Incentives for Electric Vehicles
The U.S. government offers a “clean vehicle tax credit” to car buyers who purchase a new or previously owned electric vehicle. The credit will be worth different amounts depending on certain factors, read more below!
$7,500
Maximum New Vehicle Federal Tax Credit
$4,000
Maximum Pre-Owned Vehicle Federal Tax Credit
Beginning in 2024, buyers will be able to transfer clean vehicle credits to dealers at the time of sale, and use the credit amount as a down payment at time of sale. Only dealers that register with the IRS will allow the credit as a down payment. Source : IRS
How to obtain the credit:
Buy the electric vehicle, and during sale make sure to get the Required Information
Complete Form 8936: Qualified Plug-in Electric Drive Motor Vehicle Credit
File this form with your tax return the year that you purchased the vehicle
Credit amount:
$3,750 if the vehicle meets the critical minerals requirement only
$3,750 if the vehicle meets the battery components requirement only
$7,500 if the vehicle meets both
See which vehicles meet the requirements here
Qualifications:
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Income cannot exceed:
$300,000 for married couples filing jointly
$225,000 for heads of households
$150,000 for all other filers
*The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes
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You buy the vehicle new
The seller must report the required information to you at the time of sale and to the IRS.
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Vehicle can be used for individuals and for businesses
Vehicle must be for use, not resale
Vehicle use must be primarily in the U.S.
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The vehicle must:
Have a battery capacity of at least 7 kilowatt hours
Have a gross vehicle weight rating of less than 14,000 pounds
Be made by a qualified manufacturer
Undergo final assembly in North America
Meet critical mineral and battery component requirements, see Credit Amount section
Have an MSRP/retail price of less than:
$80,000 for vans, sport utility vehicles and pickup trucks
$55,000 for other vehicles