Tesla’s decision to cut the price on several models will allow more consumers to qualify for a $7,500 federal electric-vehicle tax credits subsidy, but there is a hitch. On January 1, the income restrictions were lifted.
In 2009, the EV tax credits were established. The government, however, modified several of the norms late last year. It abolished a restriction on the number of vehicles each manufacturer could sell. It also imposed limits based on the vehicle’s cost, location of manufacture, and taxpayer income.
Individuals with an AGI of $150,000 or joint filers with an AGI of $300,000 will no longer be eligible to claim the credit. According to the Internal Revenue Service, this restriction may be calculated based on either your adjusted AGI for the year you purchased the automobile or the previous year. You may still qualify if you had a lower income in 2022 and are over the income limits for 2023.
Why Are the Meant-To-Be Incentives so Confusing to Tesla Customers?
Starting on January 1, the income limitations apply to “placed in service” vehicles. As a result, the income restrictions apply if you buy an electric vehicle this year. Wolters Kluwer Tax & Accounting’s Mark Luscombe works as a federal tax analyst. The income limits apply to you, too, if you bought an EV last year but didn’t get it until this year, according to him.
Taxpayers will face more hurdles in claiming credit under several new standards. Vehicles must be put together in North America. Vans, SUVs, and pick-ups cannot cost more than $80,000, while all other cars can’t cost more than $55,000.
The base Model Y crossover from Tesla was reduced to $52,990. Tesla also dropped the price of the Model 3 Performance to $53,990, a high-performance version.
While the guidelines may seem a bit hard to digest for Tesla customers, the bundle of instructions they’ve delivered by this point is quite efficient. Further developments will set a more distinct path toward the future.