How to Get the Used EV Tax Credit Before It Expires

The tax credit for a used EV or PHEV is either $4,000 or 30 percent of the sale price of the vehicle, whichever is lower. That means if you’re spending less than $13,333, you’re not going to get the full $4,000. For example, if you’re buying an older used Chevrolet Volt or Nissan Leaf for $8,000, your tax credit would be $2,400.

Buyers must have a modified adjusted gross income (AGI) below $150,000 for joint filers, $112,500 for a head of household, and $75,000 for an individual—lower than the income limits for buyers of new EVs. You can’t get the credit if you’re a dependent on someone else’s taxes, you can’t sell a car to yourself, and you can’t claim the credit more than once every three years.

To determine eligibility, you can choose to use your income either from the year you take delivery of the vehicle or the year before. If your income exceeds the limit and you claim the credit, the IRS will require you to repay it.

There are several rules about which EVs, fuel-cell vehicles, and PHEVs qualify:

• The car’s model year must be at least two years older than the current calendar year. That means in 2025, cars up to the 2023 model year are eligible. Only model year matters—not the year a car was first sold or registered.

• The car cannot have a sale price of more than $25,000, not including taxes and fees.

• Any car that has already been resold to a qualified buyer after Aug. 16, 2022 (the date the IRA went into effect), is no longer eligible for a tax credit. This is called the “first transfer” rule, and it is intended to prevent cars from being purchased and resold by individuals solely for the purpose of claiming tax credits (dealer transfers don’t count), says Chris Harto, CR’s senior policy analyst for transportation. But the way the law is written severely restricts which vehicles will ever qualify, he says. It might also make it difficult to determine how much a disqualified vehicle should cost compared with one that qualifies for the credit, especially as dealerships factor the tax credit into advertised prices.

Yes. According to the IRS, a car must be purchased from an authorized dealership that reports required information to you at the time of sale and to the IRS. Private sales—buying a car from a friend or family member or a stranger on Facebook Marketplace, for example—don’t count.

Dealerships are now able to offer the tax credit as an instant discount to qualifying car buyers. Some dealerships factor the tax credit into online pricing, so be sure to read the fine print—especially if you don’t qualify for the credit.

In 2024, the tax credit turned into an instant rebate, available at most dealerships, and can be claimed regardless of your tax burden. Otherwise, buyers can submit Form 8936, “Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-in Electric Vehicles),” with their tax returns.

The IRS released a long list of used EVs and PHEVs that, in theory, qualify for a tax credit. However, the list doesn’t take into account restrictions on a vehicle’s maximum sale price. (Good luck getting a one-owner 2021 Bentley Bentayga PHEV for less than $25,000!) 

Of the more than 80 EVs and PHEVs on the IRS’ list, only a handful have at least average reliability, largely because the earliest crop of EVs struggled in our reliability surveys.

Read our used EV buying guide to learn more.