How Do I Qualify for the Clean Vehicle IRS Tax Credit?

clean vechicle

If you are interested in buying a new or used clean vehicle, you may be eligible for a tax credit from the IRS. A clean vehicle is a plug-in electric vehicle (EV) or a fuel cell vehicle (FCV) that meets certain criteria. Here are some of the requirements and benefits of the clean vehicle tax credit:

• You must buy the vehicle for your own use, not for resale, and use it primarily in the U.S.

• You must not be claimed as a dependent on another person’s tax return.

• Your modified adjusted gross income (AGI) must not exceed $300,000 for married couples filing jointly, $225,000 for heads of households, or $150,000 for all other filers. You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less.

• The final assembly of a new clean vehicle must occur within North America.

• The vehicle must have a battery capacity of at least 7 kilowatt hours and meet critical mineral and battery component requirements.

• The vehicle must not exceed a manufacturer suggested retail price of $80,000 for vans, sport utility vehicles and pickup trucks, or $55,000 for other vehicles.

The amount of the credit depends on when you placed the vehicle in service (took delivery), regardless of purchase date. For vehicles placed in service before April 18, 2023, the credit is up to $7,500. For vehicles placed in service on or after April 18, 2023, the credit is up to $3,750 if the vehicle meets either the critical minerals requirement or the battery components requirement, or up to $7,500 if it meets both.

To claim the credit, you must file Form 8936 with your tax return.

You can find more information on the IRS website or contact us 512-354-7878!