Starting January 1st of 2023, if you purchase a qualified used electric vehicle or fuel cell vehicle from a dealership for $25,000 or less. Buyers may be eligible for a tax credit on purchasing a used electric vehicle. In short, there is a tax credit on used electric vehicles and we are going to share with you how you can take advantage of it.
Purchases made before 2023 do not qualify for the tax credit. This credit is nonrefundable, you cannot get back more on the credit than you owe in taxes and you cannot apply any excess credit to tax years down the road.
Who Qualifies?
According to the IRS website in order to qualify for the tax credit you must:
- Purchase the vehicle for use and not resale
- Not be the original owner of the vehicle
- Cannot be claimed as a dependent on another individual’s tax return
- Not have claimed another clean vehicle credit within 3 years of the vehicle purchase date.
Also, your AGI (modified adjusted gross income) may not exceed:
- For married filing jointly or surviving spouse $150,000
- Heads of household $112,500
- For other filers $75,000
You are able to use your AGI from the year you take delivery of the vehicle or the year before, whichever AGI is less. If your income is below the threshold for 1 of the 2 years, you are able to claim the credit.
Which Vehicles Qualify For The Tax Credit?
In order to qualify, a vehicle must meet the following requirements:
- Have a sale price of $25,000 or less
- The vehicle needs to be 2 years or older. For example, if you are purchasing a vehicle in 2023 the vehicle you are purchasing needs to be 2021 or older.
- Not have already been transferred after 8/16/22 to a qualified buyer.
- Have a GVW (gross vehicle weight) rating of fewer than 14,000 LBS
- Be an eligible FCV or plug-in EV with a battery capacity of at least 7 kWh
- Primary use in the United States
The vehicle purchase only qualifies if:
- You purchase the vehicle from a dealership
- The dealership reports the required information to you at the time of sale and to the IRS.
The following required information includes:
- Dealer’s name and taxpayer ID number
- Buyer’s name and taxpayer ID number
- Sale date and price
- Maximum credit allowable under IRC 25E
- VIN number of the vehicle purchased
- Vehicle battery capacity
List Of Qualified Vehicles:
List Of Manufacturers That Have Entered A Written Agreement But Haven’t Submitted A List Of Specific Makes and Models That Are Eligible:
- General Motors
- Jaguar
- Land Rover
- Kia
- Mazda
- Subaru
After you have made your qualified electric vehicle purchase you will need to complete form 8936, qualified plug-in electric drive motor vehicle credit. The Electric Car Corner here in Upstate, NY is the preferred used electric vehicle dealership in the region. We will help you with your used electric vehicle purchase and any questions you may have. To view our used electric vehicle inventory click here.