Electric Vehicle Tax Credit Rules Simplified: See Which Cars Qualify

On August 16, 2022, President Joe Biden signed The Inflation Reduction Act of 2022, which makes buying an electric vehicle a little less expensive with tax credits that should save drivers $950 a year. Eligible are plug-in electric and other “clean” vehicles. Not only are there federal and state rebates, you may also find a third-party offering rebates on vehicles and chargers. Keep reading to see if you are eligible for a tax credit and other rebates this year. ⁽⁶⁾

How Much Is the EV Tax Credit and Who Qualifies?

The EV tax credit ranges from $2,500 to $7,500 for new cars (depending on battery capacity) and up to $4,000, limited to 30% of the sale price, for used EVs. Eligibility depends on the vehicle’s weight, the number of cars the manufacturer has sold and whether you own the car.

You must own the car. Leased cars don’t qualify.
The car must weigh less than 14,000 pounds.
A new clean vehicle is a clean vehicle bought on or after January 1, 2023. ⁽⁷⁾
The credit is nonrefundable, meaning iit can lower your tax bill to zero, but you won’t get a cash refund.
To claim the credit, taxpayers must file Form 8936 on their federal income taxes.
If you expect to receive a car purchased with a written binding contract after the tax-filing deadline, you'll need to submit an amended return to claim the credit once the car is delivered.
You can only claim one credit per vehicle.
Manufacturing caps will be lifted so cars like Tesla and GM, which sold more than 200,000 qualifying vehicles are now eligible.
The tax credit can only be claimed once every three years.
Taxpayers with eligible cars can claim credit from 2023 to 2032. Taxpayers can only claim one credit per vehicle.
Vans, SUVs and pickup trucks must have an MSRP of $80,000 and under. The cap does not include taxes and dealership fees.
Sedans, coups and other passenger cars are capped at $55,000. The cap does not include taxes and dealership fees.
Vehicle cannot be acquired for resale.

On Used Cars

Clean vehicles purchased and delivered from Aug. 17, 2022, to Dec. 31, 2022 must have had their final assembly in North America to be eligible. See this list for qualifying cars.
The used car must be a plug-in electric or fuel cell. ⁽⁵⁾
Only the first transfer of a vehicle qualifies for the tax credit.
Purchase price of a used car must be $25,000 or less. ⁽⁵⁾
A used car model must be at least two years old. ⁽⁵⁾

Income Eligibility Caps on EV Tax Credits

You are not eligible if your income is higher than the modified adjusted gross income levels listed below. ⁽²⁾

Tax Filing Status	Modified Adjusted Gross Income (New Car)	Modified Adjusted Gross Income (Used Car)
Single	$150,000	$75,000
Head of Household	$225,000	$112,500
Married, Filing Jointly	$300,000	$150,000
Married, Filing Separately	$150,000	$75,000

Battery Requirements for Tax Credit Eligibility

To be eligible for up to $3,750, a certain percentage of the vehicle’s battery must be assembled or manufactured within North America. The percentage thresholds are:

2023: 50%
2024: 60%
2025: 60%
2026: 70%
2027: 80%
2028: 90%
2029 through 2032: 100%

Critical Minerals Requirements for Tax Credit Eligibility

To be eligible for the remaining $3,750 portion of the tax credit, the following percentage of critical minerals in the car's battery must be extracted or processed within the U.S. or within a country with whom the U.S. has a free-trade agreement.

2023: 40%
2024: 50%
2025: 60%
2026: 70%
2027 through 2032: 80%

*Note: If the EV was purchased and delivered before April 18, 2023, the critical minerals and battery sourcing requirements do not apply. The tax credit will be calculated as $2,500 if the battery has at least a 7-kilowatt-hour capacity and up to $5,000 for additional kilowatt hours.

