2023 EV Tax Credit: Everything You Need to Know

2023 EV Tax Credit: Everything You Need to Know

February 15, 2023

Introduction to the EV Tax Credit

Thinking about going green in 2023 with a new Electric Vehicle? We want to make sure that you are aware that as part of the Inflation Reduction Act, you can get up to a $$7,500 EV tax credit on your next car Purchase. 

The 2023 Clean Vehicle Credit isn’t the easiest to navigate, and it has significantly changed since the 2022 EV Tax Credit Program. We have gathered some information here that will help you understand how this program works so that you can take advantage of it for your next purchase.  

Clean Vehicle Credit Eligibility 

There are some rules that apply to you, the vehicle, and the seller when applying for the $7,500 tax credit.  

Clean Vehicle Credit Vehicle Eligibility

  • A battery Capacity of 7 Kilowatt Hours 
  • It must weigh less than 14,000lbs (about 6350.29 kg) 
  • It must be made from one of a list of manufacturers – Found Here 
  • The manufacturer must not have sold 200,000 EVs in the US 
  • Must be assembled in North America 
  • The MSRP Must not exceed based on the kind of vehicle it is 
    • $80,000 for vans, sport utility vehicles (SUVs), and pickup trucks. 
    • $55,000 for other vehicles 

Clean Vehicle Credit Buyer Eligibility

  • You must be purchasing it for personal use 
  • The primary use will be in the US 
  • Your Income must be under a certain amount based on how you file taxes 
    • Married Couples filing jointly – $300,000 
    • Heads of Household – $225,0000 
    • All other Filers – $150,000 

Clean Vehicle Credit Sale Eligibility

  • The vehicle must be purchased new 
  • The seller must inform you that they are going to submit your name and Tax ID to claim the credit. 

Used Electric Vehicles and 2022 Purchases

If you purchase a used EV you may be eligible up to a $4,000 credit and if you purchased a new car before 2023 you may qualify for up to the full $7,500 tax credit.

Used Clean Vehicle Credit Eligibility

  • The car must be a 2021-year model or earlier 
  • Income must be under $150,000 for a household and $75,000 for a single person 
  • The sale price must be under $25,000 
  • Must have a capacity of at least 7kWh 

If you purchased your car in 2022 you might be able to get up to a $7,500 credit. The breakdown is $2,917 for vehicles with at least 5 Kilowatt hours (kWh) and $417 for each kWh after. Additionally, the vehicle must be less than 14,000 bs 

If you purchased a vehicle in 2022 after August 16th, your purchase may qualify if it follows the rules for other 2022 purchases and must have been assembled in the US. 

How to claim the EV Tax Credit

To claim the credit for your car purchase, you will need to fill out tax Form 8936 and send it with your Vehicle Identification Number (VIN) and your tax return.  

Form 8936  

More questions? We can help!

While there are a lot of restrictions to be aware of you have plenty of choices when it comes to purchasing an EV. We want to help you make sure that you get as much of the tax credit as possible.

If you have any questions, please give us a call, or visit one of our many dealerships throughout Portland, Vancouver, Sandy, and Kelso. And, while you’re out make sure to take a test drive in one of the many EVs we have available now. 

Resources

Here are a few additional resources for you to check out to make sure you fully understand how to get your $7,500 Tax Credit 

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