The federal electric vehicle (EV) tax credit has existed for a while now, and it’s still relevant in 2021. Some EV models are eligible for up to $7,500 off your taxes. This includes some vehicles from Jaguar, including its EV and hybrid models. But, what is the EV tax credit some Jaguar models are eligible for, and how to take advantage of it?
The federal EV tax credit
The federal EV tax credit is designed to encourage EV purchases over vehicles using an internal combustion engine. It’s mainly designed to help protect the environment from carbon emissions since EVs tend to be more eco-friendly.
The amount of the tax credit primarily depends on the battery size. According to the Internal Revenue Service (IRS), the vehicle must be acquired during or after 2010, which will earn a minimum of $2,500. Anything above this amount will depend on the battery. EVs with a 5 kWh battery will earn an additional $417, and for every kWh above this, it will add $417 to the total. The maximum tax credit is $7,500, and there are no exceptions to this cap.
There are limitations to this. If you earn a tax credit above what you owe on taxes, the leftover amount is not refunded or used on next year’s taxes. In addition, once a manufacturer has sold 200,000 electric vehicles from 2010 to now, the tax credit no longer applies to its EV models. Also, the tax credit only applies to new EVs, not used ones.
Despite these limitations, the tax credit may expand soon. The Biden administration is heavily pushing EVs at the moment, and according to Electrek, this amount may be increased to up to $12,500. Currently, this is sitting as a bill, and whether this will pass remains to be seen.
Jaguar models that are eligible for the credit
Jaguar is just starting when it comes to EVs. The company has a few hybrid models so far and one all-electric model, the Jaguar IPace. However, the company has announced plans to place much of its focus on EVs from now on. Many of its vehicles are eligible for the federal tax credit, some of which can net you the full $7,500.
According to the US Department of Energy, the 2021 Jaguar IPace is eligible for a maximum of $7,500. This includes three model types, including the HSE, SE, and S. It has a range of up to 292 miles and is equipped with a 90 kWh battery. In addition, the 2021 model is designed for faster charging than its 2020 counterpart.
The 2021 Range Rover PHEV is one of Jaguar’s hybrid vehicles, and purchasing it can earn you a tax credit of $6,295. It comes with a 13 kWh battery, and the entry-level model is estimated to have 254 hp.
Another model eligible for the tax credit is the Range Rover Sport PHEV, which, like the Range Rover, is also eligible for a $6,295 tax credit. It has even more hp compared to the Range Rover PHEV, coming in at 398 hp. It also has 19 miles of EV-only range and an acceleration from 0 mph to 60 mph in 5.9 seconds.
How to take advantage of the credit
If you’d like to take advantage of the tax credit, the process is simple. All you need to do is calculate and list the EV tax credit on your taxes for the year you purchase an eligible vehicle. You can do this using Form 8936, which you can find on the IRS website.