Preowned Vehicle Tax Credit

Thinking of buying a used car but need a little incentive. The IRS is providing just that if you are interested in an Electric Vehicle (EV). If you buy a used electric car from a dealer for $25,000 or less, you may be eligible for a used clean vehicle tax credit. The credit the IRS is offering is 30% of the sale price with a maximum credit of $4,000.

In order for you to qualify you have to pass all of the following conditions:

·       Be an individual who bought the vehicle for use and not for resale

·       Not be the original owner

·       Not be claimed as a dependent on another person’s tax return

·       Not have claimed another used clean vehicle credit in the 3 years before the purchase date

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

o   $150,000 for married filing jointly or a surviving spouse

o   $112,500 for heads of households

o   $75,000 for all other filers

For the vehicle to qualify it must pass all of the following conditions:

·       Have a sale price of $25,000 or less

·       Have a model year at least 2 years earlier than the calendar year when you buy it.

·       Not have already been transferred after August 16, 2022, to a qualified buyer.

·       Have a gross vehicle weight rating of less than 14,000 pounds

·       Be an eligible FCV or plug-in EV with a battery capacity of least 7 kilowatt hours

·       Be for use primarily in the United States

The IRS recommends that when you purchase a used electric car from a dealer that you get the following information:

·       Dealer's name and taxpayer ID number

·       Buyer's name and taxpayer ID number

·       Sale date and sale price

·       Maximum credit allowable under IRC 25E

·       Vehicle identification number (VIN),

·       Battery capacity

Please note that purchases made before 2023 don't qualify.