LAUREN MCCAY: All right, so you're in the market for an EV,
hoping for a tax credit.
It used to be get a nice fat $7,500 check for one.
Now, it's a bit different.
You might have heard of the new changes
to the federal tax credit.
And I know, it can get pretty confusing
trying to sift through all the minutia.
No worries, that's why I'm here.
In this video, I'm going to break down the seven most
important things you need to know,
and if you want to know specifically if you personally
qualify, well, you got to stick around
and I'll let the number one deciding factor.
But first, make sure you like and subscribe to our channel,
and be sure to visit edmunds.com to find your next car.
Also, if you want to read a bit more in depth on this topic,
click the link below for our full article.
OK.
First off, what's up with the new changes to the law anyway?
The federal government clearly wants
to promote the production and sale of affordable EVs,
as well as strengthen our regional EV supply chain.
And of course, it helps, because EVs are so expensive.
The downside, the new legislation
will eliminate many EVs and plug-in hybrid EVs,
or PHEVs that used to qualify for an electric car tax credit,
at least for right now.
That said, let's talk about the first thing
you need to know on our list.
Of course, it'd be easy if the federal government just lumped
every EV together and made their changes.
But no, that would be a fantasy world.
First things first, you must know
that as of the start of next year,
these price limits for new vehicles
will take effect immediately.
But if your fantasy EV is less than those amounts, good news,
your car is still eligible, and you
can treat yourself, treat yourself, as long
as you personally qualify.
And that of course, I'm withholding until the end.
[EVIL CACKLE] If you really want to find your specific car,
the US Department of Energy has the entire list,
and you can sift through them all on their website
by manufacturer and model.
The second most important thing you
need to know that's already gone into effect
since this past August is that all qualifying vehicles
must be assembled in North America,
no matter the model year.
All right, this one seems like a no-brainer,
like what your family probably says about
all your family secrets.
Shh, let's just brush it under the rug
and keep it all at home.
But unlike previous years, the size of the battery
no longer dictates how much of the credit you get.
It's more about where the battery and its parts
came from.
Critical battery minerals, meaning,
it must be recycled, extracted, or processed in the US,
and battery components, meaning, it
has to be manufactured or assembled in the US.
You'll get the full credit if certain percentages
of your battery fits into one of those two categories,
and half for each.
Now, there are a handful of new EVs that qualify for the credit
at least until the end of this year.
So basically, you better watch this, and then head
to the showroom you want like ASAP.
These cars have made the list because they
are or will be assembled in the US,
from the BMW X5 Plug-In Hybrid, and Ford Mustang Mach-E,
to the Lucid Air, there's quite a bit of variety.
The link below has all the choices listed.
And just to be clear, the Lucid qualifies for now.
But starting in 2023, it will be too expensive for the sedan
limitation.
So keep that in mind.
So what about used EVs?
Do they count?
Well, kind of, which is still good news, because last year,
used EVs weren't even in the mix.
First off, there is a price limit
capping any used EV at $25,000.
Meaning, you had to pay that amount total or less
to qualify.
And it has to be at least two-years-old.
Also, it's about the way you file your taxes,
you know, single, or married with dependents.
Don't worry, I'll be checking the single box.
Anyway, the way you file and your modified adjusted
gross income will determine if you're
even eligible for your used EV.
Also, it must be purchased at a dealership,
and can only be for personal use.
OK, OK, I know what you may be thinking,
so if you purchase an eligible EV, or PHEV
before this past August, is your tax credit still legit?
Well, that's actually the next most important thing
you need to know.
The answer is yes.
But if you bought it before August, and say,
it doesn't get delivered until after the new year,
you'll need a written binding sales
contract prior to August 16 in order to get that tax credit.
If you are leasing the EV, the tax credit
goes to the manufacturer that's offering the lease,
not you, which honestly, is always how it's been.
The sixth and almost final thing you should know
is now that the Inflation Reduction
Act has been signed into law, the North American Final
Assembly requirement and buyer income limit
will immediately apply through the rest of 2022.
Unfortunately, this will greatly reduce the pool of vehicles
to choose from.
But if you're watching this in 2023,
the battery sourcing rules will already be in effect,
and we'll have a better idea of which vehicles will qualify.
All right.
You waited through this whole video for me
to tell you the last and final thing you need to know,
and it's the deciding factor.
Now, I have to get a bit personal here,
how much do you make?
I know, I know, it's a terrible question to ask,
but in this case, it's important.
It's really all about how you file your taxes.
Remember, single.
So if you're checking that same box, which I don't know,
maybe call me later, it actually means your gross income
can't exceed 150,000.
Head of the household, yours caps at 225,000.
And you joint return folks, well, you
can just forget about it after 300,000.
There it is, everything you need to know.
Now, keep in mind, as of this recording,
the Department of Treasury still needs
to set its final guidelines, so the list of eligible vehicles
may change in 2023.
Check out the link below for those updates and a more
in-depth look on all I told you about today.
Did you know we have a top 10 for every category?
So check out edmunds.com no matter
what kind of car, truck, or SUV you're searching for.