U.S. Treasury details new point-of-purchase instant EV tax credit rules

WASHINGTON — The U.S. Treasury Department on Friday issued new guidance on how a $7,500 electric vehicle tax credit can be used as a point-of-sale rebate starting in January.

Currently, consumers can only take advantage of the $7,500 new EV credit or $4,000 used EV credit when they file their tax returns the following year.

Starting Jan. 1, consumers can transfer the credits to a car dealer, effectively lowering the vehicle’s purchase price, a change that may help boost EV sales.

Under the guidance issued Friday, consumers will need to attest they meet income limits to qualify for the tax credit or they will need to repay the government when filing their taxes.

For new vehicles, the adjusted gross income limit is $300,000 for married couples and $150,000 for individuals.

Congress approved a sweeping reform of the EV tax credits in August 2022 as part of the $430 billion Inflation Reduction Act (IRA).