Governments worldwide have been promoting the switch to electric vehicles for more sustainable mobility. However, it is undeniable that EVs are extremely expensive as of now. That said, lawmakers and national leaders are formulating various policies and programs that offer tax incentives and rebates to aid customers in buying an EV.
To answer the main question, some” secondhand or used EVs and PHEVs are qualified for tax rebates.
digitaltrends indicated that secondhand EV buyers are eligible for up to $4,000 tax credit under the US Inflation Reduction Act as of January 1, 2023. As mentioned, such incentives are critical in the government’s strategy to boost EV uptake and reduce the transport sector’s CO2 emissions.
Through these incentives, the government is making EV prices more affordable for the mass market, particularly those incapable of buying a new unit.
However, the government outlined some standards for an EV and buyer to qualify for the said $4,000 tax credit.
Tax credit eligibility conditions
The government requires the EV’s age to be at least two model years old to guarantee its authenticity as a used unit.
Apart from that, the secondhand EV must have at least a 7 kilowatt-hours battery capacity, and a licensed dealer must be the one to sell it.
Furthermore, the EV must not yet claim the particular tax credit and have a selling price of less than $25,000. Also, the company must register the particular model for the tax credit.
|Age||at least two model years old|
|Battery capacity||at least 7 kilowatt-hours|
|Selling price||less than $25,000|
As for the buyer’s part, the tax credit can only be accessed once every three years.
Moreover, buyers must have the following modified adjusted income:
|Buyer’s modified adjusted income||Requirements|
|Single filers||Less than $75,000|
|Head of household||Less than $112,500|
|Joint filers||Less than $150,000|
Considering all these criteria, buyers may qualify for a partial or full tax credit.
For those interested, you can submit IRS Form 8936 together with your tax return for the year you bought the car to claim the used EV tax credit.
More importantly, the form must contain details such as the vehicle identification number (VIN).