The purchase tax credit for new versus used electric vehicles (EVs) differs significantly in terms of the amount and conditions. Here is a comparison:
New Electric Vehicles
- Tax Credit Amount: Up to $7,500.
- Eligibility Criteria:
- Must buy a qualified new plug-in electric vehicle or fuel cell vehicle.
- The vehicle must be used primarily in the U.S.
- Modified Adjusted Gross Income (AGI) limits:
- $300,000 for married filing jointly or a surviving spouse.
- $225,000 for heads of households.
- $150,000 for all other filers.
- Non-Refundable: Excess credit cannot be claimed beyond what is owed in taxes and cannot be carried over to future years.
Used Electric Vehicles
- Tax Credit Amount: Up to $4,000 or 30% of the sale price, whichever is lower.
- Eligibility Criteria:
- Must purchase a qualified used electric vehicle from a licensed dealer for $25,000 or less.
- Not the original owner.
- Not claimed as a dependent on another’s tax return.
- Have not claimed another used clean vehicle credit in the past three years.
- AGI limits:
- $150,000 for married filing jointly or a surviving spouse.
- $112,500 for heads of households.
- $75,000 for all other filers.
- Non-Refundable: Similar to new vehicles, excess credit cannot be claimed beyond what is owed in taxes, and cannot be carried over.
Key Differences
- Credit Amount: New vehicles offer up to $7,500 in credits, while used vehicles offer up to $4,000.
- Price Limit: Used vehicles must be purchased for $25,000 or less to qualify.
- AGI Limits: The income limits are higher for new vehicles than for used vehicles.
- Eligible Purchases: New vehicles can be bought for personal use without price limitations, while used vehicles must meet specific purchase price and dealer conditions.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-purchase-tax-credit-differ-for-new-versus-used-vehicles/
