# The Inflation Reduction Act at work: Electric Cars Eligible for the $7500 Tax Credit



## _Tron_ (Feb 9, 2020)

Note: Since this is a credit and not a rebate, it is likely that drivers will have to have a federal tax liability at year's end in order to qualify for the credit. And to get the full credit you will have to have at least $7500 in tax liability (whether you have already paid the tax or not). So this bill is not very TNC friendly.

Interesting to note that Ford immediately raised the price on it electric truck by about $7500 (varies according to model) right after the Inflation Reduction Act was signed into law.









Here are the cars eligible for the $7,500 EV tax credit in the Inflation Reduction Act


The EV tax credit has changed and many cars are no longer eligible. Here's the list of electric cars made in North America which qualify now.




electrek.co




* If the car is marked as "*Manufacturer sales cap met*" the car will not be eligible for the credit until next year.


----------



## _Tron_ (Feb 9, 2020)

Noteworthy comment about Tesla cars in the comments section of the article...


----------



## mrwhts (May 16, 2021)

opps


----------



## dnlbaboof (Nov 13, 2015)

basically the credit is only for rich people, EV's are sometimes twice the price of regular cars, and you only get the credit if you have tons of tax liability.......Fail. This "inflation reduction act" does not reduce inflation, its a green new deal for rich people, tell me someone whos broke growing up in the inner city thats going to get solar panels and an EV?


----------



## tohunt4me (Nov 23, 2015)

_Tron_ said:


> Note: Since this is a credit and not a rebate, it is likely that drivers will have to have a federal tax liability at year's end in order to qualify for the credit. And to get the full credit you will have to have at least $7500 in tax liability (whether you have already paid the tax or not). So this bill is not very TNC friendly.
> 
> Interesting to note that Ford immediately raised the price on it electric truck by about $7500 (varies according to model) right after the Inflation Reduction Act was signed into law.
> 
> ...


I heard the Prices of Electric Cars SUDDENLY WENT UP $7,500.00 !


----------



## Trafficat (Dec 19, 2016)

Inflation reduction act.... printing more money to create more inflation.

Should call it "inflation intensification act"


----------



## losiglow (Dec 4, 2018)

dnlbaboof said:


> basically the credit is only for rich people, EV's are sometimes twice the price of regular cars, and you only get the credit if you have tons of tax liability.......Fail. This "inflation reduction act" does not reduce inflation, its a green new deal for rich people, tell me someone whos broke growing up in the inner city thats going to get solar panels and an EV?


Proof that both Democrats and Republicans "tax cuts" are mainly for the rich. Trump's tax cuts largely benefitted those with incomes above $200K. Apparently Biden's are doing about the same.

Oh, and I love that it's a "inflation reduction" act although it's slated to reduce inflation by around 1/10th of 1% over the next year 🤪


----------



## _Tron_ (Feb 9, 2020)

tohunt4me said:


> I heard the Prices of Electric Cars SUDDENLY WENT UP $7,500.00 !
> 
> View attachment 673066


If that is true than it's the worst PR blunder for EVs since GM recalled and destroyed all the EV-1 cars at the turn of the century.


----------



## _Tron_ (Feb 9, 2020)

dnlbaboof said:


> basically the credit is only for rich people, EV's are sometimes twice the price of regular cars, and you only get the credit if you have tons of tax liability.......Fail. This "inflation reduction act" does not reduce inflation, its a green new deal for rich people, tell me someone whos broke growing up in the inner city thats going to get solar panels and an EV?


Correct. They did cap the credit for cars over a certain price point, which helps, but it's still money that could have been better spent elsewhere if (BIG *IF*) the idea was to reduce inflation and/or speed adoption of sustainably powered vehicles.


----------



## dnlbaboof (Nov 13, 2015)

if they made it 7,500 cash back for people making less than say 50,000 than it be good, not a rebate but instant cash back..only helps rich people. electric cars are just too pricy....


----------



## ObeyTheNumbers (8 mo ago)

There is plenty of logistical issues with current EV's that make them unsuitable for ridesharing drivers.

