New and Used Clean Vehicle Tax Credits (2024)

The Inflation Reduction Act(IRA) provides new opportunities forconsumers to save money on clean vehicles, offering multiple incentives for the purchase or lease of electric vehicles (EVs), plug-in hybrid vehicles, fuel cell vehicles, and associated equipment such as chargers.These vehicles are more efficient than gas-powered vehicles, so you can save hundreds of dollars per year on fuel and significantly reduce pollution.

If you’ve been saving up to purchase a clean vehicle of your own, here’s what you should know.

Download thenew clean vehicle tax credit checklistorused clean vehicle tax credit checklist.

Summary of Tax Credits for New and Used Clean Vehicles and Charging Equipment

Three new tax credits are available to individual purchasers of clean vehicles. To find out if your purchase will qualify, you’ll first need to decide whether you’re interested in a new or used vehicle. You’ll also need to know the vehicle model. Next, you can determine which of these credits applies to you:

• Up to $4,000 for buyers of qualified, previously owned clean vehicles. For this credit, see this list of qualified vehicles.

• Up to $7,500 for buyers of qualified, new clean vehicles. For this credit, there are two lists of qualified vehicles: those purchased in 2023 or later, and those purchased in 2022 or earlier.

If you checked ALL of the above, you may qualify for a full credit of $7,500 or a partial credit of $3,750, based on the vehicle’s battery components and critical minerals. Click here for more details andcheck a vehicle's eligibility here.

• Up to $1,000 toward the cost of a home EV charger. Find out if your home is in an eligible location.

In figuring out your eligibility for a clean vehicle tax credit, there are three more factors to consider: the timing of your vehicle acquisition, your personal or household income level, and whether the vehicle itself is eligible.

How People Qualify for the Clean Vehicle Tax Credit

Income Restrictions

• For new clean vehicle purchases in 2023 and beyond, your modified adjusted gross income(MAGI, see here for details) for either the current year or prior year must be:
  • $300,000 or less, if you file taxes jointly with your spouse or are a surviving spouse
  • $225,000 or less, if you file taxes as the head of a household
  • $150,000 or less, for other filers
    
• For used clean vehicle purchases, your modified adjusted gross income for either the current year or prior year must be:
  • $150,000 or less, if you file taxes jointly with your spouse or are a surviving spouse
  • $112,500 or less, if you file taxes as the head of a household
  • $75,000 or less, for other filers

Timing Restrictions

• If you bought a new, qualified clean vehicle in 2022 or before, you may still be eligible for a clean vehicle tax credit—but some restrictions apply. For a full summary of those restrictions, review this IRS guide. If you are buying a new clean vehicle January 1, 2023, or later, review this IRS guide. For both new and used clean vehicles, you must purchase before December 31, 2032, at which point the IRA's clean-vehicle tax credits will expire.

How Vehicles Qualify for the Clean Vehicle Tax Credits

It's important to keep in mind that not all clean vehicles are eligible for IRA tax credits. IRA contains various criteria that vehicles must meet to qualify for the clean vehicle tax credit, including where the vehicle was assembled; the size of the vehicle battery; the location of the extraction, processing, recycling, manufacturing, and assembly of the battery's minerals and/or component parts; the manufacturer suggested retail price or MSRP; and other requirements. See the links below for more information about vehicle models from qualified manufacturers:

• Manufacturers and Models for New Qualified Clean Vehicles Purchased in 2023 or After
• Manufacturers and Models of Qualified Used Clean Vehicles

Visit the FuelEconomy.gov Tax Center to determine whether a vehicle qualifies for a tax credit, navigate eligibility requirements, and read frequently asked questions. You can also use the tax credit calculator to determine how much you can claim on a used vehicle.

Download and print out our buyer eligibility checklistor click on the file above and bring it with you to the dealership.

The IRS maintains and updates a list of new vehicles that qualify for tax credits of up to $7,500. As new rules take effect and manufacturers adapt to changing conditions in the clean vehicle market, it is likely that the list of eligible vehicles will change. So, as you make plans to purchase a clean vehicle, please remember to check theFuelEconomy.gov Tax Center regularly.

How to Claim the New Clean Vehicle Tax Credit

Starting on Jan. 1, 2024, eligible consumers will have the option to transfer the value of the tax credit to dealers that meet certain requirements in exchange for an equivalent reduction in the vehicle’s purchase price. That would mean an immediate reduction off the price of the vehicle at the point of sale rather than waiting for a tax credit after filing taxes.

Dealers will be responsible for submitting the tax credit information to the IRS to determine vehicle eligibility and credit amount. Dealers must also provide buyers a copy of the IRS's approval of the dealer's submission.

For up-to-date information for dealers and consumers on point-of-sale credits, refer to information on the IRS Clean Vehicle Tax Credit.

To find additional up-to-date information about eligibility, the IRS maintains a list. Happy shopping!

Disclaimer: The information on this page should not be viewed as an official or legally binding document. Other requirements or exceptions may apply. For more detailed information, please consult an IRS tax representative and/or official IRS publications.