What is “clean vehicle tax credit” or 30 D?
The EV tax credit, aka “clean vehicle tax credit” or 30D, offers up to $7,500 off a new electric car. Sweet Green deal, right?
Great, Can I head over to the EV dealership and take advantage of EV credits?
If you thought that heading to a dealership, picking your desired EV, and getting your credit was a straightforward process, you were mistaken. It’s not a simple feat, especially since we’re talking about the IRS.
How can i get my EV credits?
To claim your $7,500 credit from the government, you must meet several requirements. These requirements include the origin of the vehicle, battery, and minerals, the vehicle’s cost, your annual income, and many other factors that must be satisfied.
Lets’ understand it.
To begin with, it’s essential to comprehend that the EV tax credit in the US is not just an incentive to encourage Americans to replace their polluting gasoline-fueled cars with noiseless, zero-emission EVs. It’s also an energy security measure designed to combat China’s dominance in the EV battery industry. Automakers are striving to establish manufacturing operations in North America to comply with regulations while consumers opt for eligible EVs during car purchases.
Revised Federal EV Tax Credit 2023 Updates:
| Key Points | Details |
|---|---|
| Tax credit amount | $7,500 |
| Timeline | Extended from January 2023 to December 2032 |
| Tax credit cap | Eliminated for automakers after they hit 200,000 EVs sold |
| Implementation | Language in the bill suggests tax credit could be implemented at the point of sale |
| Battery requirements | EV must be assembled in North America and meet certain battery requirements |
| Split tax credit | Full $7,500 credit is split into two parts based on battery requirements |
| Battery mineral requirements | $3,750 credit for critical minerals (increases to 80% in 2027) |
| Battery component requirements | $3,750 credit for battery components (increases to 100% in 2029) |
| Exclusions | Beginning in 2025, vehicles with battery minerals or components from a foreign entity of concern are excluded from the tax credit |
| New tax credit | $4,000 for used EVs priced below $25k |
| Eligibility for tax credit | Applies to battery electric vehicles with an MSRP below $55,000 and zero-emission vans, SUVs, and trucks with MSRPs up to $80,000 |
| Commercial fleet customers | New credit also expands to commercial fleet customers |
| Income requirements | Available to individuals reporting adjusted gross incomes of $150,000 or less, $225,000 for heads of households, or $300,000 for joint filers |
| PHEVs | The new credit will continue to apply to Plug-in Hybrid EVs (PHEVs) as long as they meet the same requirements outlined above. |
What are the eligibility criteria for federal tax credits as an EV buyer?
Determining your eligibility for federal tax credits as an EV buyer is not a straightforward yes or no answer. While it is a simple question, the amount you can qualify for varies depending on several factors related to your household.
New Clean Vehicle Credit Qualification:
Key Points |
Eligibility Criteria For Federal Tax Credits As An EV Buyer |
|---|---|
| Customer Type | Individual who bought the vehicle for use and not for resale |
| Original Owner | Not the original owner |
| Dependent | Not claimed as a dependent on another person’s tax return |
| Previous Credit Claim | Not claimed another used clean vehicle credit in the three years before the EV purchase date |
| Modified Adjusted Gross Income | Must not exceed $75k for individuals, $112,500 for heads of households, and $150k for joint returns |
Used Clean Vehicle Credit Rules:
The updated policy for pre-owned electric vehicles now provides customers with a credit equivalent to 30% of the purchase price, up to a maximum of $4,000. This alteration should enable individuals such as yourself to receive some extra cash at the close of the financial year, provided you adhere to the regulations specified by the IRS.
Key Points |
Criteria for Used EV to Qualify for Federal Tax Credits |
|---|---|
| Sale Price | $25,000 or less |
| Model Year | At least two years earlier than the calendar year when you buy it |
| Transfer Date | Not already been transferred after August 16, 2022, to a qualified buyer |
| Gross Vehicle Weight Rating | Less than 14,000 pounds |
| Battery Capacity | Eligible FCV or plug-in EV with a battery capacity of at least 7 kilowatt hours (kWh) |
| Use of Vehicle | For use primarily in the United States |
| Purchasing Channel | You buy the vehicle from a dealer |
| Reporting Information | Dealer reports required information to you at the time of sale and to the IRS |
| Purchaser | Must be an individual (no businesses) to qualify for used credit |
| Credit Usage | A used vehicle qualifies for tax credit only once in its lifetime |
All EVs eligible for 2023 tax credits
According to the aforementioned conditions, the following electric vehicles (EVs) may be eligible for some form of federal EV tax credit. It should be noted that as of April 18, 2023, the US Treasury has removed several models that previously qualified, indicated by a strike-through.
| Brand | Model & MSRP | Tax Credit Amount |
| CADILLAC (GM) | Lyriq (2022-2023)- $80,000 | Up to $7,500 |
| CHEVROLET (GM) | Blazer EV (2024)- $55,000 | Up to $7,500 |
| Bolt EUV (2022-2023) – $55,000 | Up to $7,500 | |
| Bolt EV (2022-2023) – $55,000 | Up to $7,500 | |
| Equinox EV (2024) – $55,000 | Up to $7,500 | |
| Silverado EV (2024) – $80,000 | Up to $7,500 | |
| FORD | F-150 Lightning (2022-2023)- $80,000 | Up to $7,500 |
| Mustang Mach-E (2022-2023)- $80,000 | Up to $3,750 | |
| E-Transit (2022-2023)- $80,000 | Up to $3,750 | |
| GENESIS | GV70 Electrified (2024)- $80,000 | $7,500 |
| NISSAN | LEAF SV, S Plus, SL Plus (2021-2022)- $55,000 | $7,500 |
| LEAF S / SV Plus (2021-2023)- $55,000 | $7,500 | |
| RIVIAN | R1T (2023)- $80,000 | Up to $3,750 |
| R1S (2023)- $80,000 | Up to $3,750 | |
| TESLA | Model 3 Standard Range RWD (2022-2023)- $55,000 | Up to $3,750 |
| Model 3 Long Range/Performance (2022-2023)- $55,000 | Up to $7,500 | |
| Model Y AWD/Long Range/Performance (2022- 2023)- $80,000 | Up to $7,500 | |
| VOLKSWAGEN | ID.4 / ID.4 S (2023)- $80,000 | $7,500 |
| ID.4 Pro/Pro S/Pro S Plus (2023)- $80,000 | $7,500 | |
| ID.4 AWD Pro/AWD Pro S/AWD Pro S Plus (2023)- $80,000 | $7,500 |