The 3 Best Tools to Calculate Your EV Tax Credits

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Before you buy an electric vehicle, make sure you can qualify for EV tax credits. These three great tools make it easy to calculate EV tax credits. [[{“value”:”

Are you in the market to buy a car in 2024? Buying an electric vehicle could be a good way to cut your costs of car ownership — especially if you qualify for EV tax credits. Understanding the rules and limits of EV tax credits can help you save money.

Fortunately, there are a few good tools to calculate EV tax credits. Let’s look at a few of the best resources.

1. IRS website (understand the rules and income limits)

Not everyone is eligible for EV tax credits. There are limits based on which electric vehicle you buy and your income. So before you go car shopping, start with the IRS website to make sure your income is within the accepted range to get EV tax credits (which the IRS calls “Clean Vehicle Tax Credits”).

To qualify for an electric vehicle tax credit, your income has to be below a certain amount. And that amount is different based on whether you’re buying a new EV or a used EV.

According to the IRS website on Clean Vehicle Tax Credits, here are the income limits for people to qualify for EV tax credits.

New EVs (tax credit up to $7,500)

To qualify for the new electric vehicle tax credit, your modified adjusted gross income (AGI) must be $150,000 or less for single filers, or $300,000 or less for married couples filing jointly. Unless you’re a pretty high earner, you likely won’t have to worry about missing out on EV tax credits because of your income.

Used EVs (tax credit up to $4,000)

Income limits for the used EV tax credit are significantly lower. To qualify for a tax credit of 30% of the sale price (up to $4,000) on a pre-owned EV, your modified AGI must be $75,000 or less for single filers, or $150,000 for married couples filing jointly.

What if you buy an EV in 2024 and get an EV tax credit at the car dealership, but your 2024 income ends up being too high to qualify for the tax credits? In that case, you may have to repay the IRS when you file taxes next year. If your income is close to the limit to qualify, use tax planning strategies to maximize your tax deductions in 2024, so you can keep that EV tax credit money.

2. FuelEconomy.gov

Once you know the income limits for EV tax credits, go to another helpful federal government website: FuelEconomy.gov. This site has a good explanation of which electric vehicles (and plug-in hybrid electric vehicles, or PHEVs) qualify for EV tax credits in 2024.

Here are the specific instructions for how to use FuelEconomy.gov to get EV tax credit information, depending on whether you’re shopping for a new or used EV.

How to find tax credits for new EVs

Go to this page on FuelEconomy.gov: Federal Tax Credits for Plug-in Electric and Fuel Cell Electric Vehicles Purchased in 2023 or AfterScroll down to the section that says “Search for Eligible Vehicles,” and click the dropdown menu to choose your vehicle delivery date (presumably 2024, unless you are traveling back in time.)This search tool will show you a complete listing of electric vehicle makes and models that are eligible for up to $7,500 of new EV tax credits.You can click a button to search for all-electric vehicles (EVs) or plug-in hybrid electric vehicles (PHEVs), which can also qualify for EV tax credits.

How to find tax credits for used EVs

Go to this page on FuelEconomy.gov: Federal Tax Credits for Pre-owned Plug-in Electric and Fuel Cell VehiclesScroll down to the section that says “Filter table by…” and choose the year, make, and/or model that you want to search for. To get a used EV tax credit, the pre-owned EV must be at least two years older than the current year (so that means model year 2022 or older, for car buyers in 2024).You can search for all-electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs), or even fuel cell vehicles (FCVs).This page also has a used EV tax credit calculator, where you can enter the sale price of your desired vehicle and see how much tax credit you’d get. Used EVs must have a sale price of $25,000 or less to qualify for the tax credit.

Both of these helpful tools on FuelEconomy.gov should give you a clear understanding of which vehicles qualify for what amounts of EV tax credit. This will help you start car shopping with confidence.

3. Cars.com (or other car-shopping websites)

Have you zeroed in on the EV of your dreams? Are you certain that it will qualify for EV tax credits, based on FuelEconomy.gov? If so, it’s time to start shopping for cars. Cars.com is a helpful resource to quickly search for new or used vehicles in your immediate area, nearby region, or nationwide.

For example, I used Cars.com to quickly find several used Volkswagen ID.4 Pro electric vehicles, priced at $25,000 or less, that would qualify for pre-owned EV tax credits of up to $4,000. This could be a great time to get a $4,000 discount on a used EV that still has good mileage left on its battery warranty.

Bottom line

Before you buy an electric vehicle, check for EV car insurance company price quotes. Car insurance for EVs can be more expensive than gas-powered cars. But if you can handle the cost of insurance, and you’re prepared to charge your EV at home or nearby charging stations, EV tax credits can reduce your cost of car ownership.

Our best car insurance companies for 2024

Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we’ve researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.

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