Trying to get some clarity on how the new administration might handle EV credits with the IRA. If Trump decides to end EV credits by executive action or law, would that impact credits given on cars bought earlier in January 2025?
For example, if someone buys a car on Jan 10th, and Trump removes the credits on Jan 20th, would they lose the credit? Or would they be safe since the purchase happened before any changes? Don’t want any surprises come tax season and end up repaying the $7500 credit.
@Maria
This is why I get frustrated with politics in general. It often feels more about winning against the other side than actually doing what’s best.
The new administration can’t take back money that’s already been given, but they can stop all new payments after Jan 20, 2025.
So if a dealer offers a point-of-sale credit or lease discount, they might get caught if the credit gets canceled after the sale. Also, credits claimed for cars bought in 2025 wouldn’t be given until 2026, so there’s still some risk.
Best bet? Buy before the end of 2024 or push the risk onto the dealership, but make sure the agreement doesn’t have you paying back any credit if the government stops funding.
Interesting to note there’s some pushback from red states with new EV factories. They might try to hold back any anti-EV policies. Could get messy in the party.
In early 2024, the credit could be taken right off the car’s purchase price instead of waiting for it at tax time.
If you lease, the $7,500 gets taken off the price right away. For buying, make sure the car meets requirements like battery origin and manufacturing location in North America to get the full credit.
@Imani
Dealers still need to submit paperwork to get the $7,500 later on. If they think they won’t get the money from the government, they might stop offering the point-of-sale credit.
Same goes for leases. There’s no rule saying they have to pass the $7,500 to the customer. Most do, but if they feel their check isn’t coming, that may change fast.
Most likely, he’ll just follow the original intent of the law. That might mean no lease loophole, stricter income requirements, and stricter mineral sourcing.
If the car has 60% of its battery components made in North America, it should still qualify for the $7,500.
@Connie
Those are things he could do with executive orders. But if Republicans control the House, they could try to repeal the IRA. The tricky part is getting everyone to agree, so it’s not guaranteed.
@MAKENA
Senator Manchin was pretty upset with how freely the law was being interpreted. If Trump enforces it strictly, it’ll be closer to what was originally planned. People may want to check the requirements, as the mineral content requirement will go up next year, which could mean fewer cars qualify.
@MAKENA
Last time they tried to get rid of the old tax credit (2018), they couldn’t do it, even during debt ceiling talks. They also couldn’t repeal the ACA.
Randy said: @MAKENA
Last time they tried to get rid of the old tax credit (2018), they couldn’t do it, even during debt ceiling talks. They also couldn’t repeal the ACA.
The only reason ACA stayed was because of McCain’s vote against repeal. Finding a Republican willing to break ranks now might be harder. Still, there’s a slim chance Democrats could flip the House, and I’m hoping for it every day!
At first, Trump seemed ready to get rid of the EV tax credit. But since Musk backed him and made donations, he’s softened a bit. It’s hard to say if Musk will convince him to keep it or not. If you really want the credit, buying before Jan 20th seems safest.