Trystan Casey
Electric vehicles are becoming increasingly popular, and with them, the question of how to claim credit for their purchase. The federal EV tax credit is a benefit for those who purchase qualifying new or used electric vehicles, and it can be worth up to $7,500. The credit is non-refundable, meaning it can reduce your tax liability to $0, but if your credit exceeds the tax you owe, you won't get any excess refunded. To claim the credit, you'll need to file IRS Form 8936, the Qualified Plug-in Electric Drive Motor Vehicle Credit form, and provide your vehicle's VIN. This credit is available for vehicles purchased from 2023 to 2032, and you can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever helps you meet the requirements.
| Characteristics | Values |
|---|---|
| Vehicle type | Plug-in electric or fuel cell vehicle with a battery capacity of at least 7 kilowatt hours |
| Purchase price | $25,000 or less |
| Vehicle age | Must be new or at least two years old |
| Vehicle weight | Less than 14,000 pounds |
| Manufacturer | Must be a qualified manufacturer, with vehicles undergoing final assembly in North America |
| Number of claims | Credit can only be claimed once every three years |
| Income | Income must fall below certain thresholds; modified AGI may not exceed $300,000 for married couples filing jointly or a surviving spouse |
| Forms | File Form 8936 with your tax return for the year in which you take delivery of the vehicle |
| Other | Installing an electric vehicle charger at your home may make you eligible for the Alternative Fuel Vehicle Refueling Property Tax Credit or the EV charger tax credit |
Explore related products
What You'll Learn
Claiming the credit on your tax return
If you purchased a new, qualified plug-in electric vehicle (EV) in 2022 or before, you may be eligible for a clean vehicle tax credit of up to $7,500 under Internal Revenue Code Section 30D. The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles purchased from 2023 to 2032. The credit is available to individuals and their businesses. The vehicle must be used primarily in the U.S., and your modified adjusted gross income (AGI) may not exceed $300,000 for married couples filing jointly or a surviving spouse. You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your modified AGI is below the threshold in one of the two years, you can claim the credit.
To claim the credit for a vehicle you took possession of in 2022, file Form 8936, Clean Vehicle Credits with your 2022 tax return. You will need to provide your vehicle's VIN. If you missed claiming a credit for an electric vehicle purchased before 2022, you may be able to claim it by filing an amended return for the tax year when you took possession of the vehicle.
If you purchased and took delivery of a qualified electric vehicle between August 17, 2022, and December 31, 2022, the same rules apply, plus the vehicle must also undergo final assembly in North America. You must file Form 8936 when you file your tax return for the year in which you take delivery of the vehicle. This is true whether you transferred the credit at the time of sale or are waiting to claim the credit when you file.
If you are installing an EV charger at your home, the federal credit is generally 30% of the charger's cost or $1,000, whichever is smaller. For those wanting to install an EV charger at a business or investment property, the credit is generally 30% of the charger's cost or $30,000, whichever is smaller. You can claim the EV charger tax credit the following year on your income taxes using IRS Form 8911.
Claiming Colorado's Electric Vehicle Credit: A Step-by-Step Guide
You may want to see also
Explore related products
Eligibility criteria for your vehicle
To qualify for the EV tax credit, your vehicle must meet specific eligibility criteria. The following are the requirements for vehicles purchased in 2024 and 2025:
- The vehicle must be purchased new.
- The manufacturer's suggested retail price (MSRP) must not exceed certain thresholds, which vary depending on the type of vehicle. For example, for vans, SUVs, and pickup trucks, the MSRP must not be over $80,000.
- The vehicle must have a battery capacity of at least 7 kilowatt-hours.
- The gross vehicle weight rating must be less than 14,000 pounds.
- The vehicle must be made by a qualified manufacturer (this criterion does not apply to fuel cell vehicles).
- The vehicle must undergo final assembly in North America.
- The vehicle must meet the critical mineral and/or battery component requirements (for vehicles placed in service on or after April 18, 2023).
- The vehicle must be purchased through a dealer.
- The dealership must report the required information, including your name and taxpayer identification number, to both you and the IRS.
- The vehicle must be used primarily in the U.S.
- The vehicle must be made by a manufacturer that hasn't sold more than 200,000 EVs in the U.S.
- The vehicle must be purchased or leased before the specified deadline. For example, in Colorado, the EV must be titled and registered in the state and purchased or leased before January 1, 2029.
It is important to note that eligibility criteria may vary slightly depending on the state and year of purchase. Additionally, the eligibility criteria for used EVs may differ from those for new EVs. For instance, to qualify for the used EV tax credit in 2024, your modified adjusted gross income (AGI) must not exceed certain thresholds, such as $150,000 for married couples filing jointly.
Explore related products
Income requirements
If you are considering purchasing an electric vehicle (EV), you may be eligible for a federal tax credit of up to $7,500. This incentive is designed to encourage the adoption of environmentally friendly vehicles and reduce carbon emissions. However, it's important to note that there are specific income requirements that you must meet to qualify for this credit.
Firstly, it's essential to understand that the tax credit is based on your modified adjusted gross income (MAGI). This is generally your adjusted gross income (AGI) with certain allowable deductions added back in for the current or prior tax year. Your MAGI can be found on Line 11 of Form 1040, and it is used to determine your eligibility for various tax breaks. When claiming the EV credit, you can use the lesser of your MAGI in the year you purchase your EV or your MAGI from the previous year.
