Lectrium
Shop EVs

EV Knowledge Hub

Dealership Brands

For dealershipsBook a demo

Published date: March 27, 2024

2024 EV Tax Credit: Exploring the Latest Changes and Eligibility

2024 EV Tax Credit: Exploring the Latest Changes and Eligibility

Here are the latest EV tax credits for 2024 from the IRS! We've broken down the eligibility criteria based on your income and ownership status to help you understand if you qualify for these rebates. Make sure you are maximizing savings when buying a new or used EV. Read for full requirements.

Table of contents

Additionally, you can now apply the tax credit right when you buy the car, without waiting for tax season. You have options too – you can either get a credit on your tax return or lower the car's price at the dealership. But keep in mind, with battery restrictions getting tighter, fewer cars might qualify this year. In this blog post, we'll break down the federal tax incentives for EVs and show you which cars might be eligible for the new credit, according to the IRS. Get ready for an inside look into EV tax incentives!

Which EVs and plug-in hybrids (PHEVs) qualify for the federal tax credit in 2024

If you're curious about which electric vehicles and plug-in hybrids are eligible for these tax credits, you're in luck. We've compiled a comprehensive list of the models of electric vehicles that qualify for the tax credit and the respective amounts you can potentially save:

EV and PHEV Tax Credits Up to $7,500:

  • Acura ZDX (2024): $80,000 MSRP
  • Cadillac Lyriq (2024): $80,000 MSRP
  • Chevrolet Bolt EUV (2022-2023): $55,000 MSRP
  • Chevrolet Bolt EV (2022-2023): $55,000 MSRP
  • Chevrolet Blazer EV (2024): $80,000 MSRP
  • Chevrolet Equinox EV (2024): $80,000 MSRP
  • Chrysler Pacifica PHEV (2022-2024): $80,000 MSRP
  • Ford F-150 Lightning Standard / Extended Range Battery (2022-2024): $80,000 MSRP
  • Honda Prologue (2024): $80,000 MSRP
  • Tesla Model 3 Performance 2023-2024: $55,000 MSRP
  • Tesla Model X Long Range (2023-2024): $80,000 MSRP
  • Tesla Model Y AWD / Performance (2023-2024): $80,000 MSRP
  • Tesla Model Y RWD (2024):  $80,000 MSRP
  • Volkswagen ID.4 Standard / AWD PRO / AWD PRO S / AWD PRO S PLUS / PRO / PRO S / PRO S PLUS / S / (2023-2024): $80,000 MSRP

EV and PHEV Tax Credits Up to $3,750:

  • Audi Q5 PHEV 55 TFSI e quattro / Q5 S Line 55 TFSI e quattro: $80,000 MSRP
  • Ford Escape Plug-In Hybrid (2022-2024): $80,000 MSRP
  • Jeep Grand Cherokee PHEV 4xe (2022-2024): $80,000 MSRP
  • Jeep Wrangler PHEV 4xe (2022-2024): $80,000 MSRP
  • Lincoln Corsair Grand Touring (2022-2024): $80,000 MSRP
  • Nissan Leaf S / Leaf SV PLUS (2024): $55,000 MSRP
  • Rivian R1S Dual Large (2023–2024): $80,000 MSRP
  • Rivian Dual Standard / Dual Standard+ / Performance Dual Standard+ (2024): $80,000 MSRP
  • Rivian R1S Quad Large (2022–2024): $80,000 MSRP
  • Rivian R1T Dual Large / Dual Max (2023–2024): $80,000 MSRP
  • R1T Dual Performance Large (2023): $80,000 MSRP
  • R1T Dual Standard / Dual Standard+ / Performance Dual Standard+ (2024): $80,000 MSRP
  • Rivian R1T Quad Large (2022–2024): $80,000 MSRP

How to check if you are eligible for Federal Clean Vehicle Tax?

Thinking of buying an EV? You might be eligible for substantial savings through federal Clean Vehicle Tax incentives! New EVs can qualify for incentives ranging from $3,750 to $7,500, while used EVs may receive up to $4,000. But how do you determine if you meet the requirements?

Requirements for New Car Incentive

Firstly, to qualify for the federal tax credit, you must purchase the electric vehicle for your personal use, not for resale, and primarily use it in the United States. Additionally, there are income thresholds to meet. For married couples filing jointly, the modified adjusted gross income (AGI) limit is $300,000. Heads of households must have an AGI under $225,000, while for all other filers, the limit is $150,000.

You can use your modified AGI from the year your vehicle was delivered or from the previous year, whichever is lower. If your modified AGI falls below the threshold in either of these years, you are eligible to claim the credit.

Calculating your modified AGI involves adding the amount from line 11 of your Form 1040 with any relevant additions, such as amounts from Form 2555 or income excluded from gross income due to certain sources. It's essential to note that the credit is nonrefundable, meaning you can't receive more on the credit than what you owe in taxes, and any excess credit can't be carried over to future tax years.

Requirements for Used Car Incentive

Firstly, to qualify for the credit under Internal Revenue Code Section 25E, you must purchase a qualified electric car for personal use and not for resale. Additionally, you must not be the original owner of the vehicle, nor can you be claimed as a dependent on someone else's tax return. Moreover, you shouldn't have claimed another used clean vehicle credit in the three years preceding the purchase date.

Income thresholds also come into play here. For married individuals filing jointly or surviving spouses, the modified adjusted gross income (AGI) limit is $150,000. Heads of households must have an AGI below $112,500, while for all other filers, the limit is $75,000.

You can base your eligibility on the modified AGI from the year your vehicle was delivered or from the previous year, whichever is lower. If your income falls below the threshold for either of these years, you are eligible to claim the credit.

Just like with the New Clean Vehicle Tax Incentive, calculating your modified AGI involves summing up the amount from line 11 of your Form 1040 with any relevant additions from Form 2555 or income excluded due to specific sources. Keep in mind that this credit is nonrefundable, meaning it can't exceed your tax liability, and any excess credit can't be carried over to future years.

A Recap of Your Personal Eligibility

In summary, whether you are eyeing a brand-new electric vehicle or considering a previously owned plug-in electric car, eligibility for federal tax credits hinges on a few key factors. Understanding these criteria can help you determine your eligibility when purchasing an electric vehicle. Therefore, we advise you to do your own research to personally evaluate your situation or consult a professional. Here are the links to read more:

Don't miss out on potential savings for your EV purchase! Make sure to take advantage of these Clean Vehicle Tax incentives if they apply to you.

Subscribe to our EV newsletter for dealers

Join 9,000+ other automotive professionals diving into EVs and streamlining their EV sales processes!

Follow Lectrium‘s latest news on LinkedIn

Lectrium

EV knowledge hub

EV ComparisonsTax IncentivesVideo GuidesEV Range CalculatorElectric VehiclesBlog

2024 Lectrium. All Rights Reserved