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How long do we need to keep an EV to prevent the recapture of the $7500 tax credit?

 The $7,500 tax credit is a federal incentive, and the time limitation to claim and keep the credit generally follows federal tax rules:

Federal Tax Credit Considerations:

  • Ownership Requirement: To be eligible for the credit, you must have purchased the vehicle for your own use and not for resale.

  • Use Requirement: The vehicle must be primarily used in the United States.

  • Filing Year: You must claim the credit in the tax year when you place the vehicle in service, i.e., when you start using the vehicle.

  • Recapture: If you sell the vehicle or no longer use it as your primary vehicle shortly after purchase, the IRS may require you to repay or "recapture" part of the credit.



    The IRS does not specify an exact period for how long you must keep an electric vehicle (EV) to avoid recapture of the tax credit. However, the vehicle must be kept for personal use and not resold or otherwise disposed of shortly after purchase.


    Generally, to avoid any issues, it's recommended to keep the vehicle for at least a few years. If you sell or stop using the vehicle as your primary vehicle within the same tax year or shortly after, you may risk having to repay or "recapture" part of the $7,500 tax credit. For specific guidance, consulting with a tax professional is advisable.



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