There is an income limit on the new US Inflation Reduction Act EV $7500 tax credit for new Electric cars in the USA.
On page 14, the credit would be disallowed for certain higher-income taxpayers. Specifically, no credit would be allowed if the current year or preceding year’s modified AGI (adjusted gross income) exceeds $300,000 for married taxpayers ($225,000 in the case of head of household filers; $150,000 in the case of other filers).
How to calculate Adjusted Gross Income (AGI)?
Using the income tax calculator, simply add all forms of income together, and subtract any tax deductions from that amount. Depending on your tax situation, your AGI can even be zero or negative.
If your total income from all sources is over $300k then it could be brought back under with retirement savings plans, tuition, alimony payments and investment losses.
Only certain cars qualify for the tax credit. Tesla and GM cars will not qualify until Jan 1, 2023. This is based upon when they timed the removal of the credit being for the first 200,000 cars. There are also rules around the cost of cars and how much of the cars and batteries are made outside the USA.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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