Latest news with #CleanVehicleCredit
CNBC
09-07-2025
- Automotive
- CNBC
You have less than 3 months to claim the $7,500 EV tax credit: 'Now is the time to buy,' says car expert
If you're planning to buy an electric vehicle, time is running out to claim a federal tax credit worth up to $7,500. The Clean Vehicle Credit, overhauled and extended through 2032 as part of the Inflation Reduction Act, will now end after Sept. 30 under President Donald Trump's "big beautiful" tax-and-spending package, meaning potential buyers have just a few months to act before the credit is discontinued. The credit can shave thousands off the price of both new and used electric vehicles. For buyers already in the market, now is the time to buy," says Stephanie Valdez Streaty, director of industry insights at Cox Automotive. With the deadline approaching, dealers might try to create a sense of urgency by offering stronger incentives to close sales, she says. Manufacturer incentives already averaged 14.2% of the average transaction price for new EVs in May — the highest level since 2018, according to Cox's sales data — driven in part by excess inventory. The Clean Vehicle Credit can take up to $7,500 off the cost of a new electric vehicle — or $4,000 off a used one — but qualifying isn't as straightforward as it once was. While the income limits and vehicle price caps have remained the same since 2023, the number of qualifying models has shrunk as battery and sourcing requirements have ramped up — a phased tightening that was built into the law. The rules are complicated and worth reading about further, but broadly speaking, you qualify for the credit based on the following criteria: Because of the sourcing rules, eligibility often comes down to specific details about the car, such as the trim level and optional add-ons, which can push the price over the limit. "[Make sure] that specific trim level you want is eligible and is still under that threshold of $80,000," says Valdez Streaty, who recommends researching qualifying vehicles before buying. Fortunately, a change in 2024 made it a little easier to confirm eligibility. The credit became available at the point of sale, applied directly as a discount off the purchase price, rather than requiring you to claim it later by submitting a form with your tax return. Registered dealers are required to check the vehicle's eligibility through the Internal Revenue Service's system before completing the sale. However, it's still up to the buyer to make sure they meet the income requirements — if you claim the credit and don't qualify, you'll have to pay it back at tax time. Another option is leasing, which is often cheaper than buying, though you won't own the car at the end of the term and most leases come with annual mileage limits. But with EVs, leasing can offer even more value. EVs leased through dealers are treated as commercial vehicles, which means the dealer qualifies for the full $7,500 credit without the usual restrictions on battery sourcing or buyer income. Because of that, dealers can pass along the savings in the form of lower monthly payments or upfront discounts. "That's why it's so popular," Valdez Streaty says, noting that EV lease rates jumped from around 15% in 2022 to 67% by March 2025, according to Cox data. "You can buy any vehicle, no matter how much you make, that potentially gets that full $7,500 off."
Car and Driver
23-05-2025
- Automotive
- Car and Driver
New Republican Tax Bill Could Devastate EV Sales by Removing Incentives
A new Republican tax bill passed by the U.S. House on Thursday under the name "One Big Beautiful Bill Act" has the potential to devastate electric vehicle sales in the U.S. The bill now goes up for a vote in the Senate at an as yet unannounced time. If passed into law, the bill would gut subsidies for battery manufacturing and would remove incentives for purchasing plug-in hybrid and electric cars. The bill would also impose new registration fees of $100 and $250 on hybrid and electric cars, respectively. After months of stating the intention to remove clean-vehicle tax credits, Republican House members have passed a version of President Donald Trump's "One Big Beautiful Bill Act" that could potentially decimate electric vehicle sales in America. If passed into law, the bill would cut subsidies for battery manufacturing and remove incentives for purchasing electrified vehicles. Hyundai 2026 Hyundai Ioniq 9. Specifically, the bill would phase out the Clean Vehicle Credit, first put in place under President Barack Obama and expanded in the Biden administration through the Inflation Reduction Act. Currently, buyers of hybrid and electric cars can get $7500 off qualified new vehicles with restrictions based on vehicle price and household income. Jack Fitzgerald Associate News Editor Jack Fitzgerald's love for cars stems from his as yet unshakable addiction to Formula 1. After a brief stint as a detailer for a local dealership group in college, he knew he needed a more permanent way to drive all the new cars he couldn't afford and decided to pursue a career in auto writing. By hounding his college professors at the University of Wisconsin-Milwaukee, he was able to travel Wisconsin seeking out stories in the auto world before landing his dream job at Car and Driver. His new goal is to delay the inevitable demise of his 2010 Volkswagen Golf. Read full bio
Yahoo
06-05-2025
- Business
- Yahoo
Do Higher Earnings Mean You'll Take Home Less Because of Taxes?
