgeneral.com\/blog\/10-advantages-and-disadvantages-of-electric-cars\/\" target=\"_blank\" rel=\"noreferrer noopener\">greatest advantages of owning an electric car<\/a>: the electric vehicle tax credit.<\/p>\n\n\n\n<p>The rules associated with who gets the electric car tax credit, how much it&#8217;s worth, and how the process of claiming the credit works isn\u2019t as straightforward as some might think. We\u2019re here to answer all of the most common questions about electric car tax credits, including:<\/p>\n\n\n\n<ul><li>What are electric car tax credits?<\/li><li>What recent changes have occurred when it comes to these credits?<\/li><li>Which vehicles qualify for the credits?<\/li><li>Are there any hidden catches when it comes to claiming electric car tax credits?<\/li><li>Does the electric car tax credit apply to leased vehicles?<\/li><li>What if you owe taxes when claiming the electric car tax credit?<\/li><li>When do you receive the electric car tax credit?<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">What Are Electric Car Tax Credits?<\/h2>\n\n\n\n<p>Electric car tax credits are tax incentives that reward people who purchase electric vehicles. These tax credits are a fixed dollar amount that can be applied to your taxes to lower your total tax bill. Keep in mind that they are not a refund\u2014 you won\u2019t receive a check if your eligible credit is more than what you owe in taxes. In this case, your total tax bill would simply be zero.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Federal<\/h3>\n\n\n\n<p>The most significant electric car tax credit comes from the federal government, which is currently offering up to $7,500 in tax credits for people who purchase electric vehicles. That said, the tax credit may be slightly less depending on the specific vehicle. See our list of qualifying vehicles and their associated tax credits in the <strong>What Vehicles Qualify for Electric Vehicle Credits<\/strong> below.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">State<\/h3>\n\n\n\n<p>While their incentives generally aren\u2019t as significant as the federal electric vehicle tax incentive, states and local governments also may offer incentives. These incentives may appear in the form of tax credits, rebates, reduced taxes on electric vehicles, special access to carpool lanes even with one driver, and waived registration or state inspection fees.&nbsp;<\/p>\n\n\n\n<p>In California, state rebates for electric vehicles can be as high as $7,000\u2014 nearly matching the federal incentives.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Other<\/h3>\n\n\n\n<p>In some areas, utilities providers will also incentivize buyers to purchase electric cars. If you think about it, it makes economic sense for electric companies to motivate their customers to purchase electric cars. Instead of buying fuel at the gas station, electric vehicle drivers are often plugging in at home to charge their vehicles. Any electricity cost that results will help the electric company earn more.<\/p>\n\n\n\n<p>Check with your utility provider about any incentives they provide. While some may offer minimal incentives or none at all, others offer as much as a $2,500 rebate for individuals who purchase a new electric vehicle and install a home charging station.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Recent Changes to Electric Car Tax Credits<\/h2>\n\n\n\n<p>As of now, the $7,500 electric vehicle tax credit is still in effect. That may change as government discussions and negotiations about the best way to incentivize EV purchases continues.<\/p>\n\n\n\n<p>The most significant news when it comes to the electric car tax credit is which companies are eligible. As we\u2019ll explore in more detail in a later section, manufacturers only qualify for the tax credit when they\u2019ve sold less than 200,000 qualifying vehicles. That\u2019s why Tesla, currently the most successful EV manufacturer, and GM, a distant 2nd, no longer appear on the list of qualified vehicles.