A Guide to the Ford EV Tax Credit

According to a recent poll, about 40% of American adults say their next car will likely be electric. There may only be about 3 million electric cars out on the road today, but that number is expected to go up dramatically in the years to come.

Many people have come around to the idea of driving electric vehicles due to the high gas prices that have plagued the nation. They also appreciate the tax credits being extended to those buying electric cars.

The Ford EV tax credit, in particular, entices those interested in buying American-made vehicles. It could help motivate more people to purchase Ford EVs sometime soon through dealerships like Brattleboro Ford.

We carry a handful of green vehicles from Ford. If you’re interested in potentially buying one, you should learn about the tax credit options you’ll have first.

Find out about the Ford EV tax credit below.

What Is the Federal EV Tax Credit?

The Inflation Reduction Act of 2022 was signed by President Biden last August. It was designed to help curb inflation by reducing the federal deficit, lowering prescription drug prices, and investing in clean energy.

The Inflation Reduction Act also introduced a new federal EV tax credit to replace the old one. It called for those who buy electric vehicles between 2023 and 2032 to earn tax credits of anywhere from $3,750 to $7,500.

The new federal EV tax credit is somewhat stricter than the old tax credit. It includes fewer than two dozen cars. But it provides a significant financial incentive for those who buy electric vehicles that meet the requirements.

What Are the Requirements for the EV Tax Credit?

To access the most recent federal EV tax credit, you’ll need to purchase an electric vehicle that meets a bunch of requirements. As we just alluded to, these requirements are more stringent than the previous ones.

For starters, all-electric vehicles that qualify for the federal EV tax credit must be assembled in North America. They also must meet specific standards when it comes to minerals in their batteries and the different battery components that are used.

Because of these stricter requirements, many electric vehicles that used to qualify for the federal EV tax credit don’t qualify for it anymore. But there are still many electric vehicles you can choose from to get access to the federal EV tax credit of up to $7,500.

Which Vehicles Qualify for the Ford EV Tax Credit?

Some notable automakers no longer have electric vehicles that qualify for the federal tax credit. Hyundai and Nissan are the two that come to mind first.

But Ford had no issues landing several new electric vehicles on the list of cars, trucks, and SUVs that qualify for the tax credit. You’ll be able to access the Ford EV tax credit by buying one of these 2023 Fords:

• Escape Plug-In Hybrid
• F-150 Lightning
• Mustang Mach-E

If you want to get the most bang for your buck, it’s the 2023 F-150 Lightning that’ll help you get your hands on a $7,500 tax credit. The other two models listed here only qualify for a $3,750 tax credit.

But depending on your 2023 tax liability, that might not be as big of a problem as you think. If you owe under $4,000 next April when tax time comes around, $3,750 might do the trick.

Do You Qualify for the EV Tax Credit?

Just because a Ford model qualifies for an EV tax credit doesn’t necessarily mean you will be eligible for it. The IRS has put Adjusted Gross Income (AGI) limits in place, and if you exceed them, you won’t qualify for the EV tax credit.

These AGI limits are as follows:

• $300,000 for married couples who are filing jointly
• $225,000 for any heads of households
• $150,000 for all other types of tax filers

Those relatively high thresholds should allow many people to qualify for a Ford EV tax credit. But even still, you should keep them in mind since some people out there will go above them and fail to qualify for an EV tax credit.

How Can You Claim the EV Tax Credit?

It’s one thing to buy one of the electric vehicles that’ll enable you to qualify for the federal EV tax credit. It’s another to actually go through with claiming it.

To claim the federal tax credit, you must fill out Form 8936 while working on your 2023 taxes. It’s a special form that was created specifically for those looking to claim this tax credit.

What Can You Do to Make the Most of the EV Tax Credit?

Something you’ll want to remember when you’re buying an electric car and looking to utilize the federal EV tax credit is that it will only help you if you owe taxes for 2023. You’ll only be able to claim an EV tax credit of up to $7,500, and if you owe the IRS less than that, it’ll bring down your tax credit.

With this in mind, you should ask your accountant how much money you’re currently withholding for tax purposes and adjust it accordingly. By withholding a little less, you can maximize your EV tax credit while doing your 2023 federal taxes.

Let Us Help You Take Advantage of the Ford EV Tax Credit

Are you in the market for an electric vehicle? You should consider checking out the latest Ford EV models, like the F-150 Lightning.

Brattleboro Ford can help you learn more about using the Ford EV tax credit on one of them. We’re one of the top Ford dealers in Vermont, and we’ll do our absolute best to save you the most money possible on a new Ford EV.

Contact us for additional information on the newest Ford electric vehicles and the tax credit options that’ll come with them. We can assist those in Springfield, VT, Claremont, NH, and many surrounding areas.

Tags: Brattleboro Ford, escape hybrid, Financing, Ford EV tax credit, Ford tax credit, Getting a new car, Mustang Mach e, Springfield Ford, VT
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