$4,000 Used EV Tax Credit 2024- Income Limit, Eligibility details

As we explore the world of electric cars, the rules about tax breaks and incentives keep changing. Since January 1, 2023, there have been new tax breaks for both new and used electric cars. Now, let’s take a closer look at what the 2024 tax breaks for used electric cars are all about.

$4,000 Used EV Tax Credit 2024

Even though the $7,500 federal tax credit for new EVs is still around, fewer models qualify now. Automakers are adjusting by moving production to the U.S., but that takes time.

In the meantime, looking at used EVs could be a good idea, with a revamped federal tax credit of up to $4,000. Let’s break down how it works.

Current Tax Credit for Used EVs

In a perfect world, buying a used electric vehicle (EV) would mean qualifying for government tax credits. But, things aren’t that simple. Thanks to the Inflation Reduction Act signed by President Biden, federal tax credits have been extended, offering renewed benefits for buying used EVs, with certain conditions set by the IRS.

Starting January 1, 2023, if you purchase a qualified used electric or fuel cell vehicle from a licensed dealer for $25,000 or less, you might be eligible for a tax credit under the Internal Revenue Code Section 25E.

Now, under the new rules, used EV buyers can get a credit worth 30% of the purchase price, up to $4,000. But there are some rules to follow:

Also Read:- How to qualify for $7500 EV Tax Credit?

Eligibility Criteria for Used Ev:

• Who Can Buy: You can buy the car for yourself, not to sell it later.
• Income Limits: Your income must be under $75,000 if you’re single, $112,500 if you’re the main person supporting your household, or $150,000 if you’re filing taxes jointly with someone else.
• Previous Ownership: You can’t be the first owner of the car, and you can’t be listed as a dependent on someone else’s tax return.
• Previous Tax Credits: You can’t have claimed another discount for buying a used clean vehicle in the three years before buying this electric car.
• Car Requirements: The car must be at least two years older than the current year, cost less than $25,000, and meet other specific qualifications.
• Maximum Discount: You can get a discount of up to 30% of the car’s price, but no more than $4,000.
• Weight Limit: The car must weigh less than 14,000 pounds.
• Battery Requirement: It must be a plug-in electric car with a battery capacity of at least 7 kWh.
• Where to Buy: You have to buy the car from a certified dealer.
• One-Time Discount: You can only get this discount once for each car you buy.

Also Read:- Federal Tax Credit for Electric Cars 2024 Income limit, Requirement

Qualifications for Used EVs:

• Sale price must be $25,000 or less.
• The car should be made at least 2 years before you buy it.
• It shouldn’t have been sold to another person after August 16, 2022.
• The car’s weight limit should be less than 14,000 pounds.
• It has to be either a special kind of fuel-efficient car or an electric car with a battery that holds at least 7 kilowatt-hours.
• The car should mainly be used in the United States.
• Purchased from a certified dealer.

Available Used EVs for Tax Credits

While the list of qualifying used EVs provided by the IRS is extensive, it’s not exhaustive. Manufacturers continually update the roster, ensuring compliance with eligibility requirements. However, finding 2021 or 2022 models priced below $25,000 may prove challenging, but not impossible.

Here are some of the all-electric models currently eligible:

