Federal Tax, Tax

Gradual Phaseout of Toyota’s EV Tax Credits

Toyota is the latest auto manufacturer to sell enough plug-in electric vehicles (EVs) to trigger a gradual phaseout of federal tax incentives for specified models sold in the U.S., joining Tesla and General Motors. Toyota reported that it has sold more than 200,000 EVs, meaning that its federal EV credits will begin to dwindle in value later this year. The credit, worth up to $7,500, is available to purchasers of eligible EV vehicles but is halved every six months starting two quarters after a company crosses the 200,000 sales threshold. Toyota’s EV credit phaseout will begin Oct. 1, 2022, when purchases will qualify to receive up to 50% of the federal tax credit ($3,750). Contact us with questions about these credit phaseouts. © 2022