{"id":1820,"date":"2022-08-27T05:23:39","date_gmt":"2022-08-27T09:23:39","guid":{"rendered":"https:\/\/www.saudercpa.com\/blog\/?p=1820"},"modified":"2022-08-26T07:34:14","modified_gmt":"2022-08-26T11:34:14","slug":"2022-inflation-act-electric-vehicle-tax-credits","status":"publish","type":"post","link":"https:\/\/www.saudercpa.com\/blog\/2022\/08\/27\/2022-inflation-act-electric-vehicle-tax-credits\/","title":{"rendered":"2022 Inflation Act: Electric Vehicle Tax Credits"},"content":{"rendered":"

Preface: Californians can keep driving and buying gas-powered vehicles after 2035, but no new models will be sold in the state thereafter.<\/em><\/p>\n

2022 Inflation Act: Electric Vehicle Credits<\/strong><\/p>\n

SACRAMENTO, Calif. (AP) [August 26, 2022] \u2014 California set itself on a path Thursday to end the era of gas-powered cars, with air regulators adopting the world\u2019s most stringent rules for transitioning to zero-emission vehicles.<\/em>
\nThe move by the California Air Resources Board to have all new cars, pickup trucks and SUVs be electric or hydrogen by 2035 is likely to reshape the U.S. auto market, which gets 10% of its sales from the nation\u2019s most populous state.<\/em>
\nBut such a radical transformation in what people drive will also require at least 15 times more vehicle chargers statewide, a more robust energy grid and vehicles that people of all income levels can afford.<\/em><\/p>\n

\u201cIt\u2019s going to be very hard getting to 100%,\u201d said Daniel Sperling, a board member and founding director of the Institute of Transportation Studies at the University of California, Davis. \u201cYou can\u2019t just wave your wand, you can\u2019t just adopt a regulation \u2014 people actually have to buy them and use them.\u201d<\/em>
\nOther states are expected to follow, further accelerating the production of zero-emissions vehicles.<\/em><\/p>\n

Washington state and Massachusetts already have said they will follow California\u2019s lead and many more are likely to \u2014 New York and Pennsylvania are among 17 states that have adopted some or all of California\u2019s tailpipe emission standards that are stricter than federal rules. <\/em>
\nhttps:\/\/apnews.com\/article\/technology-california-air-resources-board-climate-and-environment-dc75c11280f85a8ab134cf392497be68<\/em><\/p>\n

The 2022 Inflation Act signed into legislation includes extension and modification to tax credits for electric vehicles.<\/p>\n

The credit for the purchase of new electric vehicles (which includes both plug-in electric vehicles and fuel cell vehicles) is extended through 2032, and modified, under the 2022 Inflation Act. The 2022 Inflation Act eliminates the current credit\u2019s limitation on the number of vehicles produced by a specific manufacturer.<\/p>\n

A new credit of up to $4,000 is also available for the purchase of a previously owned clean vehicle,<\/em> subject to income limitations, through 2032. The 2022 Inflation Act also includes a new credit for up to 30 percent of the basis of a qualified commercial clean vehicle acquired after 2022 and before 2033.<\/p>\n

New Clean Vehicle Credit<\/strong><\/p>\n

The credit for new qualified plug-in electric drive motor vehicle credit is restructured as a maximum credit of $7,500 for a new clean vehicle. The new clean vehicle credit generally applies to vehicles placed in service after December 31, 2022.<\/em> Only one credit is allowed once with respect to any vehicle, as determined based on its vehicle identification number (VIN), including any vehicle with respect to which the taxpayer elects to transfer the credit to an eligible entity.<\/p>\n

The credit imposes sourcing requirements on the critical components of the vehicle and battery systems.<\/strong> The maximum amount of the credit remains at $7,500, but includes income limitations, as well as limitations on the manufacturer\u2019s suggested retail price.<\/em><\/p>\n

Taxpayer adjusted gross income price caps.
\nThe threshold amounts are:<\/p>\n