US Tax Credit Scheme for Electric Vehicles


    In News

    • Starting January 1, many Americans will qualify for a tax credit of up to $7,500 for buying an electric vehicle (EV).

    About Tax Credit Scheme

    • About:
      • A 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. 
      • The new tax credit will last until 2032.
      • It is a part of changes enacted in the Inflation Reduction Act.
      • The new law also provides a smaller credit for people who buy a used EV.
    • Eligibility to Get Credit:
      • It will depend upon different income criteria for new EVs and used EVs.
    • How Credit will be Paid:
      • At first, it will be applied to the 2023 tax return, which is filed in 2024. 
      • Starting in 2024, consumers can transfer the credit to a dealership to lower the vehicle price at purchase.
    • Benefits:
      • It is designed to reduce greenhouse emissions.
      • It is intended to make zero-emission vehicles affordable to more people.

    Source: IE