Information Needed To Claim Tax Credit

You must get this information from the seller:

Name and taxpayer identification number (TIN) of the seller.
Name and TIN of the taxpayer.
Date of sale and sales price.
Verification of the maximum tax credit the vehicle is eligible for.
The clean vehicle’s VIN, or vehicle identification number.
The clean vehicle’s battery capacity.
Verification that the taxpayer is the original user of the vehicle.
A statement of declaration from the seller under penalty of perjury.

You can only claim one credit per vehicle.

Federal Tax Credit By Vehicle Make/Model and Year for Vehicles Purchased in 2023+

Make/Model	Year	Vehicle Type	Credit	MSRP Limit
Audi Q5 TFSI e Quattro	2023	PHEV	$7,500	$80,000
BMW 330e	2021-2023	PHEV	$5,836	$55,000
BMW X5 xDrive45e	2021-2023	PHEV	$7,500	$80,000
Cadillac Lyriq	2022-2024	EV	$7,500	$80,000
Chevrolet Bolt	2022-2023	EV	$7,500	$55,000 (check VIN for eligibility)
Chevrolet Bolt EUV	2022-2023	EV	$7,500	$55,000
Chevrolet Silverado EV	2024	EV	$7,500	$80,000
Chrysler Pacifica	2022-2023	PHEV	$7,500	$80,000
Ford E-Transit	2022-2023	EV	$7,500	$80,000
Ford Escape Plug-In Hybrid	2022-2023	PHEV	$6,843	$80,000
Ford F-150 Lightning	2022-2023	EV	$7,500	$80,000
Ford Mustang Mach-E	2022-2023	EV	$7,500	$80,000
Genesis Electrified GV70	2023-2024	EV	$7,500	$80.000
Jeep Grand Cherokee 4xe	2022-2023	PHEV	$7,500	$80,000
Jeep Wrangler 4xe	2022-2023	PHEV	$7,500	$80,000
Lincoln Aviator Grand Touring	2022-2023	PHEV	$6,534	$80,000
Lincoln Corsair Grand Touring	2022-2023	PHEV	$6,843	$80,000
Nissan Leaf S	2021-2023	EV	$7500	$55,000
Nissan Leaf S Plus	2021-2023	EV	$7,500	$55,000
Nissan Leaf SL Plus	2021-2023	EV	$7,500	$55,000
Nissan Leaf SV	2021-2023	EV	$7,500	$55,000
Nissan Leaf SV Plus	2021-2023	EV	$7,500	$55,000
Rivian R1S	2022-2023	EV	$7,500	$80,000
Rivian R1T	2022-2023	EV	$7,500	$80,000
Tesla Model 3 Long Range	2022-2023	EV	$7,500	$55,000
Tesla Model 3 Performance	2022-2023	EV	$7,500	$55,000
Tesla Model 3 RWD	2022-2023	EV	$7,500	$55,000
Tesla Model Y All-Wheel Drive	2022-2023	EV	$7,500	$80,000
Tesla Model Y Long Range	2022-2023	EV	$7,500	$80,000
Tesla Model Y Performance	2022-2023	EV	$7,500	$80,000
Volkswagen	2023	EV	$7,500	$80,000
Volkswagen	2023	EV	$7,500	$80,000
Volkswagen	2023	EV	$7,500	$80,000
Volkswagen	2023	EV	$7,500	$80,000
Volkswagen	2023	EV	$7,500	$80,000
Volkswagen	2023	EV	$7,500	$80,000
Volvo	2022	PHEV	$5,419	$55,000
Volvo	2022	PHEV	$7,500	$55,000
Volvo	2022	PHEV	$7,500	$55,000

*Compiled from the U.S. Dept of Energy website ⁽¹⁾

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EV State Tax Credit

In addition to a federal tax credit, you may get a state tax credit, depending on where you live.

