How to claim the $7,500 EV tax credit

What the credit actually is

The Clean Vehicle Credit (IRC §30D) is a federal income tax credit of up to $7,500 for new EVs and $4,000 for used EVs. It's a non-refundable credit — meaning it reduces your tax liability dollar-for-dollar but you can't receive more than what you owe. As of 2024, you can also transfer the credit to the dealer at point of sale, effectively making it a discount even if your tax liability is lower.

Income limits

Your modified adjusted gross income (MAGI) must be under the following limits. If you exceed these, you receive no credit — there's no phase-out.

• ·Single filer: $150,000
• ·Head of household: $225,000
• ·Married filing jointly: $300,000
• ·Tip: use whichever year is lower — the year of purchase or the prior year

Vehicle eligibility

Not every EV qualifies. Two tests must pass simultaneously.

• ·MSRP cap: $55,000 for sedans/hatchbacks, $80,000 for SUVs, trucks, and vans
• ·Assembly: final assembly must be in North America (US, Canada, Mexico)
• ·Battery sourcing: increasing % of battery minerals and components must be sourced from North America or US allies — this is why some models only get $3,750
• ·Check eligibility at fueleconomy.gov before you shop

The point-of-sale option (since Jan 2024)

This changed everything. You can now transfer the tax credit to your dealer, who applies it as a direct price reduction at signing. You don't need to wait until tax time. The dealer files for reimbursement from the IRS. You still need to meet the income limits, and the dealer needs to register with the IRS's Energy Credits Online portal — confirm this before signing.

Used EV credit

Qualified used EVs purchased from a dealer get a credit of 30% of the sale price, up to $4,000. Income limits are lower: $75k single, $112.5k head of household, $150k joint. The vehicle must be at least 2 years old, under $25,000, and this must be the first time it's claimed on that specific VIN.