Solved

Cares Act & EV rebates

Forum|Forum|3 years ago
September 28, 2022
1 reply
0 views

I'm purchasing a new EV and it should arrive before the end of the year. The vehicle is a Volkswagen iD4. Will i be able to apply for the $7500 federal tax rebate on this vehicle?

Best answer by KochuK

Hi Jhughlette64, thanks for the event question.

Inflation Reduction Act of 2022 (IRA 2022) signed into law on 8/16/2022. Hence terms used here are “Pre-IRA 2022” and “Post-IRA 2022.”

If you purchase and take possession of a qualifying EV after 8/16/2022 and before 1/1/2023, and you satisfy the final North American assembly requirement (VW iD4 manufactured in Chattanooga TN), the "Pre-IRA 2022" rules apply. Based on below link, the credit should be $7,500 subject to further IRS update.

Index for Manufacturers published by the IRS

https://www.irs.gov/businesses/irc-30d-new-qualified-plug-in-electric-drive-motor-vehicle-credit

You can use the applicable EV credit on your tax year 2022 Federal tax return to offset the tax liability. However, the unused tax credit does not carryover or carryforward to 2023 if you do not use it in the year you purchased the vehicle (2022).

If you have little nor no tax liability in tax year 2022, rather than receive little or no benefit for claiming the EV credit, you can delay purchase until 2024 when you are allowed to transfer the credit to the dealer selling the EV in exchange of reduced sale price.

Thank you and hope the above helps.

KochuKAnswer

Hi Jhughlette64, thanks for the event question.

Inflation Reduction Act of 2022 (IRA 2022) signed into law on 8/16/2022. Hence terms used here are “Pre-IRA 2022” and “Post-IRA 2022.”

If you purchase and take possession of a qualifying EV after 8/16/2022 and before 1/1/2023, and you satisfy the final North American assembly requirement (VW iD4 manufactured in Chattanooga TN), the "Pre-IRA 2022" rules apply. Based on below link, the credit should be $7,500 subject to further IRS update.

Index for Manufacturers published by the IRS

https://www.irs.gov/businesses/irc-30d-new-qualified-plug-in-electric-drive-motor-vehicle-credit

You can use the applicable EV credit on your tax year 2022 Federal tax return to offset the tax liability. However, the unused tax credit does not carryover or carryforward to 2023 if you do not use it in the year you purchased the vehicle (2022).

If you have little nor no tax liability in tax year 2022, rather than receive little or no benefit for claiming the EV credit, you can delay purchase until 2024 when you are allowed to transfer the credit to the dealer selling the EV in exchange of reduced sale price.

Thank you and hope the above helps.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

J

Jhughlette64Author

The Index for Manufacturers published by the IRS indicates the iD4 up to manufacturer year of 2021. The vehicle I am purchasing is a 2023. Will this matter?