Federal EV Tax Credits for Used Vehicles
The federal tax credits for used electric vehicles (EVs) and fuel cell vehicles (FCVs) offer incentives to encourage the purchase of environmentally friendly vehicles. Here’s how they work:
Eligibility and Amount of Credit:
- Eligible Vehicles: The credit applies to used EVs and FCVs, including cars and light trucks, purchased from licensed dealers for $25,000 or less.
- Credit Amount: The credit is either 30% of the sale price of the vehicle or $4,000, whichever is lower.
Qualifications:
- Income Limits: Buyers must have a modified adjusted gross income (AGI) below:
- $150,000 for married filing jointly or surviving spouses.
- $112,500 for heads of households.
- $75,000 for all other filers.
- Individual Requirements: The buyer must:
- Be an individual (not a business).
- Not be the original owner.
- Not be claimed as a dependent on another’s tax return.
- Not have claimed another used clean vehicle credit in the previous three years.
Process:
- Dealer Requirements: Sellers must provide the buyer with information about the vehicle’s qualifications and register online to report this information to the IRS. If they fail to do so, the vehicle won’t qualify for the credit.
- Nonrefundable Credit: The credit is nonrefundable, meaning if it exceeds the amount of taxes owed, you can’t receive a refund or apply the excess to future tax years.
Purchases Before 2023:
Purchases made before January 1, 2023, do not qualify for this credit.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-do-the-federal-ev-tax-credits-work-for-used-vehicles/
