New electric vehicle owners in Idaho could get up to $7,500 tax credit in 2023

Shaun Goodwin
·3 min read

Idahoans who have recently purchased an electric vehicle may be in line for tax credits, but they will need to check the fine print first.

The Inflation Reduction Act of 2022 outlined that those who purchase a new plug-in electric vehicle or fuel cell vehicle from qualified manufacturers after Jan. 1, 2023, may be eligible for a clean vehicle tax credit of up to $7,500. The tax credit will be available once for new buyers through 2032.

The credit is available to individuals and businesses. But there are a few stipulations to qualify.

Who qualifies for EV tax credit?

Firstly, the individual or business must buy the vehicle for their individual use and not for resale, and it must also be driven primarily in the United States.

For individuals purchasing an electric vehicle, their adjusted gross income may not exceed the following:

  • $300,000 for married couples filing jointly

  • $225,000 for heads of households

  • $150,000 for all other filers

Owners can use their adjusted gross income total from the year they bought the vehicle or the year prior, whichever is the lowest.

Which EV cars qualify for tax credit?

Not only does the owner need to qualify financially, but there are also requirements on the vehicle that will determine whether a person is eligible for the tax credit.

Firstly, the vehicle’s manufacturer suggested retail price cannot exceed the following:

  • $80,000 for vans, sport utility vehicles and pickup trucks

  • $55,000 for other vehicles

The MSRP is the price of the automobile suggested by the manufacturer, which includes add-on options and accessories but does not include the destination fees. The retail price may not be the same as the MSRP.

The vehicle also has other requirements that can make or break its qualification for the tax credit:

  • The car was purchased new.

  • Has a battery capacity of at least 7-kilowatt hours.

  • Has a gross vehicle weight rating of fewer than 14,000 pounds.

  • Plug-in electric vehicles must be made by a qualified manufacturer— the Internal Revenue Service lists eligible manufacturers, including Ford, Audi and Tesla. Fuel cell vehicles do not need to be made by a qualified manufacturer to be eligible.

  • Underwent final assembly in North America.

How to claim the credit

When filing your tax return, you can file a Form 8936 to apply for the tax credit. You must submit your vehicle’s VIN when filing.

Electric vehicles in Idaho

There are approximately 3,500 electric vehicles registered in Idaho, according to data from the U.S. Department of Energy. That total comes out to about 0.24% of the 1,430,208 registered cars in the state as of October 2020, according to the Idaho Transportation Department.

To further put Idaho’s small number of EVs into perspective, the state ranks 37th in the nation for the number of electric vehicles on the road. The Department of Energy’s data, last updated in December 2021, shows Idaho ranking a spot above Vermont (3,370) and a spot below Iowa (3,360).

California leads the nation in registered electric vehicles, with 563,070 on the road, dwarfing second-place Florida’s number of 95,640. As for some of Idaho’s neighboring states, Washington ranks fourth (66,810), Oregon 13th (30,290), Utah 20th (16,480) and Wyoming 50th (510).

What is Idaho doing to encourage EV purchases?

Idaho doesn’t offer many incentives to electric vehicle owners, which may contribute to the state’s low rank compared to states like California and its $10 billion zero-emissions vehicle package.

The one major initiative that Idaho is implementing is the Electric Vehicle Supply Equipment Program. The program was provided $2.6 million, acquired through the Volkswagen Clean Air Act Civil Settlement, to build electric charging equipment along highways and interstates.

That program has installed just four charging stations in the state, but $2.1 million remains for additional projects. Businesses and organizations who want to apply for an electric charging station can do so through the Idaho Department of Environmental Quality.

Electric and hybrid vehicles are also exempt from state motor vehicle inspections and maintenance programs.