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The New Infrastructure Plan\u2019s Effects on EVs<\/h2>\n\n\n\n<p>Unfortunately, the new infrastructure plan that has just been approved under the Biden administration will not feature any significant increases or additions to the existing $7,500 tax credit for electric vehicles. While Biden\u2019s original proposal included enhanced EV subsidies, the final negotiated product has had these subsidies cut out.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Which Vehicles Qualify for Electric Vehicle Credits?<\/h2>\n\n\n\n<p>In general terms, a vehicle qualifies for the electric vehicle tax credit if it\u2019s either battery powered or a plug-in hybrid, has a battery pack rated for 4 kWh of energy storage, and is capable of being plugged in to an external source for charging. It also must come from a manufacturer who has sold less than 200,000 of these qualifying vehicles.&nbsp;<\/p>\n\n\n\n<p>Here\u2019s the full list of qualifying electric vehicles as of July 2021 and they\u2019re associated full credit amount:<\/p>\n\n\n\n<p><strong>Electric Vehicles<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Audi e-tron SUV<\/td><td>$7,500<\/td><\/tr><tr><td>Audi e-tron Sportback<\/td><td>$7,500<\/td><\/tr><tr><td>BMW i3<\/td><td>$7,500<\/td><\/tr><tr><td>Ford Mustang Mach-E<\/td><td>$7,500<\/td><\/tr><tr><td>Hyundai Ioniq Electric<\/td><td>$7,500<\/td><\/tr><tr><td>Hyundai Kona Electric<\/td><td>$7,500<\/td><\/tr><tr><td>Jaguar I-Pace<\/td><td>$7,500<\/td><\/tr><tr><td>Kia Niro EV<\/td><td>$7,500<\/td><\/tr><tr><td><\/td><td><\/td><\/tr><tr><td>Mini Hardtop Electric<\/td><td>$7,500<\/td><\/tr><tr><td>Nissan Leaf<\/td><td>$7,500<\/td><\/tr><tr><td><a href=\"https:\/\/www.edmunds.com\/polestar\/2\/\">Polestar 2<\/a><\/td><td>$7,500<\/td><\/tr><tr><td>Porsche Taycan<\/td><td>$7,500<\/td><\/tr><tr><td>Volkswagen ID.4<\/td><td>$7,500<\/td><\/tr><tr><td>Volvo XC40 Recharge<\/td><td>$7,500<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Plug-in hybrids<\/strong><\/td><td><\/td><\/tr><tr><td>Audi A8L 60 TFSI e<\/td><td>$6,712<\/td><\/tr><tr><td>Audi Q5 55 TFSI e<\/td><td>$6,712<\/td><\/tr><tr><td>Bentley Bentayga Hybrid<\/td><td>$7,500<\/td><\/tr><tr><td>BMW i3 with range extender<\/td><td>$7,500<\/td><\/tr><tr><td>BMW X3 xDrive30e<\/td><td>$5,836<\/td><\/tr><tr><td>BMW X5 xDrive45e<\/td><td>$7,500<\/td><\/tr><tr><td>BMW 3 Series 330e<\/td><td>$5,836<\/td><\/tr><tr><td>BMW 5 Series 530e<\/td><td>$5,836<\/td><\/tr><tr><td>BMW 7 Series 745e xDrive<\/td><td>$5,836<\/td><\/tr><tr><td>Chrysler Pacifica Hybrid<\/td><td>$7,500<\/td><\/tr><tr><td>Ford Escape Plug-In Hybrid<\/td><td>$6,843<\/td><\/tr><tr><td>Ford Fusion Plug-In Hybrid<\/td><td>$6,843<\/td><\/tr><tr><td>Honda Clarity Plug-In Hybrid<\/td><td>$7,500<\/td><\/tr><tr><td>Hyundai Ioniq Plug-In Hybrid<\/td><td>$4,543<\/td><\/tr><tr><td>Jeep Wrangler 4xe<\/td><td>$7,500<\/td><\/tr><tr><td>Kia Niro Plug-In Hybrid<\/td><td>$4,543<\/td><\/tr><tr><td>Land Rover Range Rover Hybrid<\/td><td>$6,295<\/td><\/tr><tr><td>Land Rover Range Rover Sport Hybrid<\/td><td>$6,295<\/td><\/tr><tr><td>Lincoln Aviator Hybrid<\/td><td>$6,534<\/td><\/tr><tr><td>Lincoln Corsair Hybrid<\/td><td>$6,843<\/td><\/tr><tr><td>Mini Countryman Hybrid<\/td><td>$5,002<\/td><\/tr><tr><td>Mitsubishi Outlander PHEV<\/td><td>$6,587<\/td><\/tr><tr><td>Polestar 1<\/td><td>$7,500<\/td><\/tr><tr><td>Porsche Cayenne Hybrid<\/td><td>$6,712<\/td><\/tr><tr><td>Porsche Panamera Hybrid<\/td><td>$6,712<\/td><\/tr><tr><td>Subaru Crosstrek Hybrid<\/td><td>$4,502<\/td><\/tr><tr><td>Toyota Prius Prime<\/td><td>$4,502<\/td><\/tr><tr><td>Toyota RAV4 Prime<\/td><td>$7,500<\/td><\/tr><tr><td>Volvo S60 Hybrid<\/td><td>$5,419<\/td><\/tr><tr><td>Volvo S90 Hybrid<\/td><td>$5,419<\/td><\/tr><tr><td>Volvo V60<\/td><td>$5,419<\/td><\/tr><tr><td>Volvo XC60 Hybrid<\/td><td>$5,419<\/td><\/tr><tr><td>Volvo XC90 Hybrid<\/td><td>$5,419<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Do I Get a Tax Credit for Buying a Used Electric Car?