January 1, 2023 marked the dawn of another year for the world, but in the realm of EVs, more specifically purchases made by US consumers, the date kicked off a fresh start of new tax credits for vehicles both new and used. While much of the dust is still settling on the Capitol as it works to implement new qualifying terms for tax credits, we do have some information about what used EVs will and will not qualify. Here’s what we know so far.
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A used EV might be the way to go in 2023
Although the $7,500 federal tax credit has been extended for new EV purchases under revised qualifying terms, those current requirements leave a very limited the number of current EVs that qualify.
Many automakers are already pivoting their business strategies to move EV and battery assembly to US soil to once again qualify, but it will take time to establish those facilities and get them up and running.
In the meantime, it might be worth considering a used EV in order to take advantage of the revamped federal tax credit up to $4,000. Here’s how it works.
How the current tax credit works for used EVs
In a perfect world for consumers, any and all used EV purchases would qualify for tax credits from the US government, but that’s unfortunately not the case. As part of revised terms in the Inflation Reduction Act signed by President Biden, federal tax credits have been extended and include revamped benefits for used EV purchases. As long as they fit certain criteria. Per the IRS:
Beginning January 1, 2023, if you buy a qualified previously owned electric vehicle (EV) or fuel cell vehicle (FCV) from a licensed dealer for $25,000 or less, you may be eligible for a previously owned clean vehicle tax credit under Internal Revenue Code Section 25E.
Used EVs no see revised terms that offers a credit equal to 30% percent of the sale price (up to $4,000). That should help consumers like yourselves get some change back in your pocket at the end of the fiscal year. As long as you stick to these terms as outlined by the IRS.
To qualify as a customer, you must:
- Be an individual who bought the vehicle for use and not for resale
- Must be an individual (no businesses)
- 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 EV purchase date
- Modified adjusted gross income must not exceed $75k for individuals, $112,500 for heads of households, and $150k for joint returns
Additionally, in order for used EV to qualify for federal tax credits, it must:
- 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 (kWh)
- Be for use primarily in the United States
- Purchased from a certified dealer:
- For qualified used EVs, the dealer reports required information to you at the time of sale and to the IRS
- A used vehicle qualifies for tax credit only once in its lifetime
Here are all the Used EVs that qualify for tax credits
As promised, here is the current list of used EVs that qualify for tax credits in the US, per the IRS, separated by all-electric BEVs and plug-in hybrids (PHEVs).
It’s important to note that this is not the end all, be all list of used EVs that qualify for tax credits in the US. Once again, per the IRS:
Manufacturers of the vehicles listed below have provided appropriate information and have indicated that the vehicles are eligible for the credit provided other requirements are met.
This is simply the list provided by the government which will be continually updated by both them and us. Additionally, some of these EVs especially are 2020 or 2021 models, and it will be nearly impossible to find them on sale below $25k. If you do somehow luck out, more power to you, because you may qualify for additional savings.
As always, we recommend speaking with a tax professional and EV dealer directly in order to ensure what you and your new vehicle qualify for. Without further adieu, here are the all-electric models that currently qualify:
|Make/Model/Year(s)||Full Tax Credit|
|Audi e-tron (2019, 2021, 2022)||$4,000|
|Audi e-tron S Standard/Sportback (2022)||$4,000|
|Audi e-tron GT/RS GT (2022-2023)||$4,000|
|Audi e-tron Sportback (2020-2021)||$4,000|
|Audi Q4 50 e-tron Quattro Standard/Sportback (2022)||$4,000|
|i3 (with or without range extender) (2014-2021)||$4,000|
