The US Treasury Department has made a crucial revision to the vehicle classification standard for the $7,500 Inflation Reduction Act tax credit, bringing good news for those considering purchasing a Tesla Model Y. Previously, this electric vehicle was not eligible for the credit as it was classified as a sedan, and its cost exceeded the $55,000 maximum limit for sedans to qualify.
Similarly, the Volkswagen ID.4, Cadillac Lyriq, and the Ford Mustang Mach-E faced the same issue as they too were priced above the maximum threshold for sedans. With the updated classification standard, these vehicles may now be eligible for the tax credit, making them more accessible and affordable for consumers.
A new classification system has been implemented, putting a $80,000 price cap on certain cars. Crossovers with similar characteristics are now “uniformly classified” according to the Treasury Department.
Good news for those who already purchased one of these cars: as long as the purchase was made after January 1 and you meet all other eligibility criteria, you can still claim the tax credit.
