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Some news about the vehicle market: Hyundai Motor Group, which includes KIA and Genesis brands, now provides models that are now eligible for the Federal Tax Credit of $ 7,500.
The electric vehicle tax credit, a key component of President Biden’s Inflation Reduction Act (IRA), has become a popular incentive for consumers interested in switching to electric cars. Although some industry brands, such as Tesla, have had models on and off the official list of eligible cars, this is the first time since the IRA was enacted that electric cars from Korean automakers qualify. for the incentive.
In recent years, as Kiplinger reported, South Korea was vocal in its belief that strict EV tax credit requirements meant many EVs, including those made by Hyundai and Kia, wouldn’t qualify. However, the manufacturer made strategic moves that helped make five models eligible for the tax break.
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This eligibility, as of January 1, 2025, deserves the competitiveness of Hyundai and Kia in the US market.
So, if you’re in the market for an electric vehicle and are excited about the Kia and Hyundai models, here’s what you need to know.
Federal vehicle tax credits are up to $7,500 for eligible new “clean vehicles” and up to $4,000 for eligible used vehicles.
The credit amount considers factors like the vehicle’s price, sourcing, and assembly (which must primarily be in North America for the full credit) and when you placed your vehicle into service.
Five cars from the Hyundai Motor Group are now among the twenty-five car models eligible for the federal tax credit:
The new eligibility is deduced from the recent production adjustments aimed at responding to the mandate of Ira-American meetings of North America. For example, Hyundai production in its new production plant for electric cars of several billions of dollars in Georgia last fall.
Kia also started manufacturing its popular EV6 and EV9 models in Georgia, while the Genesis Electrified GV70 was built at Hyundai’s plant in Alabama.
Some expect the inclusion of Hyundai and Kia models in the tax loan program to have a positive effect on the EV market. For example, with a reputation for competitive prices, those recently eligible models can attract more consumers to electric vehicles.
While this is positive for some Hyundai and Kia enthusiasts, the moment is attractive since the long execution of the Federal Fiscal Credit Program of EV is uncertain. As mentioned, the new Trump administration has indicated its goal of eliminating this incentive.
Repealing the EV tax credit would require congressional approval, likely as part of a larger tax reform package. So, the tax credit’s fate isn’t yet sealed and will probably be a point of contention in upcoming legislative debates on Capitol Hill. (Stay tuned and consider leveraging clean energy tax credits sooner rather than later to benefit from existing savings opportunities.)
One such opportunity is to take advantage of EV tax credits at the point of sale. Starting last year, registered dealers can transfer EV credit savings to eligible cars when purchasing, so you don’t have to wait to register your ride. save again. For more information, see Point-of-sale EV credit is a hit.
Also, it’s important to remember that income limits apply to this tax break. You won’t qualify for the EV tax credit if you’re single and your modified adjusted gross income (MAGI) exceeds $150,000.
The source of restricted income for married couples that present jointly is $ 300,000. And if you register as head of the family and earn more than $ 225,000, you may not be able to claim the tax credits of electric vehicles.
As the senior tax editor at Kiplinger.com, Kelley R. Taylor simplifies federal and state tax information, news, and developments to help empower readers. Kelley has over two decades of experience advising on and covering education, law, finance, and tax as a corporate attorney and business journalist.