Federal Tax Rebates for New Ford Electric Vehicles

According to Internal Revenue Code Section 30D, you may be qualified for a clean vehicle tax credit of up to $7,500 if you purchase a new qualified plug-in electric vehicle (EV) or fuel cell vehicle (FCV) on January 1st, 2023, or later, and you meet specific income requirements.

The New Ford Electric Vehicles listed below are currently eligible for a credit as long as certain conditions are satisfied. Click here to see the complete Manufacturers and Models for New Qualified Clean Vehicles list from the IRS.

• 2022 Ford Escape Plug-In Hybrid
• 2023 Ford Escape Plug-In Hybrid
• 2022 Ford E-Transit
• 2023 Ford E-Transit
• 2022 Ford F-150 Lightning
• 2023 Ford F-150 Lightning
• 2022 Ford Mustang Mach-E
• 2023 Ford Mustang Mach-E

The makes and types of vehicles that are listed below are not necessarily eligible. Additionally, they must have been put together in North America. Additionally, the MSRP cannot be more than $80,000. You can learn where your vehicle was manufactured with just the VIN (Vehicle Identification Number). Click here to learn where your vehicle was assembled.

Rules and Requirements for Clean Vehicle Purchases with the Electric Vehicle Tax Credit

Reviewing the guidelines, limitations, and requirements for the electric car tax credit can be helpful in light of recent expansion and modification.

The long-term goal of the Inflation Reduction Act of 2022, one of the most comprehensive pieces of climate legislation in American history, is to make electric vehicles a little more affordable.

The bill, which President Biden signed into law on August 16, 2022, included approximately $369 million in funding for climate action, with a portion of the budget earmarked for improving tax credits for the purchase of electric vehicles.

According to the White House, these expansions could result in savings of up to $950 annually for Americans who claim the credit. Understanding these new modifications, however, can be somewhat difficult due to the abundance of new manufacturing requirements, income thresholds, and price limitations. The Treasury Department is currently figuring out how and when some of these rules will take effect, which makes the situation even more hazy.

The IRA has provided information on the federal tax incentives for electric vehicles as well as a review of modifications to the credit.

What is the electric vehicle tax credit in 2023?

When taxpayers buy eligible plug-in electric or "clean" automobiles, they are eligible for the nonrefundable tax credit known as the electric vehicle tax credit, or the EV credit. The nonrefundable credit varies from $2,500 to $7,500 for tax year 2022 (taxes filed in 2023), and eligibility is based on the vehicle's weight, how many automobiles the manufacturer has sold, and if you own the car.

Several modifications to the credit were introduced by the Inflation Reduction Act (IRA), which will largely take effect in 2023 and run until 2032. New manufacturing standards, income ceilings, and widened car type eligibility are a few of them.

For new EVs, the credit will not exceed $7,500, and for used EVs, it will not exceed $4,000, subject to a cap of 30% of the transaction price. By March 2023, the Treasury Department is anticipated to provide additional guidance on one of the new requirements, the battery and essential mineral requirement.

How does the electric vehicle tax credit work?

Most of the previous regulations still hold true if you made an EV purchase in 2022 that you want to deduct when you file your taxes in 2023. The credit's operation for the 2022 tax year is summarized as follows:

• Depending on the battery capacity of the car, the credit ranges from $2,500 to $7,500.
• Following the sale of 200,000 qualified vehicles by a manufacturer, credits start to decline and finally fade out. This disqualifies EVs from GM and Tesla while new models from Ford still qualify.
• The car has to be yours. Vehicles that have been previously owned or leased are not eligible.
• The vehicle must be under 14,000 pounds in weight. This tax credit is not applicable for large commercial electric vehicles.
• The credit is nonrefundable, so even though it can make your tax obligation zero, you won't get a refund.

One thing to be wary of is the "final assembly" requirement ushered in by the IRS is one significant exception. Clean automobiles must have had their final assembly in North America in order to be eligible for purchase between August 16, 2022, and December 31, 2022.

