How Does the Federal Tax Credit for Electric Cars Work?

If you’ve been searching for a new electric vehicle to purchase to enhance your Waterloo drives, you may have heard about the federal tax credit. What is the electric car tax credit for Illinois drivers? The Illinois electric car tax credit starts at a minimum of $2,500 and goes up to $7,500 based on the car’s traction battery capacity and gross vehicle weight rating. By purchasing a new EV, you can earn this credit. Just one of the many reasons why Waterloo drivers are opting for an electric car. Learn more about which models qualify with our guide below. Feel free to contact us with any questions.

Which Models are Applicable for this Electric Car Tax Credit?

While many Mascoutah drivers believe that every EV can earn this electric car tax credit, that’s not the case. You can earn this credit when you buy a qualified new EV after December 31, 2009. Aso, the qualifying EV must meet the following criteria:

• Draws propulsion using a traction battery that has at least 5 kilowatt-hours (kWh) of capacity
• Uses an external source of energy to recharge the battery
• Has a gross vehicle weight rating (GVWR) of up to 14,000 pounds
• Meets specified emission standards
• Has to be mostly driven in the United States

Check out this tool to get an estimate of the credit for the Ford vehicle that you’re considering for your Columbia drives. If you have your eyes on a plug-in or battery EV, keep in mind that the model has to be built by qualified manufacturers to earn the max electric car tax credit of $7,500. The battery packs also have to be rated for at least 4 kWh of energy storage and can be recharged from an external source.

Am I Eligible for the Federal Electric Car Tax Credit?

After you’ve chosen your next EV vehicle, you’ll want to make sure that the credit can be applied to your taxes. This Illinois electric car tax credit is only available if your purchase the vehicle. If you opt for a lease, the credit goes to the lending institution since they technically own it.

Next, consider how much you’ll owe in income tax for that year. This is key because it caps how much of the tax credit you can get. So, if you purchase an EB eligible for $7,500 and owe $3,000 in income tax, you can only earn $3,000 of the credit. You can only get the entire electric car tax credit if you owe at least $7,500 in income tax the year you purchased the vehicle.

Finally, remember that you can’t pass on the tax credit to someone else if you decide to sell the vehicle. Only the registered owner can claim the credit.

How Long Will the Federal Electric Car Tax Credit Be Available?

Because more electric models are being released, this tax credit will come to a stop at a certain point. When a manufacturer sells 200,000 eligible plug-in electric models or EVs, the credit will then phase out after the second quarter. View the list of qualifying manufacturers from the IRS.

Learn More About the Electric Car Tax Credit in Illinois!

If you have any additional credits on how the Illinois electric car tax credit works, feel free to contact the finance department at Auffenberg Ford South Belleville! Our team is also here to walk you through the car buying process and help you find the new electric car better suited for taking on your East Saint Louis drives.