Clean Vehicle Tax Credit

Did you know that if you place a new plug-in electric vehicle (EV) or fuel cell vehicle (FCV) in service in 2023 or after, you may qualify for a clean vehicle tax credit?

WHO QUALIFIES?

You may qualify for a credit up to $7,500 under Internal Revenue Code Section 30D if

you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV). The Inflation

Reduction Act of 2022 changed the rules for this credit for vehicles purchased from

2023 to 2032.

The credit is available to individuals and their businesses.

To qualify, you must:

• Buy it for your own use, not for resale

• Use it primarily in the U.S.

In addition, your modified adjusted gross income (AGI) may not exceed:

• $300,000 for married couples filing jointly or a surviving spouse

• $225,000 for heads of households

• $150,000 for all other filers
  

You can use your modified AGI from the year you take delivery of the vehicle or the

year before, whichever is less. If your modified AGI is below the threshold in 1 of the 2

years, you can claim the credit.

If you do not transfer the credit, it is nonrefundable when you file your taxes, so you

can't get back more on the credit than you owe in taxes. You can't apply any excess

credit to future tax years.

CREDIT AMOUNT

The amount of the credit depends on when you placed the vehicle in-service (took

delivery), regardless of purchase date.

For vehicles placed in-service January 1 to April 17, 2023:

• $2,500 base amount

• Plus $417 for a vehicle with at least 7 kilowatt hours of battery capacity

• Plus $417 for each kilowatt hour of battery capacity beyond 5 kilowatt hours

• Up to $7,500 total

In general, the minimum credit will be $3,751 ($2,500 + 3 times $417), the credit amount

for a vehicle with the minimum 7 kilowatt hours of battery capacity.

For vehicles placed in-service April 18, 2023 and after:

Vehicles will have to meet all of the same criteria listed above, plus meet new critical

mineral and battery component requirements for a credit up to:

• $3,750 if the vehicle meets the critical minerals requirement only

• $3,750 if the vehicle meets the battery components requirement only

• $7,500 if the vehicle meets both

A vehicle that doesn't meet either requirement will not be eligible for a credit.

You can visit https://fueleconomy.gov/feg/tax2023.shtml#requirements for

more information or to look up the car you purchase to see if you can receive

credit.