The income limits for the EV tax credit vary depending on your tax filing status. For single filers, the income limit is $150,000. If your modified adjusted gross income exceeds this threshold, you will not qualify for the EV tax credit. For married couples filing jointly or a surviving spouse, the income limit is set at $300,000. It's important to note that these limits may change over time, so be sure to check the most current information when filing your taxes.
In addition to income requirements, there are other specifications that your vehicle must meet to qualify for the tax credit. The vehicle must be a new, qualified plug-in EV or fuel cell electric vehicle (FCV) with at least 7 kilowatt-hours of battery capacity. The purchase price of the car must be $25,000 or less, and the car model must be at least two years old. The vehicle must also weigh less than 14,000 pounds, and it can only be claimed once every three years.
To claim the EV tax credit, you will need to file Form 8936 with your federal income tax return. You will also need to provide your vehicle's Vehicle Identification Number (VIN) to confirm its eligibility. It is important to verify that you meet all the requirements, as failing to do so may result in having to repay the IRS if your modified adjusted gross income is higher than the authorized limits.
Explore related products
Claiming the credit when you file your tax return
To claim the credit when filing your tax return, you must ensure that your vehicle is eligible for the credit. The vehicle must be a new, qualified plug-in electric vehicle (EV) or fuel cell electric vehicle (FCV). It must also be purchased through a dealer and meet specific criteria, such as having a battery capacity of at least 7 kilowatt hours and a gross vehicle weight rating of less than 14,000 pounds. Additionally, the manufacturer's suggested retail price (MSRP) must not exceed $80,000 for vans, sport utility vehicles, and pickup trucks.
When purchasing the vehicle, ensure that the dealership reports the required information to both you and the IRS. This includes your name and taxpayer identification number. The seller must also register online and report the vehicle's eligibility details to the IRS. Without this information, your vehicle will not be eligible for the credit.
To claim the credit, you will need to file Form 8936, the Qualified Plug-in Electric Drive Motor Vehicle Credit form, with your tax return for the year in which you took delivery of the vehicle. You will need to provide your vehicle's Vehicle Identification Number (VIN). The dealer should provide you with a paper copy of the time-of-sale report, which includes this information. If you did not receive this report at the time of purchase, contact the seller to obtain a copy.
It is important to note that the credit is non-refundable, meaning it can reduce your tax liability to zero, but any excess credit will not be refunded to you. Additionally, you cannot apply any excess credit to future tax years. The credit is available to individuals and their businesses, and you can use your modified adjusted gross income (AGI) from the year you took delivery of the vehicle or the previous year, whichever is less.
Explore related products
![(Old Version) H&R Block Tax Software Deluxe + State 2024 with Refund Bonus Offer (Amazon Exclusive) Win/Mac [PC/Mac Online Code]](https://m.media-amazon.com/images/I/51+fonAXhPL._AC_UY218_.jpg)
![[OLD VERSION] TurboTax Deluxe 2024 Tax Software, Federal & State Tax Return [PC/MAC Download]](https://m.media-amazon.com/images/I/71UbHaUeeUL._AC_UY218_.jpg)
Claiming the credit before 2022
If you bought a new, qualified plug-in electric vehicle (EV) in 2022 or before, you may be eligible for a clean vehicle tax credit of up to $7,500 under Internal Revenue Code Section 30D. The credit is non-refundable, meaning it can reduce your tax liability to $0, but if your credit exceeds the tax you owe, the excess won’t be refunded to you. You can't apply any excess credit to future tax years.
To claim the credit for a vehicle you took possession of in 2022, file Form 8936, Clean Vehicle Credits with your 2022 tax return. You will need to provide your vehicle's VIN. If you missed claiming a credit for an electric vehicle purchased before 2022, you may be able to claim it by filing an amended return for the tax year when you took possession of the vehicle. The credit for qualified 2-wheeled plug-in electric vehicles expired in 2022. If you bought a 2-wheeled vehicle in 2021, but placed it in service during 2022, you may still be able to claim the credit for 2022. If you bought it after 2021, you can't claim the credit.
If you entered a written binding contract to buy a vehicle after December 31, 2021, and before August 16, 2022, but took delivery on or after August 16, 2022, you may elect to claim the credit based on the prior rules. To elect the credit under the prior rules, you must elect the credit on your 2022 tax return after you take delivery of the vehicle. Depending on the date the vehicle is delivered, you can claim the credit on your original, superseding, or amended 2022 tax return.
If you purchased a vehicle between August 16, 2022, and December 31, 2022, but don't take delivery of the vehicle until 2023, see Credit for new clean vehicles purchased in 2023 and after. If you install qualified vehicle refueling and recharging property at your home, including electric vehicle charging equipment, you may be eligible for the Alternative Fuel Vehicle Refueling Property Tax Credit.
Frequently asked questions
The amount of credit you can claim depends on the vehicle type, the year you purchased the vehicle, and your income. For example, in Colorado, the credit amount ranges from $1,500 to $12,000. The federal tax credit is worth up to $7,500 for new vehicles and up to $4,000 or 30% of the sale price (whichever is lower) for used vehicles.
To qualify for the tax credit, your vehicle must meet specific criteria set by the IRS, including price caps, manufacturing guidelines, and vehicle specifications. You can check if your vehicle is eligible for the new clean vehicle credit by visiting the FuelEconomy.gov website.
To claim the tax credit, you need to file Form 8936, Clean Vehicle Credits with your tax return for the year in which you took delivery of the vehicle. You will need to provide your vehicle's VIN and other relevant information.
![H&R Block Tax Software Deluxe + State 2025 Win/Mac [PC/Mac Online Code]](https://m.media-amazon.com/images/I/611uM-FzipL._AC_UY218_.jpg)
