US tax credits will be available to qualified buyers of electric and plug-in vehicles starting in 2024

Starting next year, U.S. income tax credits will be available to buyers of new or used electric or plug-in hybrid vehicles.

The benefits were delayed until eligible buyers, including those who bought an EV or hybrid this year, filed their federal income tax returns.

The near-instant credits of $7,500 for a qualifying new vehicle and $4,000 for a qualifying used vehicle should lower consumer costs and boost EV sales for car dealers, according to the Treasury Department.

The vehicles must meet legal requirements, and buyers' incomes must be low.

Dealers must register on an IRS website and have state or local licenses to offer credits. Officials said dealers can expect government payments within 72 hours of submitting sales paperwork.

Plug-ins and electric vehicles must be made in North America. Cars can't cost more than $55,000, while SUVs, vans, and trucks can't cost more than $80,000.

Used electric cars can't cost more than $25,000.

Buyer income limits prevent wealthier buyers from getting credits. Buyers cannot earn more than $150,000 per year if single, $300,000 if married, or $225,000 if head of household.

Buyers must be below income limits in the purchase year or the previous year. The government said they must repay the credits when they file their income tax returns if their income exceeds the limits both years.

Battery and component manufacturing requirements may disqualify some vehicles or limit their tax credits.

The EV market share rose to 7.5% in the first nine months of the year as new electric vehicle sales rose 50.9%. U.S. consumers bought 875,798 EVs in January–September.