The most effective retirement planning involves keeping up with current legislation and using it mindfully to make the most of your savings and do the things you’ll enjoy most in retirement.
For instance, a recent change provides a tax credit for new clean vehicles purchased in 2023 or after. If you’ve recently acquired a new plug-in electric vehicle (EV) or a fuel cell vehicle (FCV) in 2023 or later, you may be eligible for a clean vehicle tax credit. (1)
This is good news for any retirees planning to enjoy their retirement in style, with a new electric vehicle!
You could qualify for a tax credit of up to $7,500 if you purchase a new, qualified plug-in EV or FCV. This tax credit is available to both individuals and their businesses. To be eligible, you must:
• Purchase the vehicle for your own personal use, not for resale.
• Primarily use it within the United States.
In addition, you modified adjusted gross income (AGI) must not exceed the following thresholds:
• $300,000 for married couples filing jointly
• $225,000 for heads of households
• $150,000 for all other filers
Please keep in mind that this credit is nonrefundable, meaning you can’t receive more in credit than you owe in taxes. Any excess credit cannot be applied to future tax years.
The tax credit amount depends on the date you placed the vehicle in service (the date you took delivery), regardless of the purchase date.
In most cases, the minimum credit will amount to $3,751 ($2,500 + 3 times $417), which applies to vehicles with a minimum 7-kilowatt-hour battery capacity.
Please note that vehicles that do not meet these requirements will not qualify for the tax credit.
Be sure to check irs.gov for full details and requirements for this tax credit, including whether or not you could qualify. You can see if your vehicle is eligible for the new clean vehicle credit here.
When you pair tax breaks like this with a reliable retirement income plan that tells you exactly how much you can spend each month, then you can confidently go buy that new car you want!
Schedule some time to meet with a financial planner at The Retirement Solution and see if this tax break could be beneficial for you!
1. https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after
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Travis Johnson, Financial Planner