Starting Jan. 1, many Americans will qualify for a tax credit of up to $7,500 for buying an electric vehicle. The credit, part of changes enacted in the Inflation Reduction Act, is designed to spur EV sales and reduce greenhouse emissions. But a complex web of requirements, including where vehicles and batteries must be manufactured to qualify, is casting doubt on whether anyone can receive the full $7,500 credit next year.
For at least the first two months of 2023, though, a delay in the Treasury Department’s rules for the new benefit will likely make the full credit temporarily available to consumers who meet certain income and price limits.
The credit of up to $7,500 will be offered to people who buy certain new electric vehicles as well as some plug-in gas-electric hybrids and hydrogen fuel cell vehicles. For people who buy a used vehicle that runs on battery power, a $4,000 credit will be available. But the question of which vehicles and buyers will qualify for the credits is complicated and will remain uncertain until Treasury issues the proposed rules in March.
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