Toyota Electric Vehicle Credit Phaseout
Toyota is the latest auto manufacturer to sell enough plug-in electric vehicles to trigger a gradual phaseout of federal tax incentives for specified models sold in the U.S. In its U.S. sales report for the first half of 2022, Toyota Motor North America reported selling over 200,000 electric vehicles. The credit, provided by IRC Sec. 30D, is worth up to $7,500 for purchasers of eligible vehicles but is reduced by half every six months starting two quarters after a company crosses the sales threshold. The IRS tracks the credit amounts for each vehicle make and model year that qualifies for the credit. The page was last updated in May and has not reflected that Toyota has sold over 200,000 electric vehicles. However, it has been confirmed by Toyota that beginning in October the credit will be $3,750. For more information on the electric vehicle credit, click here or reach out to our team of tax advisors.