By Wiss Associate
Have you recently purchased an electric or hybrid car? If so, you may be eligible for a significant tax credit. Consumers of these energy-friendly vehicles can benefit from a tax break of $2,500 to $7,500, contingent on two essential factors: a car’s battery size and the amount of income taxes you owe during a specific year. Contrariwise, vehicles that have 4 kWh batteries can be eligible for a $2,500 tax benefit.
In order to stay informed on the complex rules of this federal tax credit, make sure you understand the following specifications:
- Battery-electric and plug-in vehicles should be constructed by authorized manufacturers and have batteries rated no less than 4kWh of energy storage that can charge from an external source.
- If your truck or car is leased, the credit will remain with the leasing corporation or the real owner of your vehicle. Nonetheless, frequently, the benefit has already been added to the price of the lease, so the buyer can still profit from the credit.
- The tax credit is not applicable to vehicles purchased for the intention of reselling and must be mainly operated in the United States.
- According to the IRS, manufacturers do not have to prove that their energy-efficient cars meet the necessary requirements to qualify for the benefits. If your vehicle is not found on the Energy Department’s website or IRS’ list of eligible cars or trucks, you can rely on the manufacturer’s statement on the vehicle’s validity, found on their website or in writing.
Take note that some of these credits can run out and might have already expired. A financial advisor can assist you in developing an infallible system for monitoring your expenses and keeping up with amended or novel tax credits. To see if your vehicle is authorized for this tax break, visit the website of the Department of Energy: https://www.fueleconomy.gov/feg/taxevb.shtml
If you would like more information on this topic, contact us today at 973-994-9400 or at hello@wiss.visioncreativegroup.com.