Claiming Electric Vehicle Tax Credits: Turbotax Guide

Electric vehicle owners can take advantage of tax credits to lower the cost of EV ownership. The federal EV tax credit, worth up to $7,500, is a non-refundable tax credit that has been expanded and updated with new rules. To claim the credit, electric vehicle owners can use Form 8936 to determine their tax credit value. This form is used for qualifying plug-in electric drive motor vehicles, including two-wheeled plug-in electric vehicles. The amount of the credit depends on the vehicle's usage and the owner's tax liability. TurboTax offers guidance on filling out the correct forms to claim the credit.

Explore related products

Electric Cars - The Complete Guide: 65 Top Vehicles On The Market, Expert Reviews, Newest Tech, Maximizing Range, Tax Credits, Home Charging & Hybrids

$5.05 $13.99

Effects of Federal Tax Credits for the Purchase of Electric Vehicles

$14.95

Convert It!: A simple step-by-step guide for converting any classic car into an electric vehicle.

$12.95 $12.95

The Electric Vehicle Conversion Handbook: How to Convert Cars, Trucks, Motorcycles, and Bicycles -- Includes EV Components, Kits, and Project Vehicles

$28.17 $35

Electric Vehicle Logbook: Mileage and Charging Records for Electric Vehicle | Electric Car Mileage and Charging Record Book | EV Performance Logbook |

$6.99

Electric Vehicle Logbook: Electric Vehicle Mileage and Charging Record Book | EV Logbook | Track EV Mileage, Battery, and Performance |

$7.99

Claiming the Clean Vehicle Credit

First, you need to determine whether your vehicle qualifies for the Clean Vehicle Credit. The qualification criteria depend on factors such as the vehicle's type, purchase date, and whether it is for business or personal use. The vehicle must also meet certain requirements, such as having a gross vehicle weight under 14,000 pounds and being designed to be driven on public roads.

If you are purchasing a new vehicle, your dealer should certify whether it is eligible for the tax credit. In most cases, this dealer certification is sufficient to qualify for the credit, and you won't need additional documents from the manufacturer. However, it is always good to check the FuelEconomy.gov Tax Center to determine eligibility and read through the frequently asked questions. You can also use the tax credit calculator to determine the amount you can claim.

Additionally, the Clean Vehicle Credit has different rules and qualifications for vehicles purchased before and after January 1, 2023. For instance, if you purchased your vehicle before 2023, you can claim the Qualified Plug-In Electric Drive Motor Vehicle Credit, while for vehicles purchased after 2022, you can claim the Clean Vehicle Credit.

When filing your taxes, you will need to complete Form 8936, Clean Vehicle Credits, with the Vehicle Identification Number (VIN) for your electric vehicle. This form is used to claim either the Qualified Plug-In Electric Drive Motor Vehicle Credit or the Clean Vehicle Credit. It is also used to determine your tax credit value for certain qualified two or three-wheeled plug-in electric vehicles.

Furthermore, when you take possession of the vehicle, the seller must provide you with a time-of-sale report and a copy of the confirmation from the IRS. This report will include proof of your purchase's eligibility for the credit, the credit amount for the specific VIN, and whether the credit was transferred to the dealer. The seller is also required to report specific information about the vehicle to both the buyer and the IRS.

It is important to note that the Clean Vehicle Credit has been expanded and updated with new rules, including income limits and vehicle requirements. Therefore, it is recommended to review all the available information related to your location to maximize your deductions and ensure you don't miss out on any additional incentives or price incentives.

Explore related products

Electric and Hybrid Vehicles

$71.43

Electric Vehicles: And the End of ICE age

$11.99

Electric Powertrain: Energy Systems, Power Electronics and Drives for Hybrid, Electric and Fuel Cell Vehicles

$72.85 $141.95

Hybrid & Electric Vehicles: A Beginner's Guide

$2.99 $14.99

Electric Vehicles and the Wind Industry: Effects of Federal Tax Credits (Energy Scienc, Engineering and Technology)

$24.14 $95

ELECTRIC VEHICLE MILEAGE AND MAINTENANCE LOG BOOK FOR WOMEN: WITH 90 PAGES FOR THE WHOLE YEAR, COMPLETE CAR DETAILS IN ONE PLACE

$5.99

Using Form 8936

Form 8936 is used to claim a tax credit for a qualifying plug-in electric drive motor vehicle. This includes two-wheeled plug-in electric vehicles. The tax credit can be as high as \$7,500, depending on how the vehicle is being used, the amount of your tax liability, and whether you are driving the vehicle for personal or business use.

The form can be used to claim either the Qualified Plug-In Electric Drive Motor Vehicle Credit or the Clean Vehicle Credit. The Clean Vehicle Credit replaced the Qualified Plug-In Electric Drive Motor Vehicle Credit for qualifying vehicles purchased after December 31, 2022. The Clean Vehicle Credit applies to vehicles purchased after December 31, 2009, through December 31, 2022, or January 1, 2023, through December 31, 2032.

To be eligible for the Clean Vehicle Credit, the vehicle must be a new vehicle with at least four wheels placed in service after 2022. It must be propelled to a significant extent by an electric motor that draws electricity from a battery with a capacity of no less than 7 kilowatt hours. The battery must be capable of being recharged from an external source of electricity and the vehicle must be manufactured primarily for use on public streets, roads, or highways.

