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Electric Vehicle information for Atlanta and Georgia

EV tax credits

Sections below:

Federal tax credit introduction

For many years there has been a $7,500 Federal tax credit incentivizing the purchase (or lease) of an electric vehicle, and it was pretty simple.  Any pure electric car got the full credit, and PHEVs got a credit too although often less than the full $7,500 depending on battery size.  There was a 200,000 car max per manufacturer, which perversely penalized the manufacturers who were earliest to develop and sell large quantities of EVs (Tesla and GM).  But with that said, the tax credit was still pretty simple to understand.

In August 2022, the Inflation Reduction Act was passed, and it introduced a completely new structure for EV tax credits.  It’s still $7,500 (max per car), but nearly every thing else changed, because the Biden administration is trying to use this to incentivize manufacturers to set up their supply chains and assembly in the United States.  The references / articles section below will provide better detail, but here are summaries of the immediate impact and the longer-term impact.

EV purchase tax credit in 2022

The following changes took effect immediately upon the passage of the new IRA law:

  • only cars with “final assembly” in USA* qualify (*actually USA and any free trade partners, e.g. Mexico and Canada)
  • cars that do NOT meet final assembly requirement can still qualify for tax credit if the buyer had a “written binding agreement to purchase” as of 16-Aug-2022
  • Tesla and GM still do not qualify, period (because the old 200k unit max still in effect)

This had the immediate effect of disqualifying most pure electric cars from the tax credit, including nearly every EV from a foreign carmaker.  Until the end of 2022, the Nissan Leaf, Ford Mach-E and Ford F-150 Lightning are actually now the only pure EVs that qualify, because they receive final assembly in North America.  Conversely, quite a few PHEVs continue to qualify, even get a slightly larger tax credit, because many of those models are assembled in North America.  See the EV fact sheet for lists of specific cars (both EV and PHEV) that are actually available in Georgia and their prices after tax credit.

This is just a summary of the immediate impacts in 2022; see the references / articles section below for more complete details.

EV purchase tax credit in 2023

A hallmark of the new EV tax credit is that it will change pretty much every year; the SAFE / EC fast sheet in the references / articles section below has a good chart that shows this.  Starting on January 1st, 2023, the tax credit requirements change as follows:

  • the old 200k unit cap per manufacturer goes away, so Tesla and GM cars may qualify again if they meet the other new requirements
  • MSRP cap of $55k for cars and $80k for SUVs, including options; the EPA decides which category a vehicle is in
  • income limit of $150k for single or $300k for joint
  • first battery requirements kick in (both “mineral sourcing” and final assembly location)
  • used cars get a credit: $4k for price up to $25k (or 30%, whichever is less); must be sold via dealer, no private sales; income limits of $75k single or $150k joint

Again that’s just a summary; see the references / articles section below for more complete details.

Up through end of 2023, this is all still about a tax credit that you file for on your tax return.  Since you won’t get that credit until you file and then get your refund, you need to rely on statements from the manufacturer or IRS (or worse, the dealer) on what the car’s eligibility for the tax credit is.

2024: new POS / transferability / instant rebate mechanism

The legislation specifies continued incremental changes year over year, and a big one coming in January 2024 is that all credits will available as Point Of Sale (POS) credit, specifically because the tax credit due to you will be “transferable” to the dealer.  This means that you can effectively get the credit right away at the moment of purchase as an instant rebate, and don’t have to wait to claim it on your tax return a year or so later.

Note that this means you will see the exact amount of the tax credit (and use it to reduce the cost of the car) on day of purchase, and no longer need to rely on dubious statements as described in the 2023 section above.

This new POS / transferability feature applies to both new and used sales.

Other impacts

  • more stringent battery requirements kick in every year; see the SAFE / EC fact sheet linked below for details
  • generous credits for commercial vehicles (e.g. delivery trucks, dump trucks)
  • the battery sourcing requirements do not apply to purchase of used EVs or commercial vehicles
  • new credit for bi-directional charging stations (power house or business from car)
  • credit for “commercial charging” stations
  • there may be incentives for recycled batteries, e.g. batteries original made in China but then recycled / refurbished in US
  • NO credit for electric bikes or electric motorcycles
  • all of these tax credits will sunset after 10 years, in December 2032

References / articles

Filing details

  • can NOT be carried over year to year — you need $7500 of federal income tax liability in a single year to maximize the credit; see below for longer explanation of credit vs deduction and your tax liability (which may be more than you think)
  • use IRS form 8936 (not 8834)  (note: may change for tax year 2022)
  • If you are leasing, you don’t need to worry about any of the above details (tax liability or IRS paperwork). The tax credit is already rolled into your lease in the form of a lower payment. The leasing bank takes the credit and passes it through to you in the lower lease cost.

Tax credit basics (these are credits, not deductions)

These are tax credits, not tax deductions. Assuming you have enough tax liability, a tax credit can be thought of as a direct refund to you, typically in the form of a refund check after your file your tax return with the IRS.

Many people misunderstand the concept of a tax credit, or don’t realize how much state or federal income tax they pay every year. The EV incentives discussed here are tax credits, which are far more valuable than just tax deductions. When looking at your tax liability to the US or to Georgia, look for the “total tax” line on your most recent tax return — NOT the refund or amount-due line! The total tax line is the actual tax you’ve been paying, usually via withholding on every paycheck. The refund / amount-due line is what was left over after your paycheck withholdings were accounted for. Don’t mix up these two numbers!

All major tax preparation software packages support the various forms required to collect these tax credits.

