Beginning January 1, 2023, if you buy a qualified previously owned electric vehicle (EV) or fuel cell vehicle (FCV) from a licensed dealer for $25,000 or less, you may be eligible for a previously owned clean vehicle tax credit under Internal Revenue Code Section 25E. A full list of OEM’s and their models can be searched here.
You (an individual) may qualify for a credit for buying a previously owned, qualified plug-in electric vehicle (EV) or fuel cell vehicle (FCV), including cars and light trucks, under Internal Revenue Code Section 25E.
To qualify, you must:
In addition, your modified adjusted gross income (AGI) may not exceed:
You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your income is below the threshold for 1 of the two years, you can claim the credit.
To qualify, a vehicle must meet all of these requirements:
Find a list of qualified vehicles
The sale qualifies only if:
A dealer is a person licensed to sell motor vehicles in a state, the District of Columbia, the Commonwealth of Puerto Rico, any other territory or possession of the United States, an Indian tribal government, or any Alaska Native Corporation.
Required information includes:
Complete Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-in Electric Vehicles and New Clean Vehicles), and file it with your tax return for the year you took possession of the vehicle to claim the used clean vehicle credit. You will need to include the vehicle identification number (VIN) on the form.
MORE Information:
What information does a dealer have to provide to a taxpayer purchasing a previously-owned clean vehicle to allow the taxpayer to claim the previously-owned clean vehicle credit? (added December 29, 2022)
A1. A dealer must provide the following information on a report to the taxpayer and to the IRS:
The dealer must provide the report to the taxpayer not later than the date the vehicle is purchased.
Article Sources:
National Independent Automobile Dealers Association