For a previously owned clean vehicle, the credit is equal to the lesser of \$4,000 or 30% of the sales price. To qualify as a previously owned clean vehicle, the vehicle must have at least four wheels, a model year that is at least two years earlier than the calendar year in which you acquired the vehicle, and its original use must have begun with someone other than the purchaser. The vehicle must have been purchased from a dealer and must be the first transfer since August 16, 2022, to an individual eligible for the credit. Like a new clean vehicle, it must be propelled to a significant extent by an electric motor that draws electricity from a battery with a capacity of no less than 7 kilowatt hours, and the battery must be capable of being recharged from an external source of electricity.

Explore related products

Battery Management Algorithm for Electric Vehicles

$174 $199.99

THE EV FUTURE: Business Planning, Government Grants, & Tax Credits

$9.75

Electric Vehicle Engineering

$59.99 $67.5

Repair Your Credit Like the Pros: How credit attorneys and certified consultants legally delete bad credit and restore your good name

$14.99 $14.99

BELOW THE LINE: TESLA’S RACE TO AFFORDABLE ELECTRIC CARS : How the Model 3 and Model Y Redefined Value in the Post-Incentive Era

$5.99 $12.99

Lila & Eve

$3.99

Electric vehicle tax credit eligibility

Electric vehicle tax credits are available for eligible new and used electric vehicles. The eligibility criteria for the electric vehicle tax credit are as follows:

• The vehicle must be purchased new.
• The vehicle must have a gross vehicle weight under 14,000 pounds.
• The vehicle must be designed to be driven on public roads.
• The vehicle must be a plug-in electric or fuel cell with at least 7 kilowatt-hours of battery capacity.
• The vehicle must meet certain critical mineral and battery component requirements. For example, a certain percentage of the vehicle's battery must be assembled or manufactured within North America.
• The vehicle's manufacturer suggested retail price (MSRP) cannot exceed certain limits, which vary depending on the type of vehicle. For example, the MSRP for vans, sport utility vehicles, and pickup trucks cannot exceed $80,000.
• The vehicle must be purchased from a qualifying dealer or manufacturer.
• The buyer's modified adjusted gross income (MAGI) must fall within the eligibility threshold.
• The vehicle will be primarily for personal use.
• The buyer must file a tax return for the tax year in which they bought the car and provide the vehicle's identification number and the date of the transfer election to the IRS.
• The buyer must complete Form 8936, Clean Vehicle Credits, with their tax return and provide the vehicle's VIN.

It is important to note that the specific eligibility criteria may vary depending on the state and local incentives offered by the government, utility, or other programs. Additionally, the dealer or leasing agency may qualify for a commercial vehicle tax credit, which can indirectly benefit individual consumers if the dealer passes down the savings by lowering leasing costs.

Explore related products

All Hallows' Eve

$1.99

New Year's Eve

$3.79

All Hallows' Eve 2

$3.59

All About Eve

$3.99

Where The Bears Are New Year's Eve Special

$1.99

The Three Faces Of Eve

$3.99

State and local incentives

State and local governments, as well as utility companies, offer a variety of incentives for electric vehicle owners. These incentives can help drive down the cost of clean vehicle ownership and promote environmentally friendly choices.

Some states and local utilities offer rebates or tax credits for customers who purchase electric vehicles. For example, Alabama Power offers discounted TOU rates for residential customers with electric vehicles. Additionally, some states offer non-cash incentives, such as carpool lane access and free municipal parking. Communities and utility companies may also offer cash-back incentives, discounted rate plans, and other credits. For instance, Entergy provides a $250 cash incentive for installing a residential Level 2 EV charger, and Tucson Electric Power offers three pricing plans for electric vehicle charging, allowing customers to reduce their energy bills by charging during off-peak hours.

It is important to note that these incentives vary by location, and it is recommended to review the sponsoring entity's website for up-to-date information on eligibility and program details.

Explore related products

A Long Way Down

$3.79

The Lady Eve

$3.99

Opening Night

$3.99

Perfume

$3.99

From Here To Eternity

$3.99

5 to 7

$3.59

How to fill out the correct forms

To enter your electric vehicle tax credit on TurboTax, you will need to fill out Form 8936, the official IRS form used to claim the Qualified Plug-In Electric Drive Motor Vehicle Credit or the Clean Vehicle Credit. The Clean Vehicle Credit replaced the Qualified Plug-In Electric Drive Motor Vehicle Credit for qualifying vehicles purchased after December 31, 2022.

Form 8936 is used to determine your tax credit value for certain qualified two or three-wheeled plug-in electric vehicles. You will need to complete the form with the Vehicle Identification Number (VIN) for your electric vehicle. The amount you can claim depends on how the vehicle is being used (personal or business), the amount of your tax liability, and whether the vehicle was purchased new or used.

If you purchased your electric vehicle before January 1, 2023, you may be able to claim the Qualified Plug-In Electric Drive Motor Vehicle Credit. This credit is worth up to \$7,500 for new electric vehicles. If you purchased your vehicle after this date, you may be able to claim the Clean Vehicle Credit, which is also worth up to \$7,500 for new electric vehicles and up to \$4,000 or 30% of the purchase price for used electric vehicles.

In most cases, dealer certification is sufficient to qualify for the tax credit, and no additional documents from the manufacturer are required. However, it is important to review all available information related to your location, as you may be able to claim additional incentives through local programs, discounts, and tax incentives.

Frequently asked questions