<\/h2>\n\n\n\n<p>No\u2014 electric vehicle tax credits only apply to the original owner of a vehicle, which means that you can\u2019t claim any tax credits on a vehicle that you buy used. Even if you buy your vehicle straight from the dealership, if you\u2019re not the first owner, then the electric car tax credit won\u2019t be able to apply to you. Keep that in mind when shopping for an electric vehicle.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What\u2019s the Catch?<\/h2>\n\n\n\n<p>While there\u2019s not a long list of sneaky \u2018fine-print\u2019 when it comes to claiming tax credits for your vehicle, there are some conditions you\u2019ll want to know about. Here are some of the most important ones.<\/p>\n\n\n\n<ul><li>If you\u2019re purchasing a vehicle with the goal of reselling it, you\u2019re technically not allowed to claim the electric vehicle tax credit. That said, intent of purchase is difficult to prove, so this catch is hardly ever pursued by authorities.<\/li><li>Your electric car must be primarily used in the United States in order to claim the tax credit. That doesn\u2019t mean you can\u2019t take your vehicle on a road trip to Canada now and then, but it does mean that you must primarily live and drive in the U.S. if you want the credit.<\/li><li>Your vehicle must be built by one of a qualified list of manufacturers to qualify for the full credit, including: Audi, BMW, Ford, Hyundai, Jaguar, Kia, Nissan, Porsche, Volkswagen, Chrysler, Honda, Jeep, Land Rover, Lincoln, Mitsubishi, Subaru, Toyota, and Volvo&nbsp;<\/li><li>Both plug-in hybrid vehicles and battery electric vehicles must featured battery packs rated for at least 4 kWh of energy storage, and must be able to be charged from an external source<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">How Long Will I Be Able to Claim the Electric Vehicle Tax Credit?<\/h2>\n\n\n\n<p>The electric vehicle tax credit may sound like an incentive for buyers to purchase more energy-efficient and environmentally friendly cars, and that\u2019s true to an extent. But the true purpose of these tax credits is actually to help motivate manufacturers to produce them. When the purchase of an electric vehicle results in a tax credit for buyers, that makes buyers more likely to purchase that manufacturer\u2019s vehicle. This incentivizes manufacturers to produce more of them\u2014 an important task considering that electric vehicles contain new technology that\u2019s more expensive to implement up-front.<\/p>\n\n\n\n<p>However, as manufacturers produce more of these electric vehicles, the cost to manufacture each one gradually drops. That\u2019s why <strong>the tax credit for each individually manufacturer disappears after they\u2019ve produced 200,000 electric vehicles<\/strong> that qualify for the tax credit.<\/p>\n\n\n\n<p>This is why you\u2019ll notice that Tesla vehicles are not featured on the list of eligible vehicles, and neither are GM vehicles. They\u2019ve both hit the 200,000 vehicle milestone, and no longer qualify for the incentive. Nissan is likely the next to reach this milestone, though likely not for another year or more. The other carmakers are significantly further behind.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Is the Electric Vehicle Tax Credit Expected to Increase?<\/h2>\n\n\n\n<p>Based on the approved infrastructure bill currently moving towards passage in the U.S. government, it\u2019s unlikely that an increase in the EV tax credit will be here any time soon. That said, you never know what new legislation may pop up\u2014 and there are also state and non-government incentives to take into consideration, which could always receive an unexpected boost.