You can get a $7,500 tax credit to buy an electric car, but it's really complicated

An electric vehicle charges up at a Georgia Power station located in the parking lot of a Burger King in Columbus. (Jill Nolin/Georgia Recorder)

The big climate and health care bill signed into law by President Biden has what at first sight looks like a big incentive for those shopping for a car: a revamped $7,500 tax credit if you buy a new electric vehicle, or $4,000 if you get a used one.

Although tax credits for electric cars have been offered before, the new bill revamps those incentives. But there are so many caveats – on everything from the buyers’ income level to which models can qualify – that many electric cars may actually not be eligible for the tax credit.

Nonetheless, the caveats are there for two key reasons: to eventually make electric cars more affordable for more Americans and to bring more of the production across the supply chain to the U.S.