In an effort to clear up confusion about the new federal tax credit for electric cars, the IRS has issued new guidelines for taxpayers.
Bear in mind that the federal tax credit is non-refundable. Any portion not used for the tax year in which the car was first purchased is lost and cannot be carried over to subsequent tax years. If you need more information, you should seek advice from a qualified tax expert. We do know that you will need to filewith your tax return. And don’t forget that there are limits on the sales price of an electric car and the maximum income of the purchaser .
There are rumors the US government may attempt to level the playing field by using a loophole baked into the IRA thatfrom all the silly rules that apply to cars that are purchased outright — maybe. Here’s what the IRS has to say on this subject. We would try to summarize the applicable rules, but that would not make it clear how arcane they are. Read them for yourself and thenA1.
Is treated as a motor vehicle for purposes of title II of the Clean Air Act and is manufactured primarily for use on public streets, roads, and highways, and A6. Based on longstanding tax principles, the determination whether a transaction constitutes a sale or a lease of a vehicle for tax purposes is a question of fact.
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