We’ve all heard about the Build Back Better bill, but what is it exactly? The Build Back Better bill is a $1.75 trillion plan designed to strengthen the social safety net and fund programs that can help with climate-related issues. A version of the bill is expected to pass this year.
An exciting piece of the bill for those who enjoy the outdoors or are looking for alternate transportation is the refundable 30% tax credit proposed for certain types of ebikes costing up to $4,000. Any American who makes $75,000 or less could qualify for a credit of up to $900 on one bike. Couples who earn up to $150,000 can buy two bikes and potentially qualify for a credit of $900 each.
What are Ebikes?
Ebikes resemble ordinary bicycles, but they include a battery-powered motor that helps move the bike. There are three classes of ebikes:
- Class 1 pedal-assist: These have a low-speed electric motor that kicks in to help with peddling at speeds up to 20 mph.
- Class 2 throttle-assist: These have electric motors that are activated using a hand throttle. Like Class 1 ebikes, the motor speed of Class 2 ebikes is limited to 20 mph.
- Class 3 pedal-assist: These have higher-speed, pedal-engaged electric motors that can reach up to 28 mph.
Class 1, 2, and 3 ebikes will potentially qualify for the tax credit as long as they fit the other requirements outlined above.
Imagine getting around town easily during Cherry Fest instead of dealing with traffic! Talk about a time and stress saver!
Think you might want to test an ebike? Many stores in the Grand Traverse region offer rentals and sales: Bayfront Scooters, Pedego Electric Bikes, Brick Wheels, McLain Cycle & Fitness, Riding Electric, and more. Several companies offer ebike tours of the area as well: Grand Traverse Bike Tours and Bike Tour Vacations.
Ebike or Easy E-Rider?
While ebikes are suitable for shorter trips, electric motorcycles may be an option for those venturing further afield ― say, Suttons Bay to East Bay, or even Elk Rapids! Like electric cars, electric motorcycles are designed with longer trips in mind. There’s also the undeniable fact that the motorcycle is still one of the coolest vehicles on the road (provided you keep the rubber on the pavement and the shiny side up).
The Build Back Better plan also includes a tax credit for electric motorcycles that’s capped at $7,500 and has specific requirements. For example, it must have a speed of at least 45 mph and a 2.5 kWh (or higher) battery. The bill covers electric motorcycles intended for use on roadways—so you may need to save a little more if you want an electric dirt bike or another off-road vehicle.
If you’re under the impression that there’s already a tax credit, you’re correct. There’s currently a 10% tax credit. If passed, the Build Back Better plan would raise it to 30%.
In some cases, two- and three-wheel electric scooters may also qualify for the tax credit. If you aren’t sure whether your dream purchase qualifies, check with the store. They may even have processes to help you claim the tax credit or offer on-site financing.
Whether your goal is to save money or reduce your carbon footprint, there are several attractive electric vehicle options to consider. Regardless of your choice of ride — be it an electric bike, scooter, or motorcycle — don’t forget to protect yourself by picking up the appropriate safety gear, including a helmet!
Erickson Braund is the Founder and Chief Financial Officer at Black Walnut Wealth Management. He is a Certified Financial Planner®️ professional and a Chartered Retirement Planning Counselor®️. Eric brings over 20 years of experience working with high net-worth individuals and families, helping them achieve their goals of protecting and growing their wealth for retirement and for generations to come. Because Eric is a CFP®️ professional, he adheres to high ethical standards and engages in at least 30 hours of approved continuing education in the financial industry each year.
Braund is a Northern Michigan native who truly enjoys all that the area offers, including hiking, biking, swimming, skiing, volleyball, and boating. He loves spending time with his family — his wife, Jodi, and his two children — and maintaining a balanced life. To learn more about Eric Braund, connect with him on LinkedIn.
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