When going over the reasons for EV ownership, saving money is at the top of your list because refueling costs are lower. However, you could save even more money with a purchase in the coming years for Appleton drivers.
Your purchase may qualify for a $7,500 federal tax credit when you buy a Jeep Wrangler 4xe or Jeep Grand Cherokee 4xe plug-in hybrid vehicle (PHEV). Find out more with our guide from the staff at Kolosso CDJR, where we give you another answer to, "Why buy an electric car?"
How Does the Federal Tax Credit for Electric Cars Work for Your Purchase?
The federal tax credit starts at a minimum of $2,500 and can go up to $7,500, depending on the car's traction battery capacity and gross vehicle weight rating. This is yet another reason to invest in an EV to put in your Green Bay garage.
Why should you buy an electric car? The federal government is making these new vehicles cheaper.
Which Vehicles Are Applicable for the Full Electric Car Tax Credit?
A 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
- The MSRP can't exceed $80,000 for vans, SUVs, and pickup trucks
- The MSRP can't exceed $55,000 for other vehicles
Use this tool for an estimate of the credit for the model that you're considering for your Green Bay commutes.
Starting in 2023, you can get up to $4,000 for a tax credit on used EVs, limited to 30% of the vehicle's purchase price with at least 7 kWh of battery capacity. The overall goal is to lower carbon emissions and reduce dependence on fossil fuels to make vehicle ownership more affordable.
Want to wait to buy an EV? You've got even better news in 2024. Rather than take the tax credit with their income tax returns filed every year, the tax credit transfers to the dealer on January 1, 2024. When the calendar turns to the new year, the dealer will reduce the price of the EV by $7,500 at the time you make the purchase. You can benefit from a lower loan amount and better financing terms because your overall loan will be $7,500 less than what the sticker price is!
Am I Eligible for the Federal Electric Car Tax Credit?
You've checked that the model you want qualifies for this tax credit. Now, you'll need to see if the credit can be applied to your federal income tax return. First, remember that this tax credit is only available if you buy the vehicle.
Then, consider how much you will owe in income tax for that year. This amount is key because it caps how much of the tax credit you can get. For example, if you buy an electric model eligible for the full $7,500 and you owe $3,000 in income tax, then your $3,000 tax bill will be reduced to zero. The tax credit will reduce your tax bill as opposed to giving you money as a refund for your 2023 income tax return. However, that will change in 2024 as we mentioned earlier.
How Long Will the Federal Electric Car Tax Credit Be Available?
When the Inflation Reduction Act of 2022 was passed in the United States, Americans became eligible for these tax credits until 2032. So, look to save as much as $7,500 on your purchase of new EVs when you shop for one starting in 2024! With more and more public charging stations coming online in and around Appleton, you won't have to worry about range anxiety in our area!
Why Buy an Electric Car in Appleton?
Why should you buy an electric car? We've listed several reasons! Contact us or call 920-666-7994. if you have questions or want to schedule a test drive. We're happy to help in any way we can!