|i3 (60Ah) (2017)||$4,000|
|i3s (with or without range extender) (2018-2021)||$4,000|
|Bolt EV (2017-2021)||$4,000|
|Spark EV (2014-2016)||$4,000|
|FORD MOTOR COMPANY|
|Focus Electric (2012-2018)||$4,000|
|Mustang Mach-E (2021)||$4,000|
|Ioniq BEV (2017-2019)||$4,000|
|Kona Electric (2019-2021)||$4,000|
|B250e (B-Class) (2014-2017)||$4,000|
|Cooper S E Hardtop (2020-2021)||$4,000|
|i-MiEV (2012-2014, 2016-2017)||$4,000|
|LEAF S (2013-2021)||$4,000|
|LEAF S Plus (2019-2021)||$4,000|
|LEAF SL (2011-2019)||$4,000|
|LEAF SL Plus (2019-2021)||$4,000|
|LEAF SV (2011-2021)||$4,000|
|LEAF SV Plus (2019-2021)||$4,000|
|Taycan (all models) (2020-2021)||$4,000|
|Coupe EV (2013-2018)||$4,000|
|EQ Fortwo Coupe (2019)||$4,000|
|Cabrio EV (2013-2016, 2017-2018)||$4,000|
|EQ Fortwo Cabrio (2019)||$4,000|
|RAV4 EV (2012-2014)||$4,000|
|ID.4 First Edition, Pro, Pro S, AWD Pro, AWD Pro S (2021)||$4,000|
|XC40 Recharge (2021)||$4,000|
Used plug-in hybrids EVs that qualify for tax credits
|Make/Model/Year(s)||Full Tax Credit|
|A3 e-tron/ultra (2016-2018)||$4,000|
|Audi A7 55 TFSI e Quattro (2021)||$4,000|
|Audi A7 TFSI e Quattro (2022)||$4,000|
|Audi A8L PHEV (2020)||$4,000|
|Audi A8L 60 TFSI e Quattro (2021)||$4,000|
|Audi Q5 PHEV (2020)||$4,000|
|Audi Q5 55 TFSI e Quattro (2021)||$4,000|
|Bentayga Hybrid SUV (2020-2021)||$4,000|
|i8 Coupe/Roadster (2019-2020)||$4,000|
|330e xDrive (2021)||$4,000|
|740e xDrive (2018-2021)||$4,000|
|X3 xDrive30e (2020-2021)||$4,000|
|X5 xDrive40e (2016-2018)||$4,000|
|X5 xDrive45e (2021)||$4,000|
|Pacifica PHEV (2017-2021)||$4,000|
|FORD MOTOR COMPANY|
|C-Max Energi (2013-2017)||$4,000|
|Escape Plug-In Hybrid (2020-2021)||$4,000|
|Fusion Energi (2013-2020)||$4,000|
|GENERAL MOTORS (GM)||TBD|
|Clarity Plug-in Hybrid (2018-2021)||$4,000|
|Ioniq PHEV (2018-2021)||$4,000|
|Sonata PHEV (2016-2019)||$4,000|
|Wrangler 4xe (2021)||$4,000|
|Aviator Grand Touring (2020-2021)||$4,000|
|Corsair Grand Touring (2020-2021)||$4,000|
|GLE550e 4M (2016-2018)||$4,000|
|GLC350e 4M (2018-2020)||$4,000|
|Cooper S E Countryman ALL4 (2018-2021)||$4,000|
|Outlander PHEV (2018-2021)||$4,000|
|Cayenne E-Hybrid (all models) (2015-2021)||$4,000|
|Panamera E-Hybrid (all models) (2014-2021)||$4,000|
|Crosstrek Hybrid (2019-2021)||$4,000|
|Prius Prime PHEV (2017-2021)||$4,000|
|RAV4 PHEV (2021)||$4,000|
|S60 T8 (2019-2021)||$4,000|
|XC90 Excellence (2018-2019)||$4,000|
Other resources for EV tax credits
While tax credits for used EVs are newly revamped and may be the way to go for you personally, there are plenty of other options to get money back from Uncle Sam at the end of the fiscal year.
For instance, revised terms outlined in the Inflation Reduction Act went into affect January 1, 2023 and enable the extension of federal tax credits for new EV purchases through the next decade, while once again allowing EVs from American automakers like Tesla and GM to once again qualify.
That being said, the capitol is still trying to settle a lot of these terms to determine what vehicles qualify, so things are a bit cloudy at the moment, but you may be able to take advantage of tax credits before battery assembly requirements kick in later this year.
Learn more about federal tax credits for new EV purchases here.
Top comment by Jacob Larsen
There absolutely needs to be a VIN lookup to see if a vehicle 1) qualifies and 2) has had its credit used once per lifetime. Federal govt needs to put up a simple consumer facing web page that dealer and customer will use at purchase to ensure no surprises.
Whether it’s a new or used EV purchase that ends up being right for you, you may still be able to take advantage of additional perks at the state level, depending where you live. Credits, exemptions, and other benefits could be available for an EV purchase, lease, or for relevant equipment like home charger installation.
You can check out what EV-centric benefits may be available to you, sorted by state, here.
We’d like to reiterate once last time that we recommend doing your own research and speaking with a tax professional and EV dealer directly in order to ensure exactly what you and your vehicle purchase qualify for.
Good luck in EV your search!
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