Inflation Reduction Act -Vehicle Tax Credit

The Inflation Reduction Act (IRA) was enacted August 16, 2022. This extended and increased many of the tax credits related to green energy such as solar panel, charging station, and electric vehicles over the next 10 years.

The IRA removed the current limitation related to electric vehicles which began to reduce the $7,500 tax credit once a manufacturer sold 200,000 of that vehicle model. The law also imposes some income limit restricts on the electric vehicle tax credit. The IRA also created a tax credit for used electric vehicle purchases if the vehicle costs less than $25,000 and the vehicle is more than two years old. Qualified commercial vehicles purchased after December 31st, 2022 are now also eligible for a credit of up to $7,500 for vehicles weighing less than 14,000 pounds or $40,000 for those weighing 14,000 pounds or more.