How the Presidential Election could Impact Tax Credits

 The results of the recent Presidential election could bring significant shifts in federal support for electric vehicles (EVs), renewable energy systems, and energy-efficient home upgrades like rooftop solar & heat pumps. The incoming administration is expected to begin revisiting policies established under the Inflation Reduction Act (IRA) early in their term. This could mean swift action aimed at reducing or dismantling tax credits that currently encourage clean energy purchases and installations.

If the IRA tax credits are key to your plans for an EV, rooftop solar, or other energy efficiency upgrades, now is the time to act. Consider finalizing any purchases and installations before December 31, 2024, to ensure they fall within the 2024 tax year. We’ve seen significant support through these credits to help make EVs and renewable energy more affordable, but some of these options may no longer be available or could be subject to court reviews or budget restrictions moving forward.

What Can Be Affected?
The tax credits currently incentivize:

• Electric Vehicle Purchases: Credits for new and some used EVs, which have reduced upfront costs for buyers.
• Rooftop Solar Systems: Support for home solar installations, enabling more households to adopt clean energy.
• Home Energy Efficiency: Heat pumps, home insulation, and other energy-efficient home upgrades that reduce carbon footprints.

What You Can Do Now:

• Finalize Purchases: Make any major sustainability-related purchases by December 31, 2024, if you want to claim tax credits under the current rules.
• Research Available Credits: Ensure you are fully aware of which incentives apply to your purchase. Many tax credits are item-specific, so double-check the requirements and eligibility.
• Contact Your Tax Professional: If you have any uncertainties, consult with a tax advisor about how to make the most of available credits in 2024.
  

If you'd like more resources on the potential impacts of this transition or have questions about timing your EV or renewable energy purchase, please reach out to us, and we'll do our best to connect you with the latest information and support options.

The Inflation Reduction Act of 2022 (IRA) changed the eligibility rules and potential credit amounts available on clean vehicle tax credits across the board.

The U.S. Treasury Department and IRS has released updated guidance on clean vehicle purchases and how the new Inflation Reduction Act applies to tax credits multiple times:

- Clean Vehicle Tax Credits must now be initiated and approved at the time of sale (at dealership)

- Taxpayer income (AGI) limits now apply ($300k Joint/Survivor, $225k Head of House, $150k all others)

- Vehicle MSRP caps have changed (Truck/Van/SUV is $80k, All other passenger vehicles is $55k)

- Vehicle weight maximum (14,000 lbs.) and 7kWH battery minimum required

- Final vehicle assembly location requirement applies (VIN Lookup Tool:  VIN Decoder | NHTSA )

- Critical mineral battery requirements have been established

- Dealership time of sale "seller report" requirements have been established, buyers must keep to file taxes

- Eligible EV Models have been updated, and credits have been changed

Purchasing a New or Used Clean Vehicle IN 2024?  Find more tax credit info here:

https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after 

A Dealership-only Used EV Tax Credit has been introduced with lesser requirements than the New EV credits:

https://www.irs.gov/credits-deductions/used-clean-vehicle-credit

One Pager Checklist for  NEW EV Federal Credits:   Publication 5866 (10-2023) (irs.gov) 

One Pager Checklist for USED EV Federal Credits:   Publication 5866a (01-2024) (irs.gov) 

Cash on the hood is now available for your New or Used EV purchase at a dealership.  

More info on the specifics here:  Publication 5899 (12-2023) (irs.gov) 

Looking for information on vehicle eligibility?  Find out more here or check out the PDF below:  https://fueleconomy.gov/feg/tax2023.shtml

Additional links to EV purchases are posted in the Useful Links section below.

Have a resource you would like us to consider adding?  Send it to us at info@DriveElectricColumbus.com