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Which Electric Cars Are Still Eligible for the $7,500 Federal Tax Credit?

ev-full-tax-credit.jpg Cars.com illustration by Paul Dolan

Editor’s note: This story was updated Jan. 25, 2024, to reflect new restrictions on eligible vehicles.

If you’re shopping for or researching an electric vehicle in 2024, you’ve probably heard that significant changes in the federal tax credit of up to $7,500 for EVs and plug-in hybrids took effect Jan. 1. The EV tax credit was overhauled in 2022 with new rules for buyer eligibility as well as battery sourcing. The complex battery requirements — aimed to lessen dependence on foreign sourcing of battery components and materials — tighten each year over the 10-year program. That means the list of qualifying vehicles will frequently change as automakers scramble to update vehicles to comply.

Related: What Does the EV Tax Credit Overhaul Mean for Car Shoppers?

The more positive news for 2024, however, is that new-car buyers can choose to get the credit at the time of purchase to reduce the price on the spot. Meanwhile, the credit for used EVs continues, with a similar new option to claim it at purchase, and leasing continues to be an alternative for higher-income buyers and for vehicles not on the purchase credit list.

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Which EVs and PHEVs Are Eligible for a Federal Tax Credit?

The tightened rules for 2024 cut the number of new EVs and PHEVs that qualify for the credit by more than half on Jan. 1, and more vehicles will join the list throughout the year as automakers change battery sourcing. Because the rules for 2024 were issued very late in 2023, some automakers still were figuring out which of their vehicles will continue to be eligible — including some from Ford, Nissan, GM and Tesla. In some cases, versions of the same vehicle — such as a regular or long-range variant — may or may not qualify based on differing batteries.

Here are the vehicles currently listed by the EPA as eligible for the new-car tax credit of up to $7,500. This list will be continuously updated (you have to select the year of delivery in the drop down to get the list). The amount of the credit listed is based on the battery size and sourcing. The list also notes the sticker price cap that applies to the specific vehicle. Not all vehicles listed are from the current model year, but they still qualify for the credit if they were never sold before and are delivered to a buyer in 2024.

As noted in the EPA’s list, because a vehicle might be assembled in more than one location and different versions might have different batteries, you also need to check the vehicle identification number of the specific vehicle you want to buy to verify its eligibility. The Department of Energy provides a VIN check tool here.

Model Year/Vehicle Credit Available Retail Price Cap
2022-23 Chevrolet Bolt EV $7,500 $55,000
2022-23 Chevrolet Bolt EUV EV $7,500 $55,000
2022-24 Chrysler Pacifica PHEV $7,500 $80,000
2022-24 Ford Escape PHEV $3,750 $80,000
2022-24 Ford F-150 Lightning EV $7,500 $80,000
2022-24 Jeep Grand Cherokee 4xe PHEV $3,750 $80,000
2022-24 Jeep Wrangler 4xe PHEV $3,750 $80,000
2022-24 Lincoln Corsair Grand Touring PHEV $3,750 $80,000
2023-24 Rivian R1S EV $3,750 $80,000
2023-24 Rivian R1T EV $3,750 $80,000
2023-24 Tesla Model 3 Performance EV $7,500 $55,000
2023-24 Tesla Model X EV $7,500 $80,000
2023-24 Tesla Model Y EV $7,500 $80,000
2023-24 Volkswagen ID.4 EV $7,500 $80,000
rivian-r1s-exterior-rear-angle-oem 2022 Rivian R1S | Manufacturer image

How Did This Get So Complicated?

The 2022 law revised the tax credit for new EVs and PHEVs bought by individuals for personal use. It split the credit in two, with $3,750 awarded for a vehicle’s battery component production and another $3,750 for meeting materials sourcing rules. If an EV meets both, it gets the full $7,500 credit; if it meets just one, the credit is $3,750.

A requirement that vehicles be assembled in North America took effect in 2022. On Jan. 1, 2023, the minimum battery size became 7 kilowatt-hours and price caps were set at $55,000 for cars, wagons and hatchbacks and $80,000 for SUVs, vans and light trucks. The price for the caps is the vehicle’s total MSRP, including factory options; it does not include the destination charges, dealer-installed options, taxes and fees. Also, income limits were set for buyers.

In April 2023, the rules began to require minimums on battery component production and sourcing of key battery materials (so-called “critical minerals”) from here or from countries with which the U.S. has free-trade agreements and not from a “foreign entity of concern” (mainly China and a few other countries). The minimums increase each year.

What Are the Buyer Income Caps for the New Vehicle Credit?

