Starting January 1, 2024, buyers of new and used electric (EV), plug-in hybrid (PHEV) and fuel cell vehicles may be able to transfer the Clean Vehicle Credit to a car dealer in exchange for a lower price. These new tax credit rules will make clean vehicles affordable for a wider range of taxpayers, who previously had to wait until the next tax filing season to get the benefit of the credit.

The amount of the Clean Vehicle Credit depends on a variety of factors, including battery size and the origin of critical components. The maximum credit is $4,000 for used vehicles and $7,500 for new vehicles. You can find a complete list of EVs, PHEVs and fuel cell vehicles that qualify for the credit at the U.S. Dept. of Energy website (link below). If you transfer a Clean Vehicle Credit to a dealer, the dealer must provide a financial benefit equal to the credit amount, such as a price reduction.

For both new and used vehicles, the Clean Vehicle Credit is subject to income limits. A tax professional can help you determine whether you qualify for the credit, and what the credit amount might be for a particular vehicle.

Search for Eligible Clean Vehicles: https://fueleconomy.gov/feg/tax2023.shtml