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If you’re considering an electric vehicle, you might be wondering, “How does the federal tax credit for electric cars work?” The federal tax credit starts at a minimum of $2,500 and can go as high as $7,500. How much you can get depends on factors like the battery capacity, gross vehicle weight rating, and OEM. Below, you can learn more about the electric car tax and why should you buy an electric car. For more information on Kia EVs, be sure to check out our Kia research hub!
Contrary to what some shoppers believe, the electric car tax credit doesn’t apply to all electric vehicles. You may be able to earn this credit when you buy a qualified new EV after December 31, 2009. What’s more, an EV that qualifies for the electric car tax credit should also meet the following qualifications:
If you’re interested in a plug-in or battery EV, keep in mind that the model you’re considering must be built by a qualified manufacturer to be eligible for an electric car tax credit. The vehicle must also have a battery pack rated for four kWh (at minimum) of energy storage and can be recharged using a plug or charging station.
After you’ve confirmed that the model you’re interested in qualifies for the electric car tax credit, you’ll want to make sure the credit can be applied to your taxes. Keep in mind that this credit is only available to car buyers. If you lease, the credit won’t go to you; it’ll go to the lending institution that owns the car. If you’re asking, “Why buy an electric car?”, access to the tax credit is even more incentive!
How does the federal tax credit for electric cars work after a certain number of cars have been sold? Well, the electric car tax credit stops at a certain point. After a car manufacturer has sold 200,000 eligible EVs or plug-in electric cars, the credit will phase out. Beyond this point, buyers won’t be able to claim the tax credit on certain models that have reached this limit. Tesla and General Motors EVs, for example, don’t qualify for the tax credit because they’ve sold 200,000 of each model. Be sure to check the list of qualifying manufacturers from the IRS before you buy an EV.
So, why should you buy an electric car? In addition to the environmental benefits, EVs can save you money on your taxes, as well as gas, maintenance, and more. Do you have your eye on a specific Kia EV, such as the Kia Niro EV or Kia EV6? Contact us online or call us at 833-756-7614 to learn more about the electric tax credit and how it applies to our EVs. We can also help you schedule a test drive near Durham and Apex!
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