Unchanged for 2024 are the limits on how well off you can be to still claim the new-car credit. To qualify, your household income (the “adjusted gross income” on line 11 of your tax return, IRS Form 1040) must be no more than $300,000 for joint filers, $225,000 for heads of households and $150,000 for individuals. The income limit is based on your income in the year you get the vehicle or in the previous year, whichever is lower.

ford-f-150_lightning-lariat-exterior-front-angle-oem 2023 Ford F-150 Lightning | Manufacturer image

How Do I Get the Tax Credit for New EVs?

As of Jan. 1, 2024, you have two ways to get the EV tax credit on a new-vehicle purchase. Note that if you ordered a vehicle in 2023 but take delivery of it in 2024, the new rules apply.

The brand-new option in 2024 allows new-car buyers to claim the full credit at the time of purchase. In IRS parlance, you “transfer” or sign over the credit to an IRS-registered dealer; the dealer then gives you that amount in cash or applies it to the cost of the vehicle.

An important sweetener for that option is that as long as you meet the income requirements, the latest IRS guidance says that you can get the full credit at purchase regardless of how much you’ll owe in taxes. However, you still must meet the income limits; otherwise, you’ll have to pay the credit back to the IRS.

Still available — and the only option for those who bought EVs in 2023 — is claiming the credit later with your tax return on IRS Form 8936. If you do this, you can’t get more in credit than the total tax bill you owe (in IRS parlance, the credit is not “refundable”). If the vehicle qualifies for a $7,500 credit but you only owe $4,000 in federal taxes for the year, you’ll “lose” the excess $3,500 you didn’t need.

How much do you need to make to owe $7,500? For tax-year 2024, barring changes in tax law, the incomes needed for a $7,500 tax bill should be close to those for 2023. According to the IRS 2023 Tax Table, to owe $7,500, you’d need a taxable income (IRS Form 1040, line 15) of at least $55,400 as a single filer, $62,700 for a head of household and $66,150 for joint filers. But your situation and deductions could mean you’d need a substantially higher income to owe $7,500.

What Is the Credit for Used EVs?

New for 2023 was a first-ever credit of up to $4,000 for buying a qualifying used EV from a dealer, and now in 2024, used-car buyers can choose to get the credit at the time of purchase. As with new vehicles, you “transfer” or sign over the credit to a registered dealer and the dealer will give you that amount in cash or apply it to the cost of the vehicle; you also get the full credit at purchase regardless of how much you’ll owe in taxes later. But if you exceed the income limits — which are lower for the used credit — you would have to pay back the credit to the IRS. If you claim the credit when you file your taxes (the only option for 2023 buyers), the credit is limited to what you owe in taxes.

The used-car credit is for up to $4,000 or 30% of the sale price, whichever is lower. Additionally, the used vehicle’s sale price must be $25,000 or less, and it must be at least two model years old. Additionally, the buyer’s adjusted gross income is limited to $75,000 for individuals, $150,000 for a joint return and $112,000 for heads of households.

The EPA has a lengthy list of qualifying used EVs and PHEVs here. Find used EVs for sale in our inventory.

2021 Jeep Wrangler 4xe off-roading in desert 2021 Jeep Wrangler 4xe | Manufacturer image

Can I Lease a New EV and Get the Federal Credit?

Not directly. But leased EVs qualify for a separate EV credit program that provides a $7,500 “commercial credit” for light-duty vehicles acquired by businesses — including leasing companies. The leasing company, which is the buyer of the vehicle, gets the credit and then could pass the value of the credit to you in the form of a lower lease payment. That’s not required and you have to make sure you get it, but many automakers are promoting this.

The major advantage of the commercial credit — called the “leasing loophole” by critics — is that it has far fewer rules: Unlike the purchase credit, there are no limits on the lease customer’s income or on the vehicle’s price. The lease customer can also pick from a wider selection of EVs since the commercial credit does not have the complex battery rules or requirement that the vehicle be built in North America.

How Many Credits Can I Get in a Year?

If you choose to transfer the credits to the dealer, you are limited to two credits per taxpayer per year. Under IRS rules, credits are issued in the name of one taxpayer only even if the vehicle will be jointly titled, so spouses could transfer up to four credits per year.

Those transfers could include a used-vehicle credit, but the limits are stricter for used vehicles. Each taxpayer is limited to one credit for a used EV or PHEV in any three-year period.

Are There Other EV Tax Credits?

Many states and cities have their own tax incentives for new and even used EVs and PHEVs, and the Department of Energy has a list by state here. The rules for vehicles and buyers vary, but many states have fewer restrictions than the federal program. Many offer subsidies for home charging equipment, as well.

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