	Program	Description
Alabama	None
Alaska	None
Arizona	None
Arkansas	None
California	Clean Air Vehicle and Clean Vehicle Rebate Project	Buy or lease an EV & get $1,000-$7,500
	San Joaquin Drive Clean Rebate Program	The District is currently accepting applications for its Drive Clean! Rebate Program which provides rebates to Valley residents and businesses for the purchase or lease of new, clean-air vehicles. To be considered for a rebate, applicants must purchase or lease a vehicle from the eligible vehicle list. For more information about the program, please review the program guidelines and application. Maximum Rebate: Up to $3,000 depending on the vehicle purchased.
Colorado	Zero Emission Vehicle (ZEV) Tax Credits	See table on page 2
Connecticut	Connecticut Hydrogen and Electric Automobile Purchase Rebate Program (CHEAPR)	Incentive amounts currently range from $4,250 for an eligible new battery electric (BEV), $2,250 for a plug-in hybrid electric (PHEV), and up to $9,500 for a fuel cell electric vehicle (FCEV) when a Standard Rebate is combined with Rebate+ New for Rebate+ qualified individuals.
Delaware	Delaware Clean Vehicle Rebate	New Battery Electric Vehicles (including vehicles with gasoline range extenders): $2,500 New Plug-in Hybrid Electric Vehicles: $1,000 *Note: To be eligible for a rebate, the total vehicle price, including any destination, documentation and order fees, cannot exceed $60,000. The total vehicle price is the final purchase price including added features, equipment and extended warranties. Taxes, tags, rebates, incentives, and trade-ins are not included as part of the total vehicle price.
DC	None
Florida	None
Georgia	None
Hawaii	None
Idaho	None
Illinois	Electric Vehicle Rebate Program	A rebate application cycle is not currently open. A $4,000 rebate for the purchase of an all-electric vehicle that is not an electric motorcycle. A $1,500 rebate for the purchase of an all-electric motorcycle.
Indiana	None
Iowa	None
Kansas	Kansas' National Electric Vehicle Infrastructure (NEVI) Planning	An income tax credit is available for 40% of the incremental or conversion cost for qualified AFVs, based on gross vehicle weight rating (GVWR) as outlined in the following table: (Ranges from $2,400 to $40,000)
Kentucky	None
Louisiana	None
Maine	Efficiency Maine Electric Vehicle Rebates	Varies by income and EV See table on link
Maryland	Excise Tax Credit for Plug-in Electric Vehicles	Please be advised, funding for the one-time excise tax credit for a qualifying plug-in electric or fuel electric vehicle will be available as of July 1, 2023 (Fiscal Year 2024) You may be eligible for a one-time excise tax credit, up to $3,000, when you purchase a qualifying zero-emission plug-in electric or fuel cell electric vehicle.
Massachusetts	MOR-EV	For MOR-EV applications submitted on or after November 10, 2022, for vehicles purchased or leased prior to that date, rebates for eligible battery electric or fuel cell vehicles with a sales price of $50,000 or less will be $3,500. Eligible battery electric or fuel cell vehicles with a sales price of $55,000 or less and with a purchase or lease date on or after November 10, 2022 may qualify for the $3500 rebate.
Michigan	None
Minnesota	Electric Vehicle (EV) Toll Credit Pilot Program	The Minnesota Department of Transportation is piloting a three-year program to give a one-time MnPass account credit to eligible EV drivers for use in MnPass toll lanes. Drivers who purchase or lease a new or used plug-in hybrid electric vehicle receive a $125 credit or a $250 credit for an all-electric vehicle. Eligible vehicles must be purchased or leased between November 1, 2019, and October 31, 2022. For more information, visit the MnPass website.
Mississippi	None
Missouri	None
Montana	None
Nebraska	None
Nevada	None
New Hampshire	None
