[Zeke]

When I was in the window replacement business a federal tax credit could be a percentage of your contract cost. There could be a rebate applied to a utility bill too. The City of Long Beach has its own public utilities save for SoCal Edison so we didn't get anything from the gas company serving much of L.A. County. Edison was alway stingy.

The flat rate tax credit seems to have been an invention that came with electric car, hybrid or otherwise. I took it to mean the same thing, a direct federal credit reducing income taxes incurred during the tax year in which the car was purchased. I haven't followed the state incentives.

Not reading extensively, it seems the rules have changed for 2023 to 2032 in that the amount stated as up to $7500 is now applied to your taxable income as adjusted gross income.

Further reading suggests that in 2024 the dealer will take the $7500 off the selling price of the car and deal with your taxes for you. Apparent is you owe less tax for the year in which you bought the car. According to what I'm reading this is not the case at present.

There are conflicts in information about min and max income and how that affects the credit, so the OP's question is a good one. Like anything else IRS, it's not easy to understand.

So by the time this gets hashed out here we will know how it works for this year, but >2024 seems pretty straight forward.