Right now, consumers who purchase a brand new Chevrolet Volt have to wait until they file their taxes to receive the $7,500 tax credit. That long wait may go away if President Obama gets his wish. The president’s fiscal year 2013 budget includes several changes to the electric vehicle tax credit, including the elimination of the delayed tax credit.
Instead of waiting until tax filing time to receive a tax credit, customers would get the tax credit at the time of sale if Obama's plan is approved. This involves switching the rebate from a tax credit for consumers to an advanced technology vehicle credit.
Another big change is an increase in the value of the tax break. The new budget proposes that the top-of-the-line vehicle credit be boosted to $10,000 from $7,500. This amount would slowly phase out over the following six years with the first decrease, to $7,500, projected for 2017. The advanced technology vehicle credit would be reduced to $5,000 per vehicle in 2018 and then $2,500 in 2019.
Although the budget lacks information about specific vehicle eligibility as well as whether or not it would be a tax credit available only the automakers or dealerships that sell the vehicle, it does appear that the purpose of this switch is to encourage automakers to boost production of electric and alternative fuel vehicles.
While it may initially sound like consumers would have to pay $7,500 more per Nissan Leaf, Chevy Volt or other eligible vehicle, they would actually be saving money. The $7,500 price reduction would jump to $10,000 in some cases and the sticker price would already reflect this discount. No more waiting until tax time and no more concern about whether that tax credit paperwork was filed properly.