Learn what it takes to qualify for the Clean Vehicle Tax Credit for up to $7,500.

If you buy a qualifying electric (EV) or hybrid vehicle, you could be eligible for the Clean Vehicle Tax Credit for up to $7,500. Whether you can claim the credit depends on your income, the vehicle and when you made the purchase.

Who qualifies for the tax credit?

The first factor for qualification concerns use of the vehicle. The vehicles must be bought for personal use and used primarily in the U.S.

The second factor is your income. To be eligible for the tax credit your modified adjusted gross income (AGI) may not exceed these limits:

• $300,000 for married couples filing jointly
• $225,000 for heads of households
• $150,000 for all other filers

Qualifying new vehicles

In addition to being a new 2023 model or newer, with a battery capacity of at least seven kilowatt hours and gross vehicle weight rating of less than 14,000 pounds, the vehicle must be made by a qualified manufacturer. Also, the MSRP/sticker price for vans, SUVs and trucks may not exceed $80K; the max for other vehicles is $55K.

At the time of writing this blog, the following models qualify for the tax credit.

Manufacturer	Model Year	Vehicle	MSRP Limit
Audi	2023	Audi Q5 TFSI e Quattro (PHEV)	$80,000
BMW	2021, 2022, 2023	BMW 330e	$55,000
	2021, 2022, 2023	BMW X5 xDrive45e	$80,000
Ford Motor Company	2022, 2023	Ford Escape Plug-In Hybrid	$55,000
	2022, 2023	Ford E-Transit	$80,000
	2022, 2023	Ford F-150 Lightning	$80,000
	2022, 2023	Ford Mustang Mach-E	$55,000
	2022, 2023	Lincoln Aviator Grand Touring	$80,000
	2022, 2023	Lincoln Corsair Grand Touring	$55,000
General Motors	2022, 2023	Chevrolet Bolt	$55,000
	2022, 2023	Chevrolet Bolt EUV	$55,000
	2022, 2023	Cadillac Lyriq	$55,000
Nissan	2021, 2022, 2023	Nissan Leaf S	$55,000
	2021, 2022	Nissan Leaf S Plus	$55,000
	2021, 2022	NIssan Leaf SL Plus	$55,000
	2021, 2022	Nissan Leaf SV	$55,000
	2021, 2022, 2023	Nissan Leaf SV Plus	$55,000
Rivian Automotive	2022, 2023	Rivian R1S	$80,000
	2022, 2023	Rivian R1T	$80,000
Stellantis N.V.	2022, 2023	Chrysler Pacifica PHEV	$80,000
	2022, 2023	Jeep Wrangler 4xe	$80,000
	2022, 2023	Jeep Grand Cherokee 4xe	$80,000
Tesla	2022, 2023	Tesla Model 3 Rear Wheel Drive	$55,000
	2022, 2023	Tesla Model 3 Long Range	$55,000
	2022, 2023	Tesla Model Y All-Wheel Drive – 7 seat variant (3-rows)	$80,000
	2022, 2023	Tesla Model Y Long Range – 7 seat variant (3-rows)	$80,000
	2022, 2023	Tesla Model Y Performance – 7 seat variant (3-rows)	$80,000
	2022, 2023	Tesla Model Y All-Wheel Drive – 5 seat variant (2-rows)	$55,000
	2022, 2023	Tesla Model Y Long Range – 5 seat variant (2-rows)	$55,000
	2022, 2023	Tesla Model Y Performance – 5 seat variant (2-rows)	$55,000
Volkswagen	2023	Volkswagen ID.4	$55,000
	2023	Volkswagen ID.4 Pro	$55,000
	2023	Volkswagen ID.4 Pro S	$55,000
	2023	Volkswagen ID.4 S	$55,000
	2023	Volkswagen ID.4 AWD Pro	$80,000
	2023	Volkswagen ID.4 AWD Pro S	$80,000
Volvo	2022	Volvo S60 (PHEV)	$55,000
	2022	Volvo S60 Extended Range	$55,000
	2023	Volvo S60 T8 Recharge (Extended Range)	$55,000

A number of automakers are designated as a “qualified manufacturer” but haven’t yet submitted a list of specific makes and models that are eligible. This includes:

• American Honda Motor Co.
• Hyundai
• Jaguar Land Rover
• Kia
• Mazda
• Mercedes-Benz
• Mitsubishi
• Polestar Automotive
• Porsche
• Proterra Operating Co.
• Subaru
• Toyota

For updates on qualifying models, visit the IRS information page.

Who qualifies for tax credits on used EV and fuel cell vehicles (FCVs)—purchased in 2023

Used car buyers in 2023 may also qualify for a clean vehicle credit of 30% of the sale price up to a maximum credit of $4,000.

The credit is available to individuals who buy the car for their own use and not resale. To be eligible, you can’t be claimed as dependent on another person’s tax return, nor can you have claimed another used clean vehicle credit in the three years before the purchase date.

As with the credit for new EV and hybrid cars, the credit for used clean cars has income limits. Your AGI may not exceed $150,000 for married filing jointly or a surviving spouse, $112,500 for heads of households and $75,000 for all other filers.

Qualified used cars

One key eligibility for the used car clean vehicle tax credit is that the vehicle must be purchased from a licensed dealer.

It must also have a sale price of $25,000 or less, be of model year at least 2 years earlier than the calendar year you buy it, have a gross vehicle weight rating of less than 14,000 pounds, have a FCV or EV battery capacity of at least seven kilowatt hours and be for use primarily in the U.S.

Learn about the complete IRS details on the Used Clean Vehicle Credit.

If you purchased a new EV in 2022 or before

Tax credits are available for new EVs purchased in 2022 or before but the rules are slightly different than for 2023 models.

Also, be aware that if you purchased a qualified EV between August 17, 2022, and December 31, 2022, the vehicle must meet the requirement of final assembly in North America. You can check if vehicle meets the assembly requirement by entering the VIN in the U.S. Department of Energy Data Center location identifier.

Is the EV tax credit available for leased vehicles?

As of January 1, some leased vehicles qualify for clean vehicle tax credits. However, the credit goes to the manufacturer that owns the car, not the individual leasing the car.

Attend to all the details to qualify

As it seems to be with all tax credits, the clean vehicle tax credit requires attending to all the details in order to qualify. With a tax credit of up to $7,500 at stake, it’s well worth taking time to find an eligible vehicle if you’re in the market for one.

As always, we encourage you to consult with a knowledgeable tax advisor about your individual situation, and when you’re ready to buy a new or used EV or hybrid vehicle, consider a Consumers auto loan at a competitive rate.

 

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