Quick Facts About EV Rebates for Tax Prep
- Federal EV tax breaks for new and used electric cars and plug-in hybrids were not instant at the point of sale in 2023 as they are for 2024.
- As a result, new and used buyers must fill out an IRS form for qualifying electric cars to get the rebate.
- The rebate will be refunded after any owed taxes are accounted for on your IRS forms.
Shoppers who purchased qualifying electric vehicles last year did not get the instant rebate. But there’s an Internal Revenue Service form to claim your credit of up to $7,500. Read on to get the top tips about the rebate and how to claim them on your taxes.
6 Things To Know for 2023 EV Rebates
Chances are, you know if you qualify for the tax break. However, if you don’t know or aren’t sure, check your new or used car purchase date and head to the U.S. Department of Energy’s fueleconomy.gov website. See our top things to know below.
- If you bought a new EV or plug-in hybrid before April 18, 2023, a longer list of cars and fuel cell vehicles (California only for fuel cell vehicles) would qualify for the break. After that date, there’s a different list.
- The used EV tax credit in 2023 equals 30% of the sale price, up to a maximum credit of $4,000. Besides fully electric vehicles, plug-in hybrids (PHEVs) and fuel cell vehicles (FCEVs) may qualify. The sale price must be less than $25,000 and purchased at a dealership. It can include delivery charges. Get additional information and requirements in our article: Used Electric Car Tax Credits Explained, and see the IRS checklist for used buyers.
- Before April 18, 2023, shoppers did not need to meet income eligibility requirements for new and used vehicles.
- After April 18, 2023, consumers must meet income eligibility requirements, and new vehicles must meet specific manufacturing and battery requirements. Get the details in our article: How Do Electric Car Tax Credits Work in 2024?
- You must complete the IRS tax form 8936 to obtain any new or used electric vehicle or plug-in hybrid tax credit as part of your 2023 tax return. If you owe money, your taxes will be reduced by the rebate amount.
- You’re out of luck if you leased a vehicle and didn’t get an immediate discount from the dealership. There’s nothing for you to claim.
NOTE: For shoppers who bought an EV or plug-in hybrid on or after Jan. 1, 2024, dealerships can offer instant tax rebates to customers who meet income eligibility restrictions on qualifying vehicles and use them as down payments at the time of purchase. Amounts vary, depending on the car. According to new IRS regulations, tax credits must be initiated and approved at the time of sale. The regulations also say that buyers must obtain a copy of the IRS’ confirmation that the dealer successfully submitted a “time of sale” report. Read more about IRS publication 5900.
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