Buyers of certain used electric vehicles can get a $4,000 tax credit in 2023.
Buyers of certain used electric vehicles can get up to a $4,000 tax credit in 2023. (Photo: Market Watch)
The Best Used EVs that Qualify for the Tax Credit
Two years after the inflation affected the used car market, second-hand car prices are now going down across the board. 2023 will be different as used electric cars are now becoming more attainable. There is a chance for some consumers to take advantage of the recent signing of the Inflation Reduction Act which includes a tax credit of $4,000 for used EVs. It’s essential to understand how credit works it’s essential to understand how credit works.
Starting January 1, 2024, the tax credit will be available at dealerships as said in a post by MSN. It will function as the outgoing federal EV tax credit. For example, you will only get to use 75% of the $4,000 credit on your federal taxes if you owe $3,000 in federal taxes.
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Buyers of certain used electric vehicles can get up to a $4,000 tax credit in 2023. (Photo: Go Power EV)
Guidelines for the Electric Vehicle Tax Credit
Since the government is giving away money, strict guidelines are properly set to dispense the money to eligible recipients. One of which is that individuals must make less than $75,000 yearly to claim the credit. The head of household must make up to $112,500 yearly, and joint filers must make up to $150,000 yearly. Next, the vehicle must be purchased at a dealership and the price must be under $25,000.
For a used car to qualify, it must be at least two years old. The vehicle should be a plug-in hybrid but the battery would have to be at least 7kWh. It’s important to note that if the vehicle is $13,333 or less, the tax credit will only cover 30% of its price. Lastly, the car must be on the list of approved EVs to qualify.
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