This isn’t a fancy well-thought out article with clever word-play and the perfect pictures to get the major points across. I just heard about this and I’m getting this out as fast as possible.
A tax credit is better than a tax deduction. A deduction means that lets say you make $40,000 a year, and after all your income is added up, you get to calculate all your allowable deductions from your taxable income.
This tax credit is for “up to” $1500, so lets say your income bracket puts you in a 15% taxes owed on your income. For $40K of income, that would be $6000 in taxes owed. If you can lower your taxable income, then you would pay less total taxes. If you qulaified for the full $1500 as a deduction, then your taxes would be calculated on $38,500 instead of $40,000.
In a 15% tax bracket, that would save you $225 more in actual taxes. So you would owe $5,850 instead of $6,000.
A TAX CREDIT means that (in this case), you get to remove the full $1500 from the $6,000 tax that you would owe, meaning…you would now owe $4,500, instead of $6,000 (hopefully your paycheck taxes with-held would match your taxes owed, so you “break even” at tax time).
As stated, you might get “up to” a $1500 credit to defray 30% of the cost of an electric bike. This means you can buy an electric bike costing as much as $5,000 or more, to get the full $1500 credit.
Of course, a more realistic and common ebike price of $3,000 could mean a tax credit of $900…and a $2,000 ebike might get you a $600 30% credit.
This is just a tax proposal at this stage, and we can all help to make this happen.
This tax credit doesn’t exist yet, but if you’ve read this far, even if you already have an ebike, this could be a huge boost for ebikes across the country.
WARNING! I am not a tax lawyer, nor do I play one on TV.
“…The Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act would relieve 30% of the cost (up to $1,500) of a new electric bicycle for consumers.
Electric bicycles have the ability to displace car trips by keeping people moving with efficiency and ease, no matter their age or physical abilities. An all-in approach to reducing carbon emissions to combat climate change must recognize the ability of electric bicycles to take cars off the road and keep people moving, active, and connected to their communities.
Use this page to encourage your representative to co-sponsor the bill. If your representative is already co-sponsoring the bill, a thank-you note will be sent instead!…“
Written by Ron/spinningmagnets, February 2021