The EV tax credit differs notably between new and used electric vehicles primarily in the amount of the credit, eligibility criteria, and purchase conditions:
For New Electric Vehicles:
- Buyers of new qualified plug-in electric vehicles can receive a federal tax credit of up to $7,500.
- This credit applies to new EVs purchased between 2023 and 2032, subject to meeting specific eligibility requirements under the Internal Revenue Code Section 30D.
For Used Electric Vehicles:
- Buyers of qualified used electric vehicles purchased from licensed dealers for $25,000 or less may be eligible for a tax credit of up to $4,000, which equals 30% of the sale price.
- To qualify, the vehicle must be bought from a licensed dealer starting January 1, 2023; private sales do not qualify.
- Additional eligibility conditions include the buyer not being the original owner, not claiming another used EV credit in the past three years, and income limits based on modified adjusted gross income (AGI):
- $150,000 for married filing jointly,
- $112,500 for heads of households,
- $75,000 for all other filers.
- The credit for used EVs is nonrefundable, meaning you cannot receive more than you owe in taxes, and unused credit cannot be carried forward.
- Sellers must register and report the sale to the IRS for the vehicle to qualify for the credit.
Summary Table
| Aspect | New EV Tax Credit | Used EV Tax Credit |
|---|---|---|
| Maximum Credit | Up to $7,500 | Up to $4,000 (30% of sale price) |
| Purchase Price Limit | No specific limit | $25,000 or less |
| Eligible Sellers | New vehicle purchase from dealer | Licensed dealer only |
| Purchase Date Requirement | Purchases 2023–2032 | Purchases from Jan 1, 2023, onwards |
| Income Limits | None | Yes, varies by filing status ($75K–$150K) |
| Refundability | Refundable up to tax liability | Nonrefundable, no carryforward |
| Original Owner Restriction | None | Buyer cannot be original owner |
In short, new EV buyers can get a higher credit with fewer restrictions, while used EV buyers get a smaller, income-limited credit mainly aimed at encouraging affordable used EV purchases through dealers.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-ev-tax-credit-differ-for-new-and-used-electric-vehicles/
