The Department of the Treasury and the Internal Revenue Service have issued guidance and frequently asked questions to provide initial information on changes to the electric vehicle tax credit as a result of the enactment of the Inflation Reduction Act.
The move seeks to provide information on the North America final assembly requirement to help consumers determine their eligibility for a tax credit of up to $7,500 following their purchase of electric vehicles, the Treasury said Tuesday.
According to the FAQs, the law will authorize tax credits for pre-owned cars and commercial clean vehicles starting Jan. 1, 2023.
President Joe Biden on Tuesday, Aug. 16, signed into law the Inflation Reduction Act and the Treasury said the final assembly requirement does not apply before the enactment of the measure.
Individuals who signed a written binding contract to buy a new electric vehicle prior to Aug. 16, but do not yet have the unit until on or after the said date can claim the tax credit based on regulations that were in effect prior to the legislation’s enactment.
The departments of Energy and Transportation also issued resources to guide consumers seeking to claim tax credits for vehicles procured after the enactment of the law.