preloader icon

Apex Trader Funding (ATF) - News

Barron's Confused About EV Tax Credits? Read This.

Snagging federal subsidies for your EV isn’t easy.

The electric-vehicle tax credit is one of the juiciest available to taxpayers on their 2023 returns, but if you bought an EV or plug-in hybrid last year your ability to claim this benefit isn’t a slam dunk.

A web of new and often confusing eligibility requirements was passed under the Inflation Reduction Act in late 2022 and went into effect last year.

The new rules got rid of an older provision that only allowed the credit for the first 200,000 models sold of any qualifying vehicle and nixed the benefit for many buyers of popular Tesla, General Motors and Toyota models.

Now whether you can claim some or all of the $7,500 credit will depend on your income, various vehicle and battery details, and when you took possession of your electric car, SUV or truck. 

“If you’re an EV customer I can only imagine how confusing this can feel,” says Ronald Montoya, senior consumer advice editor at Edmunds.

To be eligible for the 2023 credit, you must have taken possession of the vehicle in 2023, but it isn’t enough to simply note your year of possession, Montoya says.

The size of the credit may be different depending on whether you took possession before or after April 18 of last year when new rules kicked in. 

If you purchased an electric vehicle in 2023 but it wasn’t delivered until this year, you will have to wait until next year to claim the credit on your 2024 taxes. 

The credit is potentially only available for buyers of new or used EVs or plug-in hybrids. If you leased a model, you can’t qualify for a tax credit—only the financing company may be eligible.