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Wondering if you qualify for the Clean Vehicle Tax Credit in 2024? Learn how to claim up to $7,500 for new EVs or $4,000 for used ones, plus income limits, vehicle eligibility, and step-by-step guidance.
As electric vehicles (EVs) continue to gain popularity, federal and state governments are offering generous tax incentives to encourage more consumers to go green. But navigating the rules around clean vehicle tax credits can be tricky. Who qualifies? Which vehicles are eligible? And how do you actually claim the credit?
In this guide, we’ll break down everything you need to know about the Clean Vehicle Tax Credit—formerly known as the Qualified Plug-in Electric Drive Motor Vehicle Credit—and help you determine whether you're eligible.
The Clean Vehicle Tax Credit is a federal incentive that offers up to $7,500 in non-refundable tax credits to consumers who purchase eligible new or used electric vehicles (EVs) or fuel cell vehicles (FCVs).
The credit is part of the Inflation Reduction Act of 2022, which updated and extended the tax benefits for clean energy vehicles through 2032. These incentives are designed to reduce greenhouse gas emissions and support the transition to a more sustainable transportation system.
There are two main types of credits:
Let’s dig into each one and how you can qualify!
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The maximum credit for a new clean vehicle is up to $7,500, broken into two parts:
You’ll only receive the full $7,500 if the vehicle meets both requirements.
To claim the New Clean Vehicle Credit, you must:
Your Modified Adjusted Gross Income (MAGI) must not exceed:
You can use your MAGI from the year you take delivery or the prior year—whichever is lower and qualifies.
To qualify, the manufacturer’s suggested retail price (MSRP) must not exceed:
To qualify for the New Clean Vehicle Credit, the vehicle must:
You can check vehicle eligibility on the Department of Energy’s list of qualifying EVs and plug-in hybrids.
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If a brand-new EV isn't in your budget, good news: there's also a credit available for used clean vehicles purchased from a dealership.
For qualifying used clean vehicles, the credit is 30% of the sale price, up to $4,000 maximum.
To be eligible, you must:
Your MAGI must not exceed:
The used clean vehicle must:
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Businesses can benefit too! If you’re purchasing an electric or fuel-cell vehicle for commercial use, you may qualify for the Commercial Clean Vehicle Credit.
The credit applies to both purchased and leased vehicles and has no income limit or MSRP cap.
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For vehicles purchased in 2023 and 2024, you can claim the credit on your Form 8936 when you file your federal income tax return. Be sure to keep all documentation, including:
Important: This is a non-refundable tax credit, which means it can reduce your tax liability but you won’t receive the full amount as a refund if you don’t owe that much in taxes.
In 2024, you can transfer the credit to the dealership at the point of sale. This means you can apply the credit as a discount on the purchase price, reducing your upfront costs.
💡 The dealer will need to be registered with the IRS and file the necessary paperwork on your behalf.
Here’s a quick checklist to determine if you’re eligible:
✅ Are you buying the car for personal use, not resale?
✅ Will you be the first owner (for new cars) or did you buy it from a dealer (for used cars)?
✅ Is your income below the IRS thresholds?
✅ Does the vehicle meet the eligibility rules (battery size, price, assembly location, etc.)?
✅ Are you filing your taxes for the year you took delivery?
If you can answer “yes” to all of these, there’s a good chance you’re eligible.
Here are a few popular models that may be eligible, depending on the year and specs:
Check the vehicle’s VIN and run it through the IRS tool or fueleconomy.gov for confirmation.
🚫 Assuming all EVs qualify. Some EVs don't meet final assembly or battery sourcing requirements.
🚫 Missing the income limits. Even if your vehicle qualifies, you must meet the MAGI thresholds.
🚫 Purchasing from a private seller for used EVs. Only purchases from a licensed dealer qualify for the used vehicle credit.
🚫 Failing to keep documentation. You’ll need proof of eligibility when claiming the credit on your return or transferring it at purchase.
In addition to the federal credit, many states offer their own EV incentives, including:
You can check what’s available in your state using the DOE's incentives map.
The Clean Vehicle Tax Credit can significantly reduce the cost of going electric—but only if you meet the criteria. With new changes rolling out under the Inflation Reduction Act, it’s more important than ever to check eligibility before buying.
Whether you're looking for a brand-new Tesla, a used Chevy Bolt, or an EV for your business, there are federal tax credits waiting to be claimed. Just make sure the vehicle qualifies, your income is within limits, and you understand how to claim the credit.
Navigating clean energy tax credits can be confusing. If you're unsure about your eligibility or need help filing, consider working with a tax professional who understands the latest EV credit rules.
Want a personalized tax strategy for your next vehicle purchase? Reach out today—we’d love to help you drive away with savings.
Eligible buyers can receive up to $7,500 for a new clean vehicle and up to $4,000 for a used clean vehicle, depending on factors like income level, battery capacity, and vehicle eligibility.
To qualify, you must meet income limits, purchase an eligible electric or plug-in hybrid vehicle, and use it primarily in the U.S.. Your tax liability must also be large enough to absorb the credit unless you opt for the point-of-sale transfer.
No, you can't claim the tax credit directly if you lease. However, the leasing company can claim it, and some pass the savings on to you through lower monthly payments—so it's worth asking!
You can check the IRS list of eligible clean vehicles by year and model. Vehicles must meet criteria such as final assembly in North America, price caps, and battery sourcing standards.
Yes! Starting in 2024, you can transfer the tax credit directly to the dealership at the time of purchase—essentially using it as a discount upfront, instead of waiting to claim it when you file taxes.
Being audited is comparable to being struck by lightning. You don't want to practice pole vaulting in a thunderstorm just because it's unlikely. Making sure your books are accurate and your taxes are filed on time is one of the best ways to keep your head down during tax season. Check out Vincere's take on tax season!
This post is just for informational purposes and is not meant to be legal, business, or tax advice. Regarding the matters discussed in this post, each individual should consult his or her own attorney, business advisor, or tax advisor. Vincere accepts no responsibility for actions taken in reliance on the information contained in this document.
For business tax planning articles, our tax resources provides valuable insights into how you can reduce your tax liability now, and in the future.
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