Used tax credit

4sallypat

Did you buy it from a dealer ?

No need to know who the previous owner since the selling dealer will file the IRS forms.

IRS website:
"Beginning January 1, 2023, if you buy a qualified used electric vehicle (EV) or fuel cell vehicle (FCV) from a licensed dealer for $25,000 or less, you may be eligible for a used clean vehicle tax credit (also referred to as a previously owned clean vehicle credit). The credit equals 30% percent of the sale price up to a maximum credit of $4,000.

The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years.

Purchases made before 2023 don't qualify.

Who Qualifies
You may qualify for a credit for buying a previously owned, qualified plug-in electric vehicle (EV) or fuel cell vehicle (FCV), including cars and light trucks, under Internal Revenue Code Section 25E.

To qualify, you must:

Be an individual who bought the vehicle for use and not for resale
Not be the original owner
Not be claimed as a dependent on another person’s tax return
Not have claimed another used clean vehicle credit in the 3 years before the purchase date

In addition, your modified adjusted gross income (AGI) may not exceed:

$150,000 for married filing jointly or a surviving spouse
$112,500 for heads of households
$75,000 for all other filers

You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your income is below the threshold for 1 of the two years, you can claim the credit.

Qualified Vehicles and Sales
To qualify, a vehicle must meet all of these requirements:

Have a sale price of $25,000 or less
Have a model year at least 2 years earlier than the calendar year when you buy it. For example, a vehicle purchased in 2023 would need a model year of 2021 or older.
Not have already been transferred after August 16, 2022, to a qualified buyer.
Have a gross vehicle weight rating of less than 14,000 pounds
Be an eligible FCV or plug-in EV with a battery capacity of least 7 kilowatt hours
Be for use primarily in the United States"

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DucRider

· #3 · 2 mo ago (Edited)

4sallypat said:
No need to know who the previous owner since the selling dealer will file the IRS forms.

The Dealer is required to give you a report at the time of the sale, and file that same info with the IRS no later than Jan 15th, 2024. If they don't file the required report, the credit will be disallowed

If another sale on this vehicle took place after August 16th, 2022 it may not qualify. If another taxpayer claimed the credit on this vehicle, you cannot (the language actually reads if purchased by a qualified buyer after Aug 16th without specifying that they actually claimed the credit).

Diego said:
Hello everyone I bought a used 2018 Honda clarity the carfax shows two previous owners my question is could I still qualify for the 4000 dls rebate ? How do I find out if the previous owner claimed his?

There is no way for a dealer or consumer to check if another taxpayer will claim for an earlier transaction. The IRS database will never be "real time" to check eligibility of a vehicle.

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Cfbrand3rd

· #4 · 2 mo ago

DucRider said:
The Dealer is required to give you a report at the time of the sale, and file that same info with the IRS no later than Jan 15th, 2024. If they don't file the required report, the credit will be disallowed

If another sale on this vehicle took place after August 16th, 2022 it may not qualify. If another taxpayer claimed the credit on this vehicle, you cannot (the language actually reads if purchased by a qualified buyer after Aug 16th without specifying that they actually claimed the credit).

There is no way for a dealer or consumer to check if another taxpayer will claim for an earlier transaction. The IRS database will never be "real time" to check eligibility of a vehicle.
[/QUOTE

That’s my understanding of it as well. Having said that, the likelihood of someone having purchased that car after it became eligible for the rebate on August 16th, turning around and selling it (in, what about 6 months?), then applying for the rebate seems extremely unlikely.

I just purchased a 2018 Touring last week. I’m unlikely to get the entire $4K rebate, as I won’t have near enough tax liability, but it was my understanding that there was a possibility that they were changing that from a tax credit to, for want of a better term, a grant in that amount. Anyone heard anything about that?

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4sallypat

· #5 · 2 mo ago

Cfbrand3rd said:
That’s my understanding of it as well. Having said that, the likelihood of someone having purchased that car after it became eligible for the rebate on August 16th, turning around and selling it (in, what about 6 months?), then applying for the rebate seems extremely unlikely.

I just purchased a 2018 Touring last week. I’m unlikely to get the entire $4K rebate, as I won’t have near enough tax liability, but it was my understanding that there was a possibility that they were changing that from a tax credit to, for want of a better term, a grant in that amount. Anyone heard anything about that?

The "grant" you are referring to is the 2024 rule where the dealer will front you the credit, assuming you can qualify with enough tax credit.

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EV Nerd

· #6 · 2 mo ago

4sallypat said:
The "grant" you are referring to is the 2024 rule where the dealer will front you the credit, assuming you can qualify with enough tax credit.

Isn't that only for leases?

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Cfbrand3rd

· #7 · 2 mo ago

4sallypat said:
The "grant" you are referring to is the 2024 rule where the dealer will front you the credit, assuming you can qualify with enough tax credit.

I can’t imagine a circumstance where a dealer, even backed by the government, would front a customer $4K in March when that customer’s income & taxation particulars for the next 9 months would be impossible to accurately predict. How would that work? I was an insurance adjuster, doing loss of income claims, and I’ve seen tax returns from people who would get $20K back one year and owe money the next. It just doesn’t seem possible to predict someone’s tax annual tax liability, let alone 3 month into a year…🤷‍♂️

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Cfbrand3rd

· #8 · 2 mo ago

EV Nerd said:
Isn't that only for leases?

When you lease, the leasing company is purchasing the car. I keep hearing there are leasing companies that claim the tax credit and pass it on to the lessee, but that seems a lot more benevolent a move than anything most of the leasing companies I’ve dealt with would ever consider. And I’m not sure how that would work for a leasing company buying a car and claiming the credit when you factor in the new purchaser income limits going into effect…🤔

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4sallypat

· #9 · 2 mo ago

EV Nerd said:
Isn't that only for leases?

Applies to both leases and purchases.

The upfront EV credit that the dealer will apply on the sales contract is an "advance" of the tax credit starting in 2024.

If you don't qualify, you will be left "holding the bag" and owe when you file your taxes as it's a CREDIT - not a rebate - not a deduction......

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EV Nerd

· #10 · 2 mo ago

4sallypat said:
Applies to both leases and purchases.

The upfront EV credit that the dealer will apply on the sales contract is an "advance" of the tax credit starting in 2024.

If you don't qualify, you will be left "holding the bag" and owe when you file your taxes as it's a CREDIT - not a rebate - not a deduction......

I wonder how that's handled IRS document-wise. Does the customer (and the IRS) get a form, somewhat like a 1099?

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4sallypat

· #11 · 2 mo ago

EV Nerd said:
I wonder how that's handled IRS document-wise. Does the customer (and the IRS) get a form, somewhat like a 1099?

The 2024 point of sale (POS) credit that the IRA tax law allows will have the dealer give you the credit up front; but you will probably sign a form acknowledging that you are responsible should the credit not be applied when tax filing comes around.

The dealer will get reimbursed by the IRS for the money they fronted for you, but it will be up to the customer to qualify for the credit.

Should the customer not qualify, the IRS will be asking for the money back.

Tricky potential as some people have tax liability that changes year to year.

I prefer to claim my credit at the end of the year, knowing exactly what I will get back.

Just got my $7500 credit + $350 EVSE installation refunded 2 months ago for my '22 Lightning EV.