Used Tesla Model & GM EVs Now Eligible For $4,000 Tax Credit

You HAVE to buy the used EV or hybrid from a licensed dealer. The tax credit does not work on private party sales.

Is this Federal 4K income tax credit benefit going to be available if I can't purchase the car until 2024? or do I have to buy the car before the 2023 year ends?

Sam, the income stipulations are limits on your personal earnings in 2023. You can't be making more than $150,000 for an individual or $300,000 for a married couple filing jointly to get the credit. The credit is equal to 30% of the sale price up to a maximum credit of $4,000. What this means is that if the used EV that you want is less than $13,333.33, the max you can get off the EV is 30%, which would be less than $4,000. For example if your EV happened to be $10,000, all you would be able to get as a tax credit towards your taxes would be 30% which would be $3,000. If your used EV was sold to you for $20,000 instead of the 30%, which would be a credit of $6,000, the maximum credit that you could take off your Federal taxes would be $4,000. Provided that you owe at least that amount or more on your Federal taxes. 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.
In 2024 the tax credit turns into a discount/rebate at the dealer, but like everything the U.S. Internal Revenue Service (IRS) does, it becomes far more complicated in my opinion. The dealers have to do a lot more paperwork to be able to give the discount/rebate, like having to be registered to do so with the IRS, and on the used EV buyers side you will need to come to the dealer with tax records showing you are eligible for the discount/rebate in terms of income. The IRS puts the burden on you the purchaser to make sure that your dealer is registered and qualified to give the discount/rebate. On its surface the 2024 approach seems easier than the way 2023 does it, but in the end it may be more complicated. Also, income limits drop in 2024. Your Adjusted Gross Income must be if you are single $75,000 or less, head of household $112,500 or less, married and filing jointly $150,000 or less, and if you are married and filing separately $75,000 or less. So if you make more than this you need to jump on buying a used EV this year in 2023 as long as you don't make more than what was stated above for 2023. Remember, there is no lower limit for income only maximum limits of what you can make to get the discount. There is an amount you have to owe in taxes to take full advantage of the tax credit in 2023, once you reach zero taxes with the credit amount that is all you can take.

Does anyone know what's the IRS' definition of sale price? Is it the value of what the car was sold for or is it the price of the car plus tax, fees, dealer addons?

Is $25000 before tax or after taxes and fees? Thank you

So I've been shopping around and noticed a lot of short term EV purchases on qualified vehicles. I wonder if these purchases were just for the tax credit but its ashame that someone burned the tax credit on those vehicles and walked away

Hey Steven jones; obviously richer people thought of it. Used EVs - Nasty. When an EV is exposed to saltwater; they can corrode and catch fire. An ICE car with computers onboard can lose their electronics; but catching on fire is a bit more serious a problem. Any EV which was in Florida during the recent hurricaines may have been exposed to salt water intrusion; so unless you completely know that your prospective used EV wasn't in Florida; you are taking a chance you don't want. That goes or any such exposure. What about salted winter roads? I'm starting to appreciate the old fully analog cars. A person can fix about anything in them; you can't fix chips, especially those out of production; it tends to make your car into a disposable highly planned obsolecence item. What happens when your company doesn't want to do software upgrades on your older vehicle? What happens if the company doesn't like your repair and won't let you charge on their super chargers?

For reference the LFP battery was introduced in the model 3 in the fall of 2021. It’s going to take a few more years of depreciation to qualify for the tax credit.

Putting aside the household income to get this credit. If used EV market is good and large portion of people think EVs are the environmental solution, why are government incentives necessary? I think reports of high depreciation and sluggish sales of EVs are real with some exceptions. Reports of automakers financial problems are also real. Incentives are essentially sugar coating the economic EV issues. EV are great technology, but the batteries remain a big negative factor.

i think used EVs for less than 25,000 is very slim. do you want a bolt or a leaf?

A tax credit means little if you don't pay much in taxes.

Get a JOB

It's better to get a new one.

$65k is the 46 percentile and $150k is the 80 percentile. In other words, 46% of US families make less than $65k per year and 80% make less than $150k. That means only 34% of US housholds can fully benefit from this.

It only brings down the price of a used Ev one to one proportional to the federal taxes you owe in the the year you buy it. If you only owe $2000 in taxes that’s the max discount you get.

I knew about this discount months ago. But the dealers don't know anything about it.

I sure hope at tax time i get the credits. Very poorly communicated by the IRS.

It is 30% so i bought one at 10K and the other at 13K.

I figured if i need a replacement battery it will help.

Lithium iron phosphate, batteries charge 100%, from empty to full. Many other batteries charge 60%, 20 to 80% or they degrade. So a bigger battery for more years for the same money.

Bought a 2015 Chevy Spark EV for ~$9,000. Love it. Range is not good (19 kWh battery) and needed new tires, but that's about it. We charge it with the Level 1 charger over night and it works great for around town. We will get the rebate at tax time which is 30% (max $4,000) or $2,700 which brings the initial cost of the vehicle to ~$6,300.

The leaf required almost no servicing, but new BEVs do, Why? income for dealers IMHO. Hence when an Atto3 is the same capital cost as a Model3, the model3 which needs no servicing is the better car and the better buy. Also a big bonus for a Tesla purchase, no dealing with assh*le dealers.

It is hilarious that you think $65,000 is low income. LOL. That is a good income in the US for working class guppies. What is worse is that rich people keep making laws and rules based on their want as apposed to data driven facts about income and ability to pay and the poor get no say over their situations. Do people who make less than $120000 a year need used car incentives sure. But poor and working class need 10X that help.

How much does it cost to have a Tesla repaired? How much is the average cost of repairs? How much repair can an owner do on their own? What is parts availability? Compare to a GM or a ford ICE repair over 8 years. if it costs $24000 for a new battery after a flood or an accident the insurance will just total it out for less than the cost of a battery and your screwed. They do it with ICE cars and houses. Give us numbers.

There are other important rules for the credit, like it being 30% of the sale price up to $4000 credit, up to your taxes that year (i.e., not a refundable tax credit), no carry forward. I'd recommend reading the IRS web page on Used Clean Vehicle Credit if interested in it.

I wouldn't buy a 5 year old laptop, so I am definitely not going to spend $10,000s on a 5 year old electric car.

So people who earn less than $50K get less help than those earning $69K ? Who came up with that idea ?

Where can you sell a used BEV for the price of a new one ? It ain't the UK, that is for sure 🤣🤣🤣

I don't know why the rest of the worlds thinks that the average person in the US makes that much in a year. The numbers that you are putting out there for income is many times higher than the average person here. I can only guess that people are looking at management type of people and CEOs. I have talked to many people around me and almost everyone I know only earns up to $25,000.00 a year with a number of us are lucky to make $20,000.00 a year. This is why we need a much less expensive electric vehicle in the US. Of course the retired people make even lees that $20,000.00 a year. I am thinking you need to do a little research into this.

so this is the government giving money to used car dealers as an incentive to sell ev's

Cheers Sam

Hello mate

nice