Americans who have purchased qualifying used electric cars may be eligible to receive a tax credit known as the Clean Car Credit, offering up to $4,000 in benefits. This tax credit, introduced as of January 1, 2023, aims to incentivize the adoption of environmentally friendly vehicles while providing financial relief to eligible buyers.
Eligibility Criteria
For eligible used electric automobiles acquired for $25,000 or less from certified dealers, Clean Car Credit provides a nonrefundable tax credit of 30% of the vehicle’s purchase price, a maximum of $4,000.
To receive this credit, individuals must complete specific requirements:
- Buyers must use the car, not resale it.
- The buyer cannot be the original vehicle owner.
- Dependents on others’ tax returns are ineligible.
- No used clean car credit claims can be filed within three years before the car’s purchase.
- Modified adjusted gross income (AGI) cannot exceed $150,000 for married filing jointly or surviving spouses, $112,500 for household heads, and $75,000 for others.
Additionally, the vehicle must meet numerous requirements:
- The sale price, including dealer fees, can be at most $25,000.
- The model year must be two years before the purchase.
- A qualified buyer cannot have acquired the car after August 16, 2022.
- Vehicle gross weight should be under 14,000 pounds.
- Ideal for US use, the car must be a Fuel Cell car (FCV) or plug-in Electric Vehicle (EV) with a minimum battery capacity of seven-kilowatt hours.
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How to Claim the Tax Credit
To claim the Clean Car Credit, buyers must fill out Form 8936.
This tax credit provides financial benefits and encourages eco-friendly transportation adoption options, contributing to a sustainable future.
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