Since January 1, auto dealers have received reimbursement from the U.S. government for nearly $580 million in advance point-of-sale customer electric vehicle (EV) tax credit payments, according to a Treasury report released on April 12.
Previously, American consumers purchasing cars could only benefit from the $4,000 used EV credit or the new $7,500 credit for EVs when they submitted their tax returns the following year.
However, since the beginning of the year, dealers have received over $580 million in advance payments from the Internal Revenue Service (IRS), which has received almost 100,000 time-of-sale EV reports this year, according to the Treasury.
The Treasury reported that taxpayers submitted over 85,000 time-of-sale tax requests for new EVs, with more than 90% of them requesting $7,500 in advance payments. Approximately 75% of the more than 15,000 time-of-sale reports for used electric vehicles included demands for $4,000 in upfront costs.
In December, the Treasury issued instructions to decrease American dependence on the Chinese EV supply chain. According to Haris Talwar, a spokesperson for the Treasury, demand has been high for the past four months since the new provision was implemented. As a result of these instructions, fewer EV models are now eligible for U.S. EV tax credits.
The number of eligible EV models has been reduced from 43 to 19. Several vehicles, such as the Volkswagen ID.4, Nissan Leaf, GM’s Chevy Blazer EV, and Cadillac Lyriq, regained their eligibility. To be eligible for the tax credit, consumers must verify that they meet income requirements at the time of purchase. Otherwise, they must reimburse the government when they file their taxes. The adjusted gross income cap for new cars is $150,000 for single people and $300,000 for married couples.