1: Cost of vehicle. Poor value.
2: High cost for replacement batteries.
3: No quick charge EVs currently.
4: Poor range. Need 500 miles plus range.
5: Back to factory repairs takes months.
6: Thin tire thread and no spare.
7: Easily damaged, little room for luggage.
8: Gas stations need to have quick charging stations.
9: Poor interior room.


----------



## losiglow (Dec 4, 2018)

ObeyTheNumbers said:


> There is plenty of logistical issues with current EV's that make them unsuitable for ridesharing drivers.
> 
> 1: Cost of vehicle. Poor value.
> 2: High cost for replacement batteries.
> ...


It's true. I'm 110% onboard with EV's. But for RS, they're not the perfect solution. I think in a few short years, maybe as few as five, they will be at a point where they might make more sense. Both in a practical application as well as cost.


----------



## _Tron_ (Feb 9, 2020)

ObeyTheNumbers said:


> There is plenty of logistical issues with current EV's that make them unsuitable for ridesharing drivers.
> 
> 1: Cost of vehicle. Poor value.
> 2: High cost for replacement batteries.
> ...


EVs are definitely not for everyone yet, but you are as off base with this list as you were the last time you posted it. EVs have disadvantages still. Why exaggerate?


----------



## Atom guy (Jul 27, 2016)

The $7500 is supposed to switch to a point of purchase discount when this takes effect next year. The $7500 tax credit finishes out this year.


----------



## tohunt4me (Nov 23, 2015)

losiglow said:


> It's true. I'm 110% onboard with EV's. But for RS, they're not the perfect solution. I think in a few short years, maybe as few as five, they will be at a point where they might make more sense. Both in a practical application as well as cost.


Electric vehicles with an on board 10 hp generator.
Limitless range.


----------



## Atom guy (Jul 27, 2016)

tohunt4me said:


> Electric vehicles with an on board 10 hp generator.
> Limitless range.


BMW tried that with the i3 EV that could be optioned with a 2 cylinder range extending gas motor. But they sized it too small and the little 2 cylinder engine couldn't generated enough electricity to keep the car moving at highway speeds after the battery got drained. I have personal experience with this.


----------



## ThrowInTheTowel (Apr 10, 2018)

_Tron_ said:


> Correct. They did cap the credit for cars over a certain price point, which helps, but it's still money that could have been better spent elsewhere if (BIG *IF*) the idea was to reduce inflation and/or speed adoption of sustainably powered vehicles.


So does this tax credit just reduce your taxable income by $7500 or are you actually getting a reimbursement for $7500? Or neither?


----------



## Atom guy (Jul 27, 2016)

ThrowInTheTowel said:


> So does this tax credit just reduce your taxable income by $7500 or are you actually getting a reimbursement for $7500? Or neither?


Right now it's a tax credit, so you may not se the benefit. But come next year it's supposed to be a point of purchase discount


----------



## _Tron_ (Feb 9, 2020)

ThrowInTheTowel said:


> So does this tax credit just reduce your taxable income by $7500 or are you actually getting a reimbursement for $7500? Or neither?


It just reduces your taxable income by $7500. No reimbursement, unless you happen to have paid fed taxes throughout the year. That counts towards your credit. It's all about tax "liability" for that year, not whether you have paid down any liability. So you could theoretically get a check from Uncle Sam.


Atom guy said:


> Right now it's a tax credit, so you may not se the benefit. But come next year it's supposed to be a point of purchase discount


Point of purchase _discount_? It's not a discount. We wish. It is just that at the point of _sale_ you become eligible for the credit, if I am understanding correctly. It's worded in a confusing way.
----------

This Verge article helps understand the law.








Yes, the new electric vehicle tax credits are really confusing, but we can help


The tax credits may slow down EV sales in the short term.




www.theverge.com





"Simply put, the Inflation Reduction Act includes a $7,500 tax credit at the point of sale for new EVs and $4,000 for used EVs. The new tax credits replace the old incentive system, which only included a $7,500 for new EVs. "

"If you’re rich, now is the time to buy. Right now, there are no income requirements for who can claim the credit. But starting January 1st, the credits will be capped to an income level of $150,000 for a single filing taxpayer and $300,000 for joint filers."


