What EVs qualify for the federal $7,500 tax credit?

The future is looking electric, and vehicles are at the forefront of the revolution. Indeed, 2024 is the year for a whole fleet of new EV models. And while we love electric cars for their smooth rides, fast acceleration, and energy efficiency, the real winner is the environment. EVs have the potential to reduce global carbon emissions, and to aid in the transition, the US government offers incentives with substantial tax breaks. Called the Clean Vehicle Credit, it’s as high as $7,500.

You may also be able to apply the credit to the final cost of your vehicle through the dealership. It’s like a discount subsidized by the government, and it circumnavigates the tax return snafu. But not every EV is eligible.

Determining if your EV qualifies is tricky. For one, there are several types of EVs: all-electric, plug-in hybrids, and fuel-cell models. Each type has its own qualifications and credit amounts. To complicate matters further, your eligibility depends on the year the vehicle was purchased, among other prerequisites.

The eligible EVs are broken down into three types:

• New EVs purchased in 2023 or after
• New EVs purchased before 2023
• Pre-owned EVs purchased in 2023 or after

To help folks navigate the bureaucratic jargon, I’ve simplified the details to help you find out if your EV qualifies for the credit. Whether you’re purchasing a new EV or trying to get the Clean Vehicle Credit on one you already bought, this guide should help. I’ve also compiled a complete list of eligible vehicle models for the first type — new EVs purchased in 2023 or after.

The prerequisites for the Clean Vehicle Credit

There are a few obstacles to overcome for an EV to be eligible.

Purchased your EV from a dealership, not a private seller.

According to the IRS, “at the time of sale, a seller must give you information about your vehicle’s qualifications. Sellers must also register online… If they don’t, your vehicle won’t be eligible.”

If you’re looking to buy, make sure to inquire at the dealership about the Clean Vehicle Credit. They’ll most likely provide you with all the information you need and help you through the process of applying.

Final assembly of your EV must have occurred in North America.

Otherwise, your EV isn’t eligible for the Clean Vehicle Credit. According to the US Department of Energy (DOE), “to be eligible… a vehicle must have undergone final assembly in North America. In general, North America includes the United States and Puerto Rico, Canada, and Mexico.”

If you don’t know where your EV was assembled, don’t worry. The DOE has a Vehicle Identification Number (VIN) lookup tool to find out where your vehicle was last assembled.

The VIN is the code stamped on your car’s dashboard, and it’s 17 characters long. Enter your VIN code into the lookup tool that we linked to above, and it will tell you where your car was assembled.

Only pre-owned EVs purchased in or after 2023 and brand-new EVs are eligible

This is important for those looking to buy a pre-owned EV, since the law recently changed to exclude pre-owned EVs purchased before 2023.

Your adjusted gross income can’t be greater than a certain amount

1. New EVs purchased in or after 2023: According to the US Department of Energy, “Your modified adjusted gross income (AGI) may not exceed $300,000 for married couples filing jointly, $225,000 for heads of households, [and] $150,000 for all other filers.”
2. Pre-owned EVs purchased in or after 2023: For tax credits to apply, according to the US DOE, “Your modified adjusted gross income (AGI) may not exceed $150,000 for married filing jointly, $112,500 for heads of households, [and] $75,000 for all other filers.”
3. New EVs purchased before 2023: For tax credits for vehicles purchased prior to 2023, the DOE doesn’t list any income limits.

Bought a new EV in 2023 or later? Check this list to see if you qualify.

If you purchased an EV in 2023 or after, you may be eligible for the Clean Vehicle Credit. This list contains the vehicle models that meet the above prerequisites as well as their maximum credit amounts. However, a spot on this list isn’t a guarantee. The dealership is responsible for confirming the eligibility and providing a time-of-sale report.

New EVs placed into service in the year 2024

Source: US Department of Energy (current as of March 14, 2024).

New EVs placed into service between January 1st, 2023 and April 17, 2023

Source: US Department of Energy (current as of March 14, 2024)

New EVs placed into service between April 18th, 2023 and December 31st, 2023

Source: US Department of Energy (current as of March 14, 2024)

If my EV qualifies for a tax credit, how do I apply for it?

If your EV qualifies, applying for the credit is as easy as completing and attaching Form 8936 (Qualified Plug-In Electric Drive Motor Vehicle Credit) to your yearly tax returns. You can download the form and its instructions from the IRS’s website here. If you use a tax attorney or tax filing service, make sure to request this form when submitting your documents.

You may also be able to apply the credit directly to the purchase through the dealership. This basically works as a credit transfer in which the dealership assumes the credit. To go this route, you’ll have to coordinate the transfer with the dealership. In either case, Form 8936 is still required.

Source: Ford

Bought a new EV before 2023? You still might qualify.

If you purchased a new EV from a dealership before 2023 and never applied for the Clean Vehicle Credit, you might still have a chance. This category is divided into two time periods:

EVs purchased between August 17th, 2022 and December 31st, 2022

• For EVs purchased in this period, the DOE provides a complete list of candidates here.
• If your EV appears on the list, you should reach out to the dealership where you bought it for further information.
• Not every EV on the list is necessarily eligible, since other factors like the date you put it into service and the final assembly location come into play.

EVs purchased before August 17th, 2022

• EVs purchased before this date do not have the same requirements as those above, since the new rules took effect on August 17th, 2022.
• The details for EVs purchased in this time period can be found on the DOE website here.