WASHINGTON (Reuters) -The U.S. government has reimbursed auto dealers for more than $580 million in advance point-of-sale consumer electric vehicle (EV) tax credit payments since Jan. 1, the Treasury said on Friday.
Prior to 2024, U.S. auto buyers could only take advantage of the new EV credit of up to $7,500 or the $4,000 used EV credit when they filed tax returns the following year.
The Internal Revenue Service has received approximately 100,000 time of sale EV reports this year and paid more than $580 million in advance payments to dealers since Jan. 1, Treasury said.
Starting Jan. 1, consumers can transfer the credits to a car dealer at the time of sale, effectively lowering the purchase price.
Treasury said more than 85,000 of the time of sale tax reports were for new EVs, with over 90% of those including advance payments request for $7,500. More than 15,000 time of sale reports were for used EVs, with about 75% including advanced payments requests for $4,000.
Treasury spokesperson Haris Talwar said “demand is high four months into implementation of this new provision.”
The Treasury issued guidelines in December aimed at weaning the U.S. EV supply chain away from China. The number of EV models qualifying for U.S. EV tax credits fell on Jan. 1 to 19 from 43 with some Tesla (NASDAQ:TSLA) Model 3s, Chevrolet Silverado EV, Ford (NYSE:F) Mustang Mach-E, Ford E-Transit vehicles among those losing credits.
Since then, many have regained eligibility including the Volkswagen (ETR:VOWG_p) ID.4, Nissan (OTC:NSANY) Motor Leaf, GM’s Chevy Blazer EV and Cadillac Lyriq.
Consumers must attest they meet income limits to qualify for the tax credit at time of purchase 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.
The August 2022 Inflation Reduction Act law reformed the EV tax credit, requiring vehicles to be assembled in North America to qualify for any tax credits, eliminating nearly 70% of eligible models.
It also created a used EV tax credit, lifted 200,000-vehicle manufacturer caps on credits, imposed income and vehicle price restrictions and extended credits to leased vehicles.
Source: Economy - investing.com
