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How much can you write off on taxes for a Tesla electric car?
I’ve heard that I can get an EV tax credit from the government. My partner and I purchased a Tesla Model Y earlier this year. I’m wondering how much the tax credit is and how much we can write off the Tesla on our taxes.
Elaine Duvet · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Writing off your Tesla on your taxes depends on a few factors:
- The percent of the time it’s used for business
- How necessary the Tesla is for your line of work
- The gross vehicle weight
- The specific rules for your state
Depending on the profit for your business, you can write off the entire cost of the vehicle, a portion, or spread it out over five years.
Many Tesla owners wonder how
Biden’s Build Back Better bill
can help them out. Here’s what we know about doing your taxes as a Tesla owner:- In order to claim the credit, you must file Form 8936 and have a federal tax liability for the year you purchased the new car.
- The Build Back Better bill was reworked and passed on August 12, 2022.
- The car assembly needs to happen in North America for the car to be eligible.
- Only vehicles that cost less than $50,000 are eligible, along with trucks and SUVs that cost less than $80,000.
Important note: If you purchased your Tesla after Dec. 31, 2021, you could qualify for a $7,500 federal tax credit. Both Tesla Model 3s and Model Ys are eligible.
Now that you know your Tesla Model Y could possibly qualify for tax incentives, keep an eye on the news for any recent updates.
MORE: This Modified Tesla Model Y Isn’t Exactly an Off Road Supercar
View full answer
- Gregory R.
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