Tax Credits for Electric Vehicles

If you’re shopping for a new car, you might be considering an electric vehicle (EV). While EVs and hybrids are still generally more expensive than gas vehicles, the gap is closing. One of the reasons for that is the EV tax credit. Here’s what you should know about this credit that can make an EV more affordable.

EV Tax Credit Basics

The EV tax credit is simply a government-backed financial incentive that applies to EVs and hybrids. The credit can be as much as $7,500 for new EVs and hybrids and $4,000 for used EVs and hybrids.

A Slight Change

The EV tax credit used to be applied to your taxes. So you’d buy the EV, file the paperwork, and then the government would issue the credit when it got your tax filings. However, things have changed. Now, when you buy an EV or hybrid, the credit is applied instantly. That means no more waiting around until tax season to reap the rewards of the EV credit.

Tax Credit Fine Print

Of course, there are some catches when it comes to EV tax credits. Not all cars qualify and not all buyers do either.

How to Qualify for the Credit. To qualify for the credit, you must meet this criteria:

• Income less than $150,000 as an individual or $300,000 as a married couple.
• Cars must be made in the United States.

Do One Thing: Before seeking out an EV, make sure it fits your budget. It doesn’t make sense to chase a discount on a vehicle only to struggle to afford it afterward.

Time to Trade Up? Make it happen with an Auto Loan from Fortera. Visit our Auto Loans page to learn more.

Original article by Chris O'Shea and adapted in partnership with SavvyMoney.