New Jersey	Charge Up New Jersey	Charge Up New Jersey promotes clean vehicle adoption in the state by offering incentives of up to $4,000 for the purchase or lease of new, eligible battery electric vehicles. The vehicle must be ordered, purchased or leased after 07/25/22, the launch of the point-of-sale program;
New Mexico	None	None
New York	Charge NY Initiative	The Charge NY initiative offers electric car buyers the Drive Clean Rebate of up to $2,000 for new car purchases or leases.
North Carolina	None
North Dakota	None
Ohio	None
Oklahoma	Alternative Fuel Vehicle (AFV) Tax Credit	For tax years beginning before December 31, 2028, a one-time income tax credit is available for up to $50,000 towards the cost of purchasing a new original equipment manufacturer AFV or converting a vehicle to operate on an alternative fuel. Tax credit amounts vary depending in the gross vehicle weight rating (GVWR) of the vehicle: (click link to see table) The state also provides a tax credit of 10% of the total vehicle cost, up to $1,500, if the incremental cost of a new AFV cannot be determined or when an AFV is resold, as long as a tax credit has not been previously taken on the vehicle. Equipment used for conversions must be new, not previously used to modify or retrofit any vehicle, meet applicable federal and state safety standards, and must be installed by a state certified alternative fuels equipment technician. Eligible alternative fuels include natural gas, propane, and hydrogen. Tax credits may be carried forward for up to five years.
Oregon	Clean Vehicle Rebate Program	Rebate amount: $750 for zero emission motorcycles $1,500 for battery under 10 kWh $2,500 for battery of 10 kWh or more
Pennsylvania	Alternative Fuel Vehicle (AFV) Rebate	$2,000 rebate for a Battery Electric Vehicle (BEV). $1,500 rebate for a Plug-In Hybrid Electric Vehicle (PHEV). Extra $1,000 rebate may be available based on household size and income
Rhode Island	Driving Rhode Island to Vehicle Electrification (DRIVE EV) rebate	rebates of up to $2,500.00 for the purchase or lease of new battery electric vehicles and fuel-cell electric vehicles and up to $1,500.00 for new plug-in hybrid electric vehicles. The program also offers rebates of up to $1,500.00 for the purchase or lease of used battery electric vehicles and fuel-cell electric vehicles and up to $750.00 for used plug-in hybrid electric vehicles.
South Carolina	None
South Dakota	None
Tennessee	None
Texas	Texas Emissions Reduction Program (TERP)	CURRENT CLOSED AND NOT ACCEPTING AN APPLICATIONS The State of Texas offers a $2,500 rebate for buying an electric car, 2,000 applications accepted per year.
Utah
Vermont	Drive Electric Vermont	$1,500 to $4,000 for eligible purchases of new EVs, up to $5,000 for used high-efficiency vehicles. Additional $3,000 available with the Replace Your Ride program.
Virginia	Electric Vehicle Rebate Program	NEW Beginning January 1, 2022, a resident of the Commonwealth who purchases a new electric motor vehicle from a participating dealer shall be eligible for a rebate of $2,500. A qualified resident of the Commonwealth who purchases such vehicle shall also be eligible for an additional $2,000 enhanced rebate. USED Beginning January 1, 2022, a resident of the Commonwealth who purchases a used electric motor vehicle from a participating dealer with a sale price as provided by § 58.1-2401 of not more than $25,000 shall be eligible for a rebate of $2,500. A qualified resident of the Commonwealth who purchases such vehicle shall also be eligible for an additional $2,000 enhanced rebate.
Washington	Alternative Fuel Vehicle (AFV) Retail Sales and Use Tax Exemption	The sale or lease of new or used passenger vehicles, light-duty trucks, and medium-duty passenger AFVs is exempt from the state retail sales and use tax. To be eligible, new vehicles may not be valued above $45,000 and used vehicles may not be valued above $30,000.
West Virginia	None
Wisconsin	None
Wyoming	None