Importantly, you may be able to claim the credit without fulfilling this new final assembly criteria if you already engaged into what the IRS refers to as a "binding written contract" to buy an EV before August 16, 2022, and expect the car to be delivered at a later date. To be sure, it's a good idea to call your favorite Ford dealership, Gresham Ford, and a tax expert.

Making a credit claim

When filing their federal income taxes, people can submit Form 8936 to claim the credit. We are not tax experts and strongly encourage you to seek the inoput and guidance of your tax professional prior to any vehicle purchases.

The extending of the EV tax credit is the most important change. The benefit was reinstated for an additional nine years, making it available to taxpayers who own qualified cars from 2023 through 2032. Per vehicle, taxpayers are limited to one credit claim.

The IRS also changed a number of manufacturing restrictions that had previously made it difficult to qualify for the credit if you purchased a vehicle from a producer like Tesla that had sold more than 200,000 qualified automobiles. The manufacturing ceilings have be lifted starting in 2023.

Used cars are now eligible for EV tax credits

The earlier EV tax credit's exclusion of used vehicles was one of its most divisive features. The Inflation Reduction Act makes up for this. Taxpayers will be eligible for a credit of up to $4,000 for qualified used EV purchases starting in 2023, up to a maximum of 30% of the car's purchase price.

Additional qualifications for Used Cars:

• Used vehicles must be fuel cell or plug-in electric.
• Exclusively applicable to the initial transfer of an electric vehicle
• A car must cost no more than $25,000 to buy
• It must be a two-year-old or older model vehicle
• Only one credit claim per every three years is permitted.

Income Eligibility Ceiling

The new credit limits the modified adjusted gross income that taxpayers can earn in order to be eligible, in addition to placing price ceilings on cars.

For instance those filing single have a limit modified adjusted gross income of $150,000 annually for the purchase of a New Electric Vehicle. If you are married and filing jointly the limit is $300,000 for new vehicles.

Now that used electric vehicles are included in the IRA they have associated income eleigibility limits also. A single tax filer is limited to a modified adjusted gross income of $75,000 annually. Those who are married and filing jointly are limited to $150,000 for used electric vehicles.

Again, we are not tax experts and strongly encourage you to consult your own tax professional.

Qualified Used Clean Vehicles

Used Ford C-Max Energi Model Years

• 2013
• 2014
• 2015
• 2016
• 2017

Used Ford Escape Plug-In Hybrid Model Years

• 2020
• 2021

Used Ford Focus Electric Model Years

• 2012
• 2013
• 2014
• 2015
• 2016
• 2017
• 2018
• 2019
• 2020

Used Ford Fusion EnergiModel Years

• 2013
• 2014
• 2015
• 2016
• 2017
• 2018
• 2019
• 2020

Used Ford Mustang Mach-E Model Years

• 2021

The Inflation Reduction Act is Officially the Clean Vehicle Credit

Most importantly though – don’t forget that these incentives won't last forever – although they can be extended via Congressional action they are currently scheduled to expire in 2020 or 2021 depending on individual classifications so make sure not only do your research ahead but also act quickly if interested in taking advantage!

Besides obvious financial gains associated with going electric – there are numerous additional benefits worth noting as well: Electric powered vehicles emit far fewer toxic gases into our atmosphere than traditional gasoline cars – not only reducing air pollution but making them much more environmentally friendly overal. Additionally maintenance costs tend to be significantly lower due their simpler design architecture and fewer moving parts than usual. Moreover running costs such as electricity bills rather than gas prices make them much cheaper over time – particularly when used regularly instead just small distances. Furthermore, certain states have specially designated lanes reserved exclusively for electric move which helps drivers save time during rush hours commutes! Taking all things into consideration going electric seems like great option indeed!

Electric Vehicle Incentives: Exploring the Benefits of the Inflation Reduction Act

In conclusion while there are many great benefits associated with switching from traditional combustion engines cars over towards electric vehicles – perhaps one biggest drawl card yet remains tax credits available through various government enacted programs such as Clean Vehicle Credits discussed herein.. By utilizing these incentives savvy buyers can easily noticeably lower their overall purchase prices making owning an EV more affordable than previously thought possible… However always remember these offers won't last forever so act quickly if interested in taking advantage otherwise risk missing out those big savings altogether!