Are You Eligible for the $7,500 Federal Tax Credit For a Tesla?

If you’re considering taking the plunge into Tesla ownership, there’s good news. Customers who take delivery of a qualified new Tesla and meet all federal requirements can avail of a tax credit up to $7,500. However, it’s essential to note that reductions to the current federal tax credit are anticipated after December 31. So, if you’re on the fence, now might be the time to make a move.

Understanding Adjusted Gross Income (AGI) Limitations

Your eligibility for the tax credit is also determined by your Adjusted Gross Income (AGI). Here are the AGI limitations set by the federal government:

• Married Couples Filing Jointly: An AGI up to $300,000.
• Heads of Households: An AGI up to $225,000.
• All Other Filers: An AGI up to $150,000.

It’s crucial to ensure you fall within these AGI brackets to benefit from the tax credit.

Price Caps on Tesla Models

The federal government has set price caps on the vehicle’s Manufacturer’s Suggested Retail Price (MSRP) at the time of delivery. This price includes any optional equipment physically attached to the vehicle upon delivery but excludes software features, accessories, taxes, and fees. Currently, the following Tesla models qualify for federal tax credits, provided buyers meet all other federal requirements, including the aforementioned AGI limitations:

• Model 3: Capped at $55,000
• Model X: Capped at $80,000
• Model Y: Capped at $80,000

However, it’s worth noting that these price caps set by the federal government are not set in stone and are subject to change.

Tax Credit Breakdown by Tesla Model

For those wondering about the tax credit amount for specific Tesla models, here’s a breakdown:

• Model 3 Rear-Wheel Drive: $7,500
• Model 3 Long Range: $7,500
• Model 3 Performance: $7,500
• Model X Dual Motor: $7,500
• Model Y All-Wheel Drive: $7,500
• Model Y Long Range: $7,500
• Model Y Performance: $7,500

The federal tax credits offer a significant incentive for potential Tesla buyers. However, with the anticipated reductions post-December 31 and the ever-changing landscape of federal regulations, it’s essential to stay informed and make an educated decision. If you’re considering a Tesla, now might be an opportune time to capitalize on these credits while they last.