Greg’s granddaughter driving the 2023 Tesla Model 3 in the driveway at home
Credits for New Clean Vehicles Purchased in 2023 or After
If you place in service a new plug-in electric vehicle (EV) or fuel cell vehicle (FCV) in 2023 or after, you may qualify for a clean vehicle tax credit.
Who Qualifies
You may qualify for a credit up to $7,500 under Internal Revenue Code Section 30D if you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV). The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles purchased from 2023 to 2032.
The credit is available to individuals and their businesses.
To qualify, you must:
- Buy it for your own use, not for resale
- Use it primarily in the U.S.
In addition, your modified adjusted gross income (AGI) may not exceed:
- $300,000 for married couples filing jointly
- $225,000 for heads of households
- $150,000 for all other filers
You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your modified AGI is below the threshold in 1 of the two years, you can claim the credit.
NOTE: The income limitation does not apply to businesses.
The credit is nonrefundable, so you can’t get back more on the credit than you owe in taxes. You can’t apply any excess credit to future tax years.
Credit Amount
The amount of the credit depends on when you placed the vehicle in service (took delivery), regardless of purchase date.
For vehicles placed in service January 1 to April 17, 2023:
- $2,500 base amount
- Plus $417 for a vehicle with at least 7 kilowatt hours of battery capacity
- Plus $417 for each kilowatt hour of battery capacity beyond 5 kilowatt hours
- Up to $7,500 total
In general, the minimum credit will be $3,751 ($2,500 + 3 times $417), the credit amount for a vehicle with the minimum 7 kilowatt hours of battery capacity.
For vehicles placed in service April 18, 2023 and after:
Vehicles will have to meet all of the same criteria listed above, plus meet new critical mineral and battery component requirements for a credit up to:
- $3,750 if the vehicle meets the critical minerals requirement only
- $3,750 if the vehicle meets the battery components requirement only
- $7,500 if the vehicle meets both
A vehicle that doesn’t meet either requirement will not be eligible for a credit.
Qualified Vehicles
To qualify, a vehicle must:
- Have a battery capacity of at least 7 kilowatt hours
- Have a gross vehicle weight rating of less than 14,000 pounds
- Be made by a qualified manufacturer.
- FCVs do not need to be made by a qualified manufacturer to be eligible. See Rev. Proc. 2022-42 for more detailed guidance.
- Undergo final assembly in North America
- Meet critical mineral and battery component requirements (as of April 18, 2023).
The sale qualifies only if:
- You buy the vehicle new
- The seller reports required information to you at the time of sale and to the IRS.
- Sellers are required to report your name and taxpayer identification number to the IRS for you to be eligible to claim the credit.
In addition, the vehicle’s manufacturer suggested retail price (MSRP) can’t exceed:
- $80,000 for vans, sport utility vehicles and pickup trucks
- $55,000 for other vehicles
MSRP is the retail price of the automobile suggested by the manufacturer, including manufacturer installed options, accessories and trim but excluding destination fees. It isn’t necessarily the price you pay.
Federal Tax Credits for Plug-in Electric and Fuel Cell Electric Vehicles Purchased in 2023 or After
(Vehicle placed into service on or after after April 18, 2023)
BMW
X5 xDrive50e2024PHEV Credit Amount $3,750 MSRP $80,000
Cadillac
LYRIQ2023-2024EV Credit Amount $7,500 MSRP $80,000
Chevrolet
Blazer2024EV Credit Amount $7,500 MSRP $80,000
Bolt2022-2023EV Credit Amount $7,500 MSRP $55,000
Bolt EUV2022-2023EV Credit Amount $7,500 MSRP $55,000
Equinox2024EV Credit Amount $7,500 MSRP $80,000
Silverado2024EV Credit Amount $7,500 MSRP $80,000
Chrysler
Pacifica PHEV2022-2023PHEV Credit Amount $7,500 MSRP $80,000
Ford
E-Transit2022-2023EV Credit Amount $3,750 MSRP $80,000
Escape Plug-in Hybrid2022-2023PHEV Credit Amount $3,750 MSRP $80,000
F-150 Lightning (Extended Range Battery)2022-2023EV Credit Amount $7,500 MSRP $80,000
F-150 Lightning (Standard Range Battery)2022-2023EV Credit Amount $7,500 MSRP $80,000
Mustang Mach-E (Extended Range Battery)2022-2023EV Credit Amount $3,750 MSRP $80,000
Mustang Mach-E (Standard Range Battery)2022-2023EV Credit Amount $3,750 MSRP $80,000
Jeep
Grand Cherokee PHEV 4xe2022-2023PHEV Credit Amount $3,750 MSRP $80,000
Wrangler PHEV 4xe2022-2023PHEV Credit Amount $3,750 MSRP $80,000
Lincoln
Aviator Grand Touring2022-2023PHEV Credit Amount $7,500 MSRP $80,000
Corsair Grand Touring2022-2023PHEV Credit Amount $3,750 MSRP $80,000
Rivian
R1S2023EV Credit Amount $3,750 MSRP $80,000
R1T2023EV Credit Amount $3,750 MSRP $80,000
Tesla
Model 3 Long Range All-Wheel Drive2023EV Credit Amount $7,500 MSRP $55,000
Model 3 Performance2022-2023EV Credit Amount $7,500 MSRP $55,000
Model 3 Standard Range Rear Wheel Drive2022-2023EV Credit Amount $7,500 MSRP $55,000
Model Y All-Wheel Drive2022-2023EV Credit Amount $7,500 MSRP $80,000
Model Y Long Range All-Wheel Drive2022-2023EV Credit Amount $7,500 MSRP $80,000
Model Y Performance2022-2023EV Credit Amount $7,500 MSRP $80,000
Volkswagen
ID.4 AWD PRO2023EV Credit Amount $7,500 MSRP $80,000
ID.4 AWD PRO S2023EV Credit Amount $7,500 MSRP $80,000
ID.4 AWD PRO S PLUS2023EV Credit Amount $7,500 MSRP $80,000
ID.4 PRO2023EV Credit Amount $7,500 MSRP $80,000
ID.4 PRO S2023EV Credit Amount $7,500 MSRP $80,000
ID.4 PRO S PLUS2023EV Credit Amount $7,500 MSRP $80,000
ID.4 S2023EV Credit Amount $7,500 MSRP $80,000
ID.4 STANDARD2023EV Credit Amount $7,500 MSRP $80,000