----------



## NorCalPhil (Aug 19, 2016)

losiglow said:


> Proof that both Democrats and Republicans "tax cuts" are mainly for the rich. Trump's tax cuts largely benefitted those with incomes above $200K. Apparently Biden's are doing about the same.
> 
> Oh, and I love that it's a "inflation reduction" act although it's slated to reduce inflation by around 1/10th of 1% over the next year 🤪


In fairness tax cuts do generally go to people who pay taxes. Those people are also the ones more likely to donate to politicians. 

There's no grift in a 'redistribution payment' to poor people.


----------



## alvarezca (Mar 7, 2018)

dnlbaboof said:


> basically the credit is only for rich people, EV's are sometimes twice the price of regular cars, and you only get the credit if you have tons of tax liability.......Fail. This "inflation reduction act" does not reduce inflation, its a green new deal for rich people, tell me someone whos broke growing up in the inner city thats going to get solar panels and an EV?


Your an idiot,get a grip


----------



## dnlbaboof (Nov 13, 2015)

you're you mean.............perhaps you can explain how solar credits and ev credits help people who live in the inner city?


----------



## New2This (Dec 27, 2015)

alvarezca said:


> Your an idiot


If you're going to call someone an idiot it's in your best interest to know the difference between your and you're.

🤦‍♂️


----------



## Older Chauffeur (Oct 16, 2014)

ThrowInTheTowel said:


> So does this tax credit just reduce your taxable income by $7500 or are you actually getting a reimbursement for $7500? Or neither?


@_Tron_ is mistaken in his answer. (However he had it right in his earlier post.) It is currently a refundable credit, meaning to get the full $7500, you have to OWE at least that amount in income tax on your return. A deduction would reduce your taxable income.


----------



## _Tron_ (Feb 9, 2020)

I thought that's what I said, but as long as @ThrowInTheTowel has an answer to their question that's what counts.


----------



## Uberyouber (Jan 16, 2017)

New2This said:


> If you're going to call someone an idiot it's in your best interest to know the difference between your and you're.
> 
> 🤦‍♂️


⭐⭐⭐⭐1/2 ...


----------



## ThrowInTheTowel (Apr 10, 2018)

Older Chauffeur said:


> @_Tron_ is mistaken in his answer. (However he had it right in his earlier post.) It is currently a refundable credit, meaning to get the full $7500, you have to OWE at least that amount in income tax on your return. A deduction would reduce your taxable income.


Could you please elaborate a little more? So it's only beneficial if you fall under one specific category? If I owed $8,000 in taxes this would reduce my debt to $500? But if I broke even and owed zero I would not get anything? Not even reducing my taxable income by $7,500? If that's the case it would be perfect for 1099 employees who don't have taxes withheld weekly like W-2 employees. I'm a little confused on this one.


----------



## painfreepc (Jul 17, 2014)

tohunt4me said:


> Electric vehicles with an on board 10 hp generator.
> Limitless range.


Isn't this how the Chevrolet Volt works, I don't know about the horsepower of the engine, but the engine is also acting as a generator to charge the battery.


----------



## ThrowInTheTowel (Apr 10, 2018)

painfreepc said:


> Isn't this how the Chevrolet Volt works, I don't know about the horsepower of the engine, but the engine is also acting as a generator to charge the battery.


So what powers the generator? Wouldn't that be considered a hybrid?


----------



## Atom guy (Jul 27, 2016)

ThrowInTheTowel said:


> So what powers the generator? Wouldn't that be considered a hybrid?


On the Volt it is a regular 4 cylinder engine, 1.4L I think. On the Volt and the BMW i3 with the range extender, the gas motor generates electricity which powers the electric motor after the EV battery is drained, but the gas motor doesn't directly move the car like a regular gas car or even a regular hybrid car


----------



## painfreepc (Jul 17, 2014)

ThrowInTheTowel said:


> So what powers the generator? Wouldn't that be considered a hybrid?


Never mind I did some more reading, it looks like it's only really efficient for people who drive 40 miles or less per charge for those people they rarely ever have to use any of the gasoline, plus the car is rated for five passengers but realistically it only holds 4 the center console goes all the way to the back seat.


----------