Information about the Georgia state tax credit (for historical reference)

Georgia tax credit:
… was killed in 2015! (info below was useful until then)
– … is an income tax credit (not deduction!) of $5000 for purchase or lease of pure electric cars (e.g. Leaf yes, Volt no)
– … CAN be carried over year-to-year for five years, which is useful if you don’t have $5000 of state tax liability in a single year
The Georgia paperwork process is described in both of these links:
– Unlike the federal credit, for the state credit you DO need to file your own paperwork, even if you are leasing; if a dealer tells you otherwise, politely ignore them because they are confused.
– The state tax credit ended July 1st 2015 however as long as you bought or leased your EV before that date you still qualify for the credit
– You need to file a form with the state environmental office at least a month before you file your tax return! Read the instructions linked above. If you put off your tax paperwork until early April you may find that you are doing so too late to collect the state tax credit.

The 2015 threat to the state tax credit

The Georgia legislation that enabled the state tax credit many years ago did not have a sunset provision, or a budgetary cap. However, it was only in 2011 that usable EVs finally arrived on the market and more and more people started claiming the credit, and within a couple years state legislators started to notice the growing line item in the state budget. In the 2014 session of the state legislature, the credit nearly got killed outright, and was only saved in the last hours of the session. The credit was eventually killed in the 2015 session, despite concerted efforts during 2014 that resulted in proposed compromise legislation (HB 220) that ramped down the tax credit.

This Atlanta EVDC article summarizes how terrible the 2015 session was for EV policies.

Here’s another post-mortem by Maria Saporta — “we have managed to go from being among the best to the worst in just one legislative session.”

During the 2015 legislative battle, I put together the information below to provide resources to assist YOU, the citizen, in explaining to your state legislators (and neighbors, and coworkers, and strangers …) why EV-friendly policies are good for Georgia.

GAEVCredit.com — this website was launched in early 2015 by the people who had worked to create some compromise legislation. The end result of their work was HB 220, a bill that provided a “workable compromise” to gradually sunset the tax credit and also address some unfair parts of the old legislation. See this website for information about that bill and how the tax credit benefits all Georgians.

www.UCSUSA.org/ElectricVehiclesGeorgia — The Union of Concerned Scientists (UCS) is a national organization that is helping us get the word out to Georgians about the benefits of EVs. This link takes you to excellent material in support of continuing the tax credit and information about how EVs are a good choice in general.

“Electric Vehicles and Georgia (2015)” — accessed via the main UCS link above, this four-page fact sheet summarizes the main reasons to support EV-friendly polices in Georgia, including:
– EVs are cheaper to fuel
– EVs keep more money in the state
– EVs are cleaner (even when powered by a dirty power grid)
– EVs pair well with renewable energy sources

Comparison table of three bills in Georgia House (HB 122, HB 176, HB 220) — this excellent table will help you make sense of the different bills being considered; note that HB 220 is the consensus bill that is gathering the most support. This table comes from this article from the Atlanta EVDC. Note that this table is from mid February and may be dated information at any time after then, since the legislative situation can change quickly.

EV tax policy defense talking points and Transportation Committee contact lists (Google Doc)

Impact of Elimination of the Electric Vehicle Tax Credit on the Georgia State Economy, a report that shows how eliminating the tax credit would negatively impact Georgia’s economy by hundreds of millions of dollars over the coming years. The report was commissioned by a nonpartisan group of business executives and retired senior military leaders concerned about global energy security, known as Securing America’s Future Energy (SAFE).

Below are two articles by Tim Echols, member of Georgia’s Public Service Commission and a happy EV owner. Each of these serves as a fantastic collection of quick talking points to review with any state legislator (or your neighbor, or your Facebook friends), reasons why we should keep the EV tax credit.

Why Retain the ZEV/LEV Income Tax Credit In Georgia?

Keep Georgia’s EV tax credit in place

(in the second link, Mr. Echols’ position is followed by that of a state rep who wants to kill it)

In summary:
– EVs keep more money close to home instead of sent to oil companies out of state or overseas.
– The tax credit received comes back after we file our taxes as a refund, and then gets spent. It buys things in Georgia like clothes, appliances and services.
– EVs fit nicely with our electric grid here. Overnight charging takes advantage of the excess capacity we have at those times.
– EVs help Atlanta’s smog problem and will help us get back in compliance with the EPA.
– EVs send a strong message to millennials about our priorities. This investment makes Atlanta a more livable city where people want to be.

And I’ll quote the first article’s closing paragraph in total, because it’s so good:

Nissan is having great success with the LEAF and Georgia is the 2nd largest market in the U.S. for all EVs. But behind Nissan, BMW, Kia and many other manufacturers are coming with electric cars. Our message to the legislature needs to be to hold off for another year before taking action. Let’s allow the other manufacturers to benefit as Nissan has done. Then, if they decide to eliminate this credit, do it slowly and phase it out over the next decade. Georgia has a great business climate, in part because we don’t make knee-jerk regulations causing uncertainty and confusion in the marketplace. Let’s not change that now.

Seriously, read the article, because it’s a great summary of the issues.

You don’t have a lot of time, and you just want to fire off an automated email to legislators about this? Use this form at bit.ly/GaEVTax to voice your support for EV-friendly state policies. It’ll use your ZIP code to figure out who to send it to, and put your name on it. A phone call can make more impact, but if you don’t even have the time to do that, at least fire off one of these automated emails.

Finally, use this link to look up who your state legislators are (you have two) and pick up the phone and CALL THEM to let them know your position on EV-friendly policies! Also consider contacting the relevant committee members and legislative leadership.

Take the time to talk to your friends and co-workers about this. There’s a lot of misinformation out there, and if you are an EV owner, YOU are uniquely qualified to correct and educate.