Here’s a comparison of federal tax incentives for new vs. used electric vehicles (EVs) in the U.S.:
New EV Tax Credit
- Amount: Up to $7,500
- Eligibility:
- Price: No explicit price cap, but final assembly must be in North America (additional manufacturing/battery requirements apply).
- Income limits:
- $300,000 (married filing jointly)
- $225,000 (head of household)
- $150,000 (other filers)
- Additional rules:
- Battery components and critical minerals must meet sourcing requirements (phased in through 2024–2029).
- Leased vehicles may qualify without income or sourcing restrictions if treated as commercial purchases.
Used EV Tax Credit
- Amount: 30% of sale price, up to $4,000
- Eligibility:
- Price: Vehicle must cost $25,000 or less.
- Income limits:
- $150,000 (married filing jointly)
- $112,500 (head of household)
- $75,000 (other filers)
- Additional rules:
- Prior ownership: Must not be the original owner.
- Frequency: Cannot claim another used EV credit within 3 years.
- Dealer requirements: Sellers must register with the IRS and provide buyer documentation.
Key Differences
| Feature | New EV Credit | Used EV Credit |
|---|---|---|
| Max Credit | $7,500 | $4,000 |
| Price Cap | None (assembly rules apply) | $25,000 |
| Income Limits | Higher thresholds | Lower thresholds |
| Transferable | Yes (at point of sale) | Yes (at point of sale) |
| Resale Rules | No restrictions | Cannot be original owner |
Both credits are nonrefundable, meaning they can’t reduce your tax liability below $0. Used EV buyers face stricter price and income limits but benefit from a simpler percentage-based calculation. New EV credits include more complex eligibility criteria tied to manufacturing and supply chains.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-do-the-incentives-for-new-evs-compare-to-those-for-used-evs/
