As the world continues to look towards green solutions, electric vehicles (EVs) have become increasingly popular in the world of transportation. To encourage the purchasing of EVs and promote sustainability, the United States government is offering tax credits to qualifying businesses and individuals.
If you’re looking for El Paso tax preparation services as the new tax season approaches, look no further than Marcus, Fairall, Bristol, & Co. Contact us online or call (915) 775-1040 to learn more today.
What is an EV Tax Credit?
An Electric Vehicle Tax Credit is a tax credit provided by the government to encourage the purchase of EVs. It serves as a rebate on taxes owed. By reducing the upfront cost of EVs, these credits aim to make them more accessible and affordable.
What Cars Qualify?
Not all electric vehicles qualify for tax credits, and eligibility criteria may vary. Qualifying vehicles typically need to meet specific criteria set by the IRS. Generally, eligible vehicles must be powered primarily by an electric motor that draws electricity from a battery, have a battery capacity of at least 4 kWh, and be manufactured by an eligible manufacturer.
Some examples of qualifying EV vehicles are: 22-23 Chevrolet Bolt eV/EUV, 22-24 Chrysler Pacifica PHEV, 22-24 Ford F-150 Lightning (Extended and Standard), 23-24 Telsa Model 3 Performance, Model X Long Range, Model Y AWD/Performance, 24 Model Y RWD.
How the EV Tax Credit Works
The EV tax credit works as a non-refundable credit, meaning it can reduce your tax liability but cannot result in a refund if the credit exceeds your tax liability. When you purchase an eligible electric vehicle, you can claim the tax credit on your federal income tax return for the year the vehicle was purchased.
The amount of credit varies depending on factors like the manufacturer and battery capacity. Typically, the maximum credit allowed is capped, ranging from $3,750 to $7,500. If your tax liability is less than the maximum credit, you can only claim up to the amount of taxes owed.
How to Claim an EV Tax Credit
El Paso tax preparation services can help you navigate the tediousness of filing taxes. However, it’s a relatively simple process. First, determine if the vehicle you purchase qualifies for the tax credit based on its eligibility criteria. Obtain the necessary documentation that confirms the vehicle’s eligibility, this typically comes from the manufacturer. Complete the IRS Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-in Electric Vehicles) with your tax return. You will need to provide your vehicle’s VIN. Submit by the applicable deadline to ensure you receive the tax credit.
Professional Tax Preparation Services in El Paso
Marcus, Fairall, Bristol, & Co. can help you prepare for this year’s tax season by organizing and filing on your behalf. If you’ve purchased an electric vehicle this tax year, you’re in luck! Maximize your tax savings and call (915) 775-1040 to schedule an appointment today.