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What If I Owe Taxes When I Claim the Electric Car Tax Credit?<\/h2>\n\n\n\n<p>If you owe taxes when it comes time to claim the electric vehicle tax credit, the credit will simply offset the total amount of taxes owed by the amount you qualify to receive. For example, let\u2019s say you owe $10,000 on your federal taxes and your electric vehicle qualifies for a $5,000 tax credit. You would then owe $5,000 in taxes.<\/p>\n\n\n\n<p>But let\u2019s say you only owe $4,000 in taxes and qualify for the $5,000 credit. You would not then qualify for a $1,000 check from the IRS. You would simply owe $0 after the credit is applied.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Does the Electric Vehicle Tax Credit Apply to Leased Vehicles?<\/h2>\n\n\n\n<p>Unfortunately, the electric vehicle tax credit can\u2019t be applied for people who drive a leased vehicle. Because the leasing company technically \u2018owns\u2019 the vehicle that they lease out to you, they\u2019re the ones who get to claim the tax credit.<\/p>\n\n\n\n<p>But all is not lost\u2014 you can still benefit from the tax credit if you drive a leased vehicle, albeit indirectly. In most cases, companies that lease a qualifying electric vehicle to a consumer will factor the tax credit into the monthly cost of the lease, so you\u2019ll save money on your monthly payments. While leasing companies aren\u2019t required to do this, most will by convention because they want to motivate consumers to lease from them as much as possible.<\/p>\n\n\n\n<p>If you\u2019re wondering whether a vehicle you\u2019re thinking of leasing qualifies and whether the leasing company will pass savings on to you, simply ask\u2014 most of them will build it right into the price.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">When Can I Receive the Tax Credit?<\/h2>\n\n\n\n<p>The tax credit is applied whenever you file your taxes, and will be reflected in the amount you owe the federal government after your return has been processed.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>Purchasing an electric vehicle isn\u2019t just good for the environment, but with federal, state, and private incentives, it can also be good for your wallet.<\/p>\n\n\n\n<p>Speaking of good for your wallet, did you know that Freedom National offers the best cheap car insurance online by connecting you with the perfect insurance provider for your needs? <a href=\"https:\/\/pos.freedomgeneral.com\/direct\/en\" target=\"_blank\" rel=\"noreferrer noopener\">Get a quote in minute<\/a>s and select the policy that\u2019s best for you to get covered in no time, all with Freedom National.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As electric cars become more and more popular, people around the nation are beginning to take notice of all the many benefits they offer. From saving money on gas to helping save the environment, electric vehicles come with a huge range of benefits that drivers love. At Freedom National, our job is to help you take advantage of every possible way you can save on your vehicle\u2014 not just when it comes to cheap car insurance online. That\u2019s why we\u2019ve created this guide to one of the greatest advantages of owning an electric car: the electric vehicle tax credit. The <\/p>\n","protected":false},"author":7,"featured_media":1161,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Electric Car Tax Credits: The Ultimate Guide | Freedom National<\/title>\n<meta name=\"description\" content=\"Our job is to help you take advantage of every possible way you can save on your vehicle. 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