Many workers worry that earning more, through a raise or bonus, could push them into a higher tax bracket and actually reduce their take-home pay. Learn More: Trump Wants To Eliminate Income Taxes: Here's What That Would Mean for the Economy and Your Wallet Find Out: The New Retirement Problem Boomers Are Facing However, that fear is based on a common misunderstanding of how the U.S. tax system works. Do higher earnings mean you'll take home less because of taxes? Here's what you need to know about how tax brackets impact your take home pay. The Myth Many people believe that earning more money, through a raise or bonus, could actually cause them to lose money after taxes. This widespread misconception stems from confusion about how tax brackets actually apply to income. 'Many people have a misconception or 'fear' of even jumping a tax bracket due to a misunderstanding of how progressive tax systems work,' said Nicolette Davicino, a certified financial planner and financial advisor at Armstrong, Fleming & Moore. For You: Here's How Much Your State Collects on Every Type of Tax Davicino explained, 'Many people think that moving into a higher tax bracket means their entire income will be taxed at that higher rate, which would reduce their pay and mean they take home less pay. In reality, only the portion of income within the higher bracket will be taxed at the new rate.' How U.S. Tax Brackets Really Work The U.S. tax system uses marginal tax rates, which means only the income that falls within each bracket is taxed at that bracket's rate. This ensures that earning more will never reduce the after-tax income. 'To the extent that their taxable income now exceeds $47,150 for 2025, the amount over $47,150 is taxed at the much higher 22% tax rate,' said Mark Luscombe, principal analyst at Wolters Kluwer Tax & Accounting. 'The rest of the taxpayer's income remains taxed at the lower 10- and 12% tax rates.' Luscombe added that bonuses are often subject to higher withholding, which can make the take-home seem smaller at first. But this doesn't mean individuals are taxed more on all of their income, just on the portion above the bracket threshold. What About Bonuses? A raise or bonus can push a portion of a taxpayer's income into a higher tax bracket, but only that portion is taxed at the new, higher rate. The remainder of their income continues to be taxed at lower rates, so their overall take-home pay still increases. For example, Luscombe said a taxpayer with a modified adjusted gross income of $147,000 who receives a $5,000 bonus in 2025 would not move into a higher tax bracket. However, their total income could exceed eligibility for other tax credits like the Clean Vehicle Credit, which has a $150,000 cap for individuals.
Yahoo
01-04-2025
- Automotive
- Yahoo
Senator Paul introduces bill to end taxpayer subsidies for EVs
HENDERSON, Ky. (WEHT) – U.S. Senator Rand Paul introduced the 'End Taxpayer Subsidies for Electric Vehicles Act.' The End Taxpayer Subsidies for Electric Vehicles Act would eliminate government subsidies, allowing the electric vehicle (EV) market to compete on a 'level playing field' while saving taxpayers billions of dollars. 'For too long, the federal government has picked winners and losers in the auto industry, forcing hardworking Americans to subsidize expensive electric vehicles that many cannot afford,' said Sen. Paul. 'The 'End Taxpayer Subsidies for Electric Vehicles Act' restores competition in the EV market by ending taxpayer-funded handouts.' Illinois, Kentucky and other states sue HHS, RFK Jr. over public grant cuts Sen. Paul says these are the key provisions of the act: Cuts federal spending Eliminates the Clean Vehicle Credit, saving billions and reducing the national debt. Boosts market competition Encourages automakers to innovate and cut EV costs without taxpayer-funded incentives. Ensures tax fairness Prevents subsidies that mainly benefit the wealthy, protecting lower and middle-income taxpayers. Supports auto and energy jobs Levels the playing field for gas, hybrid, and EV markets while preserving industry jobs. People can read the act below. End-Taxpayer-Subsidies-for-Electric-Vehicles-ActDownload 'Eyewitness News. Everywhere you are.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
