How Does the Federal Tax Credit for Electric Vehicles Work?

Rising gas prices in Louisville and everywhere else have made electrified cars like the Toyota Prius Prime Plug-in Hybrid more appealing. The allure of tax credits makes those vehicles even more appealing. But is there still a federal tax credit for electric cars? Do used electric cars qualify for the tax credit? How does the federal electric car tax credit work? Keep reading to get the answers from Toyota of Louisville.

How to Claim the Federal Electric Car Tax Credit

So, how does the federal car tax credit work, exactly? First, you’ll want to make certain your car is eligible and, if so, how much it’s eligible for. You can use the tool on the EPA website to find that information. If your car is eligible, fill out the appropriate tax form and deduct that amount from the taxes you owe. You can not claim a credit that is larger than what you owe.

• Calculate how much you owe in taxes.
• Check how much in tax credits your vehicle is eligible for.
• Deduct that amount from the taxes you owe (tax form 8936).

Do Used Electric Cars Quality for the Tax Credit?

Is it only new cars that qualify for the credit, or do used electric cars qualify for the tax credit? Thanks to new rules, some used cars that are sold in the New Albany area do in fact qualify for the federal tax credit of up to $4,000. In order to qualify, a model must meet the following requirements:

• Costs less than $25,000
• Is more than two years old
• Is being sold by the original owner

Is There a Federal Tax Credit for Electric Cars Built by Toyota?

Toyota has multiple electric vehicles in its lineup. So is there a federal tax credit for electric cars built by Toyota? There is, indeed. Here’s a list of Toyota vehicles that are both popular with Elizabethtown drivers and are eligible for the tax credit:

• Prius Prime Plug-in Hybrid
• Prius Plug-in Electric Drive Vehicle
• RAV4 EV
• RAV4 Prime Plug-In Hybrid

Test Drive the Electrified Vehicles at Toyota of Louisville

You should come down and test drive one of these exceptional hybrid vehicles so that you can experience their impressive performance for yourself. We’d love to put you behind the wheel of one. In the meantime, check out our detailed overview of the 2022 Prius Prime. We’re just down the road from Lexington. So, drop by or contact us today.