New EV Tax Credit

Tax Credit Value: $0 to $7,500

Overview

When purchasing a new EV, you might be eligible for a federal tax credit up to $7,500. The federal government is incentivizing American-made EVs in a few key ways:

Half of the credit ($3,750) is based on whether enough of the minerals in the battery were sourced from the United States or a free trade partner.
The other half ($3,750) is based on whether the battery components were produced in the United States.
To receive the tax credit, the vehicle must have final assembly in North America.

Eligibility

The tax credit must be claimed for the year the vehicle was put into service.
The vehicle must be for personal use, not for resale.
The vehicle must have an MSRP of $55,000 or less for passenger cars and $80,000 or less for SUVs, pickup trucks, and vans.
The vehicle must have final assembly completed in North America. You can find out if your vehicle meets this requirement by using this FuelEconomy.gov tool.
Leased EVs are not eligible for a personal tax credit since the leasing company owns the vehicle. However, as part of a lease agreement, the company may pass through a lease incentive derived from the business’s EV tax credit. Because commercial EV tax credits are less stringent, you may be able to get a pass-through credit for vehicles that don’t qualify for the personal tax credit.
Buyer must meet the Adjusted Gross Income (AGI) requirements:
- $150,000 or less (individual)
- $225,000 or less (head of household)
- $300,000 or less (married filing jointly)

How to Redeem

First, confirm you're eligible for the federal tax credit by reviewing the IRS guidance. You can use this FuelEconomy.gov tool to confirm whether your vehicle is eligible.
Decide whether you want to take the credit immediately (by having your dealer apply the incentive to your purchase at the time of sale) or take the credit when you file your next tax return. We recommend working through a dealer, which allows you to get the financial benefit much sooner and ensures you get the full benefit regardless of your tax liability.
Purchase the vehicle and receive an IRS time-of-sale report from your dealership, which confirms your eligibility for the tax credit and whether it was passed through by the dealer.
File Form 8936 (Clean Vehicle Credits) when you file your tax return for the year you purchased the vehicle. You need to file this form regardless of the way you received the tax credit (dealer pass-through or waiting to claim on your return).
Consult a tax professional for additional support

Additional resources: IRS checklist; Step-by-step guide