Press "Enter" to skip to content

Electric vehicle tax credits: What to know before you buy – Bankrate.com

We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free – so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.
Buying a home
Refinancing your existing loan
Finding the right lender
Additional Resources
Elevate your Bankrate experience
Get insider access to our best financial tools and content
Compare accounts
Use calculators
Get advice
Bank reviews
Elevate your Bankrate experience
Get insider access to our best financial tools and content
Compare by category
Compare by credit needed
Compare by issuer
Get advice
Looking for the perfect credit card?
Narrow your search with CardMatch™
Personal Loans
Student Loans
Other Loans
Loan calculators
Elevate your Bankrate experience
Get insider access to our best financial tools and content
Best of
Brokerages and robo-advisors
Learn the basics
Additional resources
Elevate your Bankrate experience
Get insider access to our best financial tools and content
Get the best rates
Lender reviews
Use calculators
Knowledge base
Elevate your Bankrate experience
Get insider access to our best financial tools and content
Car insurance
Homeowners insurance
Other insurance
Company reviews
Elevate your Bankrate experience
Get insider access to our best financial tools and content
Retirement plans & accounts
Learn the basics
Retirement calculators
Additional resources
Elevate your Bankrate experience
Get insider access to our best financial tools and content
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free – so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.
While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for .
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.
Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.
This content is powered by HomeInsurance.com, a licensed insurance producer (NPN: 8781838) and a corporate affiliate of Bankrate.com. HomeInsurance.com LLC services are only available in states were it is licensed and insurance coverage through HomeInsurance.com may not be available in all states. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
Electric vehicles are no longer only a great car option for climate-conscious drivers. The EV market has dramatically grown over the past couple of years, and these days EVs range widely in luxury, style and price. But driving electric can also come with additional money-saving perks. The electric car tax credit is a financial incentive given to those who purchase an electric vehicle and depending on your home state can save you thousands.
The easiest way to see how much the market has grown is to look at recent EV information.
The EV tax credit is a federal incentive built to encourage drivers to purchase an electric vehicle. This incentive is not a check you receive in the mail following a vehicle purchase, but rather a tax credit worth $7,500 that you become eligible for. This credit applies to all electric and plug-in vehicles, but specific credit amounts can be found via the U.S. Department of Energy’s website, fueleconomy.org.
To qualify for available incentives, your vehicle must meet certain specifications, including:
It is also important to remember that purchasing the vehicle alone does not ensure that you get the tax credit. You must file Form 8936 with the IRS.
The tax credit does not apply to those leasing electric vehicles. Instead, that money will go to the lessor. But this still can lower a monthly payment — if the lessor chooses to factor that incentive into your lease agreement. Mention this during negotiation to try and save money.
It is likely that the credit will be around indefinitely, especially with increased pushes for more climate-aware vehicles. But the available vehicles are constantly shifting. This is due to the phase-out structure of tax credits.
When a manufacturer hits a certain number of credits, those vehicles will no longer be eligible. This cap ranges depending on the vehicle manufacturer, so it is important to check if the vehicle you intend to purchase is still available for credit.
If two members of the same household purchase electric vehicles for themselves, they will be able to separately claim the credit for their individual cars. If the two buy an EV together, the credit may only be claimed once.
Any driver who submits the necessary information for a qualifying vehicle using Form 8936 may be eligible for an EV tax credit. But the type and amount of income that you receive can affect what tax credits you receive.
Unfortunately, not every state offers EV tax credits and incentives. So, before you set out to buy a charging station for your garage, determine how much you can save in your home state.

Here are some specific EV tax credits offered by vehicle brands. Just as each state differs, consider the benefits to one vehicle brand over another.
Information gathered from irs.gov
Just as with buying a traditional gas vehicle, deciding to dive into the world of electric vehicle buying requires questioning several factors, such as cost, size and practicality. But buying an EV takes extra consideration. Here are some questions to ask yourself before signing off on an electric vehicle.
Electric vehicles are still some of the most expensive on the market, and until more are produced, they will predictably stay at a steeper price point. But because manufacturers are making green vehicles a priority, and the government is looking to reward that, the tax credit likely won’t be leaving anytime soon. And if you have been interested in going green for a while, now might be a good time to act.
This is especially true following President Biden’s August 2021 executive order stating that half of all new vehicles sold in the U.S. should be electric by 2030. While that is quite a steep percentage jump from today, you may be able to take advantage of the current surge of electric car options and save extra money through an available tax credit.
If the time to purchase your new set of wheels is upon you, consider buying an electric vehicle to benefit from the EV tax credit. When it comes time to find financing and insurance be sure to compare rates and differing costs for buying EV over traditional.
Bankrate.com is an independent, advertising-supported publisher and comparison service. Bankrate is compensated in exchange for featured placement of sponsored products and services, or your clicking on links posted on this website. This compensation may impact how, where and in what order products appear. Bankrate.com does not include all companies or all available products.
Bankrate, LLC NMLS ID# 1427381 | NMLS Consumer Access
BR Tech Services, Inc. NMLS ID #1743443 | NMLS Consumer Access
© 2022 Bankrate, LLC. A Red Ventures company. All Rights Reserved.

source