EV Purchase Incentives – Prepared for Hotel Marcel

Incentives to Purchase or Lease an EV Are Available from both the Federal and State Governments

Federal Incentive (Inflation Reduction Act)

Both battery electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs) may be eligible for incentives of up to $7500 for a new vehicle. There are a number of rules that determine whether a particular purchase is eligible. These rules have to do with the vehicle, the buyer, and the seller.

Purchase Rules

Vehicle Rules

  • Final assembly must be in North America.
  • Vehicle must meet battery sourcing and assembly requirements.
  • Vehicle MSRP, including factory installed options must not exceed $55,000 for a sedan or $80,000 for an SUV or pickup.

Buyer

  • Buyer income may not exceed $300K for joint filers, $225K for head of house filers, or $150K for single filers.

Seller

  • Seller must be registered with the Department of Treasury.

Vehicles may qualify for either the full $7500 tax credit or a $3750 tax credit if the battery requirements are partially met.

Transfer Provision

This is important. The transfer provision allows the buyer to receive the incentive as a point of sale rebate (by transferring it to the seller who gets reimbursed by the government), rather than as a tax credit. The incentive will simply be deducted from the purchase price of the vehicle.

Is the Vehicle You’re Interested in Eligible?

This page on the Department of Energy website tells you which vehicles may be eligible. It gets updated frequently due to the rules progressively tightening and the manufacturers taking steps to comply.

The way to know for sure is to verify the VIN. This government page has a field where it can be entered. A dealer should know if a vehicle is eligible.

Leasing Rules

The restrictions around purchase eligibility do not apply to a lease. Any leased vehicle is eligible. However, a seller is not legally required to pass along the incentive. It is important to check.

State of CT Purchase Incentive

New BEVs are eligible for a $2,250 purchase incentive and new PHEVs are eligible for a $750 incentive. These are point of sale rebates and are deducted from the invoice price. They apply to both purchased and leased vehicles.

The state incentive can be used in conjunction with the federal incentive.

State Rules

  • The MSRP of the vehicle must be no higher than $50,000. MSRP is defined differently in the state incentive. It is the base MSRP of the trim level, excluding options.
  • This is a page that lists eligible new vehicles.
  • An individual is allowed to use the incentive for no more than two purchases.
  • Dealerships are integrated into the program. The program requires the vehicle be purchased from a CT dealer or a direct seller, e.g. Tesla.

Supplemental State Incentives (Rebate+)

Qualifying individuals can obtain an additional incentive of $2000 for a BEV and $1500 for a PHEV. The program is called Rebate+. These are the requirements:

The buyer can apply for a pre-qualification voucher to be given to the dealer so that the incentive can be given at the time of purchase.

Incentives for Used EV purchases

There are both federal and state incentives. These are the rules:

Federal

  • The amount of the incentive is the lesser of 30% of the purchase price or $4000.
  • Maximum permitted vehicle cost is $25,000.
  • Available only through dealers (new or used car dealers), not via private sale.
  • Minimum battery pack requirement of 7kWh (very small).
  • Buyer income caps of $150,000 for joint filers, $112,500 for head of household filers, $75,000 for single filers.
  • Transfer provision applies. Dealer must be registered for it. Used car dealers have reportedly been slow to register. Some used car dealers are registered for the tax credit but not the transfer.
  • An individual can take the used incentive no more than once every 3 years.
  • The vehicle model year must be at least 2 years older than the calendar year in which it is purchased.

State of CT

  • This is part of Rebate+ and the same eligibility requirements apply.
  • Incentives of $3000 for a BEV and $1125 for a PHEV are available.
  • Vehicle eligibility for used vehicles is restricted to those vehicles that were eligible when new. They can be found at this page.

For a more detailed description and some background, please visit the main incentives pages.

 

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