Does The BMW I4 Qualify For The Federal EV Tax Credit?

The federal electric vehicle tax credit is one of the most substantial incentives available to consumers purchasing a new electric vehicle. Worth up to $7,500, this tax credit can make owning an EV like the BMW i4 much more affordable. But do BMW’s sexy new electric sedans actually qualify for the full tax credit?

In this comprehensive guide, we’ll cover everything you need to know:

Overview of the federal EV tax credit
Eligibility criteria for vehicles and buyers
Confirmation of the BMW i4’s qualification
How to claim the credit when purchasing
Phase-out rules and duration of availability
Other purchasing incentives for the i4
The financial appeal and savings

Let’s get straight into the details.

A Quick Refresher: How Does the Federal EV Tax Credit Work?

The federal EV tax credit originally came into effect in 2009 and aims to incentivize the transition to electric vehicles. For qualifying purchases, it can reduce your tax bill by up to $7,500.

The amount of credit depends on the size of the vehicle’s battery:

$2,500 minimum for a 5 kWh battery
Additional $417 for each extra kWh
Up to $7,500 for 16 kWh or larger capacity

So vehicles with larger batteries get the buyer a bigger tax break. Pretty simple right? Well as of January 2023, it has become a bit more complicated…

Tighter Eligibility Rules Under the Inflation Reduction Act

The recent Inflation Reduction Act introduced new requirements for the types of electric vehicles and buyers eligible for the full $7,500 tax credit. This updated criteria includes:

Manufacturing location – Final assembly must occur in North America
MSRP thresholds – Sedans can cost up to $55,000, while SUVs, trucks and vans qualify up to $80,000
Battery component sourcing – Percentages of minerals and parts must originate from the U.S. or free trade agreement partners
Critical mineral sourcing – At least 40% of minerals for the battery cathode must be sourced from the U.S. or a partner country
Buyer income limits – Single filers are phased out above $150,000 annual income, joint filers $300,000, head of household $225,000

These extra requirements aim to encourage more domestic manufacturing. But don’t worry – as we’ll cover next the BMW i4 still makes the cut!

The BMW i4 Comfortably Meets the Updated Eligibility Criteria

The sleekest 4-door coupe on the road, the BMW i4 eDrive40 has an MSRP starting from $51,400 while the sportier BMW i4 M50 kicks off at $65,900. Clearly both models sit comfortably under the sedan price thresholds.

Production also takes place at BMW Group Plant Munich in Germany, which meets the latest rules for North American assembly.

The i4’s battery pack is locally manufactured in the United States before being shipped to the Munich plant for installation. BMW sources cobalt and lithium from approved countries like Australia and Morocco to meet the mineral sourcing requirements. Nickel comes from production sites in Finland and New Caledonia.

So thesourcing of critical minerals and battery components ticks the appropriate boxes for qualification as well.

Adding it all up, both the BMW i4 eDrive40 and BMW i4 M50 variants meet the eligibility criteria to qualify for the full $7,500 federal tax credit. Nice!

Claiming the BMW i4’s $7,500 Credit at Time of Purchase

Thanks to recent enhancements to the program, you can now claim the BMW i4’s EV tax credit instantly when buying or leasing rather than waiting until you file taxes.

This credit will appear as an upfront discount on your purchase price. So if you buy or lease a BMW i4 eDrive40 for example, you’ll immediately save $7,500 off the MSRP.

Before expiry, claim up to $7,500 off your BMW i4 purchase price as an instant discount!

However, the amount you can actually use does depend on your personal tax liability for the year. If you only end up owing say $5,000 in federal tax, your credit would max out at that $5k amount.

Those with higher incomes also need to be aware of phase-out thresholds which gradually reduce the available credit:

Singles filers – begins at $150,000 modified adjusted gross income, zero credit at $250,000
Joint filers – phase-out starts at $300,000, ends at $450,000
Head of household – begins phasing out at $225,000 down to zero at $375,000

So while the BMW i4 definitely qualifies for the full $7,500 based on vehicle specs and pricing, an individual’s tax situation does impact the real world value.

Lock In Your BMW i4 Tax Credit Before Expiry

The electric vehicle tax credit has caps in place once an automaker sells 200,000 eligible vehicles in the US. At that point, the credits start getting phased out on a timeline.

Luckily BMW is a long way off hitting their 200k cap. So you’ve got ample opportunity to take advantage of the offer if an i4 eDrive40 or M50 is on your shopping list.

Given the stringent new eligibility rules, we also expect fewer models overall will qualify going forward. That tightening supply suggests BMW could reach their limit quicker than anticipated.