*State Level Rebates. ⁽³⁾

There is also no longer a phase-out for manufacturers that have sold over 200,000 vehicles in the United States.

Rebates from Private Companies and Other Third Parties

In states that don’t offer a tax rebate, private companies and other third parties may offer a rebate for EV purchases and rebates for chargers. See what rebates there are in your state by doing a quick Google Search for EV Rebates in (fill in the blank with your state). Go deeper into your search than government-issues rebates.

In California, alone, there are many local rebate offers, too many to list here. Check out a few examples of rebates in other states below:

Electric Vehicle (EV) Rebate – Alaska Power and Telephone (AP&T)

AP&T offers a rebate of $1,000 to residential customers who own a new or pre-owned EV, including electric motorcycles, with a minimum battery size of at least 16 kilowatts.

Electric Vehicle (EV) Rebate - Nevada Energy (NV Energy)

NV Energy offers low-income customers a $2,500 rebate for the purchase of a new or used EV. Eligible low-income customers are households with income levels equal to or below 200% of the federal poverty line. Rebates are awarded on a first-come, first-served basis. For more information, see the NV Energy Electric Vehicles website.

Electric Vehicle (EV) Rebates - New Hampshire Electric Co-op (NHEC)

NHEC offers residential customers a rebate of $1,000 for the purchase or lease of a new or used electric vehicle, $600 for the purchase or lease of a new or pre-owned plug-in hybrid electric vehicle, and $300 for the purchase or lease of a new or pre-owned electric motorcycle. EVs must be purchased or leased between January 1, 2022, and December 31, 2022.

EV Tax Credit FAQs

How do I get a tax credit for my EV?

If your car qualifies for a tax credit, Consumers, you can claim the electric vehicle tax credit on your tax filing. Starting in 2024, there will be a mechanism that will allow car buyers to transfer the credit to dealers at the point of sale so that it can directly reduce the purchase price.

What is the IRS criteria for filing a credit on tax day?

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 up to $7,500 under Internal Revenue Code Section 30D.

What if I purchased a qualifying electric vehicle after August 16, 2022 but before the end of 2022?

There is a North America manufacturer requirement but the eligibility criteria remains the same as prior to the Inflation Reduction Act. There is also no longer a phase-out for manufacturers that have sold over 200,000 vehicles in the United States.

Not only can you get an amazing rebate, you can also spend less on car insurance. If you haven’t shopped around to see what rates are available to you in the past six months, you’re probably paying hundreds more than you need to each year. Get free car insurance quotes by entering your zip code on this page and answering a few easy questions.

Sources

Internal Revenue Service. Credits for New Electric Vehicles Purchased in 2022 or Before..
Internal Revenue Service. Topic B — Frequently Asked Questions About Income and Price Limitations for the New Clean Vehicle Credit.
Clean Energy Sage. Electric car tax credits & incentives.
Internal Revenue Service. Topic C — Frequently Asked Questions About When The New Requirements Apply To The New Clean Vehicle Credit.
Internal Revenue Service. Used Clean Vehicle Credit.
U.S. Department of the Treasury. Frequently Asked Questions on the Inflation Reduction Act’s Initial Changes to the Electric Vehicle Tax Credit.
Internal Revenue Service. Topic C — Frequently Asked Questions About When The New Requirements Apply To The New Clean Vehicle Credit.

2023 Electric Vehicle Tax Credit Rules Simplified: See Which Cars Qualify

Fran Majidi

On This Page

How Much Is the EV Tax Credit and Who Qualifies?

On Used Cars

Income Eligibility Caps on EV Tax Credits

Battery Requirements for Tax Credit Eligibility

Critical Minerals Requirements for Tax Credit Eligibility

Information Needed To Claim Tax Credit

Federal Tax Credit By Vehicle Make/Model and Year for Vehicles Purchased in 2023+

EV State Tax Credit

Rebates from Private Companies and Other Third Parties

Electric Vehicle (EV) Rebate – Alaska Power and Telephone (AP&T)

Electric Vehicle (EV) Rebate - Nevada Energy (NV Energy)

Electric Vehicle (EV) Rebates - New Hampshire Electric Co-op (NHEC)

EV Tax Credit FAQs

How do I get a tax credit for my EV?

What is the IRS criteria for filing a credit on tax day?

What if I purchased a qualifying electric vehicle after August 16, 2022 but before the end of 2022?

Sources

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