Manufacturer	Model(s)	Years	Incentive
AUDI	e-tron	2019, 2021-2022	$4,000
	e-tron Sportback	2020-2022	$4,000
BMW	i3 (with or without range extender)	2014-2021	$4,000
	i3 (60Ah)	2017	$4,000
	i3s (with or without range extender)	2018-2021	$4,000
	i4 Gran Coupe	2022	$4,000
	iX xDrive50	2022	$4,000
CHEVROLET (GM)	Bolt	2017-2021	$4,000
	Bolt EV	2022	$4,000
	Bolt EUV	2022	$4,000
	Spark EV	2014-2016	$4,000
FIAT	500e	2013-2019	$4,000
FORD MOTOR COMPANY	E-Transit	2022	$4,000
	F-150 Lightning Standard/Extended Range	2022	$4,000
	Focus Electric	2012-2018	$4,000
	Mustang Mach-E	2021-2022	$4,000
GENESIS	G80	2022	$4,000
HYUNDAI	IONIQ 5	2022	$4,000
	Ioniq BEV	2017-2021	$4,000
	Kona Electric	2019-2022	$4,000
MERCEDES-BENZ	B250e (B-Class)	2014-2017	$4,000
	EQB SUV (all trims)	2022	$4,000
	EQS Sedan (all trims)	2022	$4,000
MINI	Cooper S E Hardtop	2020-2022	$4,000
MITSUBISHI	i-MiEV	2012-2014, 2016-2017	$4,000
NISSAN	LEAF (all models)	2011-2022	$4,000
POLESTAR	2	2021-2022	$4,000
PORSCHE	Taycan (all models)	2020-2022	$4,000
RIVIAN	EDV	2022	$4,000
	R1T	2022	$4,000
	R1S	2022	$4,000
smart	Coupe EV	2013-2018	$4,000
	EQ Fortwo Coupe	2019	$4,000
	Cabrio EV	2013-2015, 2017-2018	$4,000
	EQ Fortwo Cabrio	2019	$4,000
TESLA	Model 3	2017-2022	$4,000
	Model S	2012-2021	$4,000
	Model X	2016-2021	$4,000
	Model Y	2020-2022	$4,000
	Roadster	2009-2011	$4,000
TOYOTA	RAV4 EV	2012-2014	$4,000
VOLKSWAGEN	e-Golf	2015-2019	$4,000
	ID.4 (all models)	2021-2022	$4,000
VOLVO	C40	2022	$4,000
	XC40 Recharge	2021-2022	$4,000

Apart from used EV tax credits, there are more ways to save money. The Inflation Reduction Act extends federal tax credits for buying new EVs, promoting cleaner transportation options. While discussions continue in Capitol Hill, there are still chances to get tax credits before stricter battery rules kick in.

Plus, states offer their own incentives, credits, and exemptions for EV buyers. These perks differ depending on where you are and can cover purchases, leases, or setting up home chargers.

Conclusion

Considering a new or used EV? Understanding tax credits is key. Seek guidance from tax experts and EV dealers to maximize benefits. Exploring the EV realm means saving money and embracing sustainability.

FAQs

How do I know if a used EV qualifies for the tax credit?

To qualify for the tax credit, a used EV must meet specific criteria outlined by the IRS, including but not limited to the sale price, model year, and previous ownership history. Additionally, it must be purchased from a certified dealer. Consulting with the dealer and reviewing IRS guidelines can help determine eligibility.

Can I claim the tax credit if I purchase a used EV from a private seller?

No, the tax credit for used EVs is applicable only to purchases made from licensed dealers. Transactions with private sellers do not qualify for the tax credit.

Are there any income restrictions to qualify for the tax credit?

To get the tax credit, you need to earn under a certain amount. For individuals, it’s $75,000. If you’re the head of your household, it’s $112,500. And for couples filing together, it’s $150,000. If you earn more than these amounts, you may not qualify for the credit.

Can I claim the tax credit if I have claimed a similar credit for another used clean vehicle in the past?

If someone already got a tax credit for buying a different clean car within three years before buying an electric car, they can’t get another tax credit for the electric car. Each taxpayer is limited to one credit per vehicle in its lifetime.

Are there state-level incentives available for purchasing a used EV?

Yes, many states offer additional incentives, credits, and exemptions for purchasing or leasing EVs, as well as for installing home chargers. These benefits vary by location, so it’s essential to research state-specific programs and requirements.

How often is the list of qualifying used EVs updated?

The list of qualifying used EVs provided by the IRS is periodically updated as manufacturers provide relevant information and ensure compliance with eligibility requirements. Consumers should stay informed about any changes to ensure their chosen vehicle qualifies for the tax credit.

Is there a maximum limit on the number of times a used vehicle can qualify for the tax credit?

Yes, each used vehicle qualifies for the tax credit only once in its lifetime. Once the tax credit has been claimed for a particular vehicle, it cannot be claimed again by any subsequent owner.