In other words, the window to grab a $7,500 credit for the BMW i4 likely won’t stay open forever. Savvy buyers looking to maximize savings will want to act sooner rather than later.

Combine the Credit with Other BMW i4 Incentives

On top of the federal tax credit, further incentives and rebates may be available:

State rebates – California offers up to $2,000 while states like New York, New Jersey, Massachusetts and Connecticut also have programs
BMW retail offers – The automaker provides additional purchasing incentives which vary by region and time. Recently these have ranged $500 to $3,500
Lease benefits – If buying outright isn’t in your plans, leasing a BMW i4 may allow you to access an additional $7,500 credit

With the right combination of federal, state and manufacturer incentives, you could potentially knock more than $15,000 off the purchase price of a new BMW i4!

If going down the leasing path, also keep in mind that:

The tax credit goes to the vehicle owner rather than lessee
Lessors often apply the credit upfront to reduce monthly payment amounts
At lease end you forgo any ownership, unlike purchasing

Always read the fine print, but leasing can be a creative way to help offset the higher upfront costs of advanced electric vehicles.

Driving the BMW i4 Costs Less Than You’d Think

For some buyers, the environmental benefits of driving electric provide incentive enough. But most consumers primarily care about the bottom line.

How much will owning this beautiful BMW set me back?

Factoring in potential fuel and maintenance savings, the lifetime costs of the i4 can pleasantly surprise:

BMW i4 Cost Saving Projections

	BMW i4 eDrive40	BMW i4 M50
MSRP	$51,400	$65,900
Potential Federal Tax Credit	Up to $7,500	Up to $7,500
First Year Fuel Costs	$600	$900
5 Year Fuel Costs	$3,000	$4,500
Maintenance Savings	50% lower	50% lower

* Projections based on average US mileage and electricity/gasoline rates

Accounting for the EV tax credit and long-term savings, the sticker price doesn’t tell the real ownership story. Depending on your driving patterns, the i4 could cost potentially tens of thousands less to own than a comparable gas-powered BMW.

Pair the savings with exhilarating instant torque acceleration in as little as 3.7 seconds, and the BMW i4 shapes up as a financial home run.

Check Out BMW i4 Deals in Your Area

If reading this analysis has you itching for a test drive in BMW’s latest electric sedan, use the tool below to check for i4 inventory and offers in your area Here are some additional sections to keep the article going:

Maintaining Eligibility for the BMW i4’s Tax Credit

While the BMW i4 serves up colossal bang for the buck, only credit-eligible buyers reap the full benefit. As we covered earlier, your individual tax liability caps the credit’s real-world value.

When claiming your qualifying BMW i4’s credit at the dealership, be prepared to provide your latest tax return or W-2 as proof of eligibility. You may also authorize the IRS to disclose recent tax data via Form 8821 to streamline credit confirmation.

If expecting a significant change in your 2023 income, submitting multiple years’ returns helps substantiate your eligibility if borderline. Just don’t get too creative – tax fraud charges for misrepresenting income aren’t worth the audit risk!

Tips for Maximizing Savings on Your New BMW i4

Beyond capturing available incentives, a few key strategies can help amplify your EV savings:

Charge overnight with time-of-use rates – Plugging in when electricity demand is lower means cheaper charging costs.

Leverage loyalty discounts – If you’re a repeat or existing BMW owner, extra rebates may apply when upgrading.

Negotiate additional dealer discounts – With inventory rising as demand cools, now is an opportune time to score a once-in-a-generation deal.

Pay attention to financing rates – Consider outside financing if the dealership can’t match the best interest rates. Going from 5% down to 2% APR saves $2,500+ in interest payments.

Research insurance costs – EV insurance remains a bit specialized, so quote around to find the best blend of premiums and coverage.

Following these tips stacks the financial deck further in your favor when purchasing the i4. Because even with incentives, this BMW still commands a luxury price tag for most buyers. Maximize savings where possible!

Experience the Innovation of the Ultimate Electric Driving Machine

BMW sets the gold standard for blending technology, luxury and performance. Their initial electric offerings reflect decades of engineering prowess focused into a thrilling yet tranquil ride.

As the specs and sales numbers confirm, the sophisticated and rapid BMW i4 comfortably qualifies for the full $7,500 federal tax credit. Combined with additional purchase incentives and long term operating cost savings, this sleek EV sedan earns its place among the upper echelon of affordable premium EVs.

Find an i4 at a dealer near you today and discover the innovation that earned BMW the title as the Ultimate Driving Machine – now available without a drop of gas!