Want to Lease an EV? There's a Tax Credit 'Loophole' for That

If you are deciding whether to lease or buy an electric vehicle, here is what you need to know about how the EV lease tax credit works.

white electric vehicle next to ev charger
(Image credit: Getty Images)

The number of people choosing to lease an EV has grown. Data show that a little over 40% of electric vehicles were leased overall last April, up significantly compared to the previous year, according to Edmunds.  While there are many reasons why drivers opt to leave vs. buy a vehicle, the boost in electric car leases could be partly due to a federal EV lease tax credit “loophole” in the Inflation Reduction Act .

So, are you in the market for a new electric vehicle? If so, here’s some tax information that might help you decide whether to buy or lease an EV.

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Kelley R. Taylor
Senior Tax Editor, Kiplinger.com

As the senior tax editor at Kiplinger.com, Kelley R. Taylor simplifies federal and state tax information, news, and developments to help empower readers. Kelley has over two decades of experience advising on and covering education, law, finance, and tax as a corporate attorney and business journalist.