Courtesy of the Wall Street Journal, the following is a detailed explanation of the new rules for electric vehicle tax credits that became effective this August when President Biden signed the Inflation Reduction Act into law:
What are the credits?
The maximum tax credit in the new law is the same as the old law. EV buyers can get a credit of as much as $7,500 for new electric vehicles through 2032. And starting in January, there is a new tax credit of up to $4,000 or 30% of the sales price, whichever is less, for used EVs, also through 2032.
Purchases between Aug. 16 and year-end 2022
Shoppers who buy and take possession of an EV in this period are limited to vehicles with final assembly in North America. The Energy Department has already put together a list of Model Year 2022 and 2023 vehicles that likely meet the requirement—likely because some models are built in multiple locations.
To check whether a specific vehicle meets the final assembly rule, buyers can enter the make and model year and VIN into the National Highway Traffic Safety Administration’s VIN Decoder, and the decoder spits out vehicle details including the place of manufacture.