The Electric Vehicle Tax Credit: How Electric Vehicle Owners Can Reap the Benefits of the Inflation Reduction Act

UJ Alexander /

Electric vehicle owners can reap the benefits from the stunning climate change and healthcare deal struck last week between Senator Joe Manchin and Senate Majority Leader Chuck Schumer for the Anti-Inflationary Inflation Reduction Act of 2022.

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The law would extend $7,500 in tax credits to electric car owners, but it would cap salaries. For the combined proceeds, it would be $150,000, for the head of household it would be $112,500, and for a single taxpayer it would be $75,000, according to the body of the invoice.

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For electric car companies under current law, there is a vehicle sold limit of 200,000 cars that credit can apply to, and Toyota was the latest automaker to pass it on in July. Under the new law, the hood will be removed, something many automakers have been pushing for.

In June, several CEOs — GM’s Mary Barra, Ford’s Jim Farley, Stellantes’ Carlos Tavares, and Tetsuo Ogawa of Toyota North America — wrote a letter to Congress calling for the cap to be raised, claiming that eliminating it would “stimulate the consumer.” on the adoption of electric vehicles in the future. options and provide much-needed certainty to our customers and local workforce,” GOBankingRates previously reported.

“We continue to hope that Congress will introduce legislation to address energy security and the economy that includes an amendment to the electric vehicle tax credit with the removal of the individual[automaker] Cap,” GM spokesman Matt Ybarra told CNN. We will review the draft text and look forward to working with Congress on these provisions that will ensure a level playing field for all. [automakers]. “

Additionally, under the Inflation Reduction Act, used car buyers can receive a $4,000 credit. However, the selling price of the car could not exceed 25 thousand dollars, according to the text of the invoice.

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Finally, the crucial change will be that electric vehicle buyers won’t have to wait until they file their taxes to get the tax credit, according to Sam Abu Alsamed, electric vehicle analyst at Guidehouse Insights. The credit will be applied at the time of purchase with the merchant.

“By removing it from the top, you can actually lower your monthly payments,” he told CNN.

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About the author

Yael Biswati Kennedy is a full-time financial journalist with numerous publications, including Dow Jones, Financial Times Group, Bloomberg and Business Insider. She has also worked as Vice President/Senior Content Writer at major New York City-based financial firms, including New York Life and MSCI. Yael She now works independently and most recently co-authored the book “Blockchain for Medical Research: Accelerating Trust in Healthcare” with Dr. Sean Manion. (CRC Press, April 2020) She holds two MAs, one in Journalism from New York University and one in Russian Studies from Toulouse Jean Jaures University, France.

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