Save Big on Used Electric Vehicles: How to Qualify for The 2024 $4,000 EV & Plug-In Hybrid Tax Credit

Posted Wednesday, Sep 04, 2024

Used Cars for Sale in Lincoln, NE

 

If you’ve been thinking about buying an electric vehicle (EV) or a plug-in hybrid, now might be the perfect time. With up to $4,000 in savings available on select used EVs and historically low prices, the opportunity is too good to miss. However, understanding how to take advantage of this deal is crucial. Here’s what you need to know about qualifying for this significant savings.

Who Qualifies for the $4,000 EV Credit?

To benefit from the $4,000 credit, you can’t just buy any EV from any seller. The purchase must be made through a licensed dealer who is registered with the IRS as a qualifying clean vehicle dealer. This means that buying an EV from a private seller or through an online marketplace won’t make you eligible for the credit.

Only a small percentage of dealerships are registered to offer this credit, so it's important to ensure the dealer you’re working with meets the necessary requirements. Here’s what dealers must provide to the IRS for the sale to qualify:

  • Vehicle Identification Number (VIN): The specific VIN of the qualifying vehicle.
  • Social Security Number (SSN): The buyer’s SSN.
  • Battery Kilowatt Rating: Verification that the battery’s capacity is over 7.5 kilowatts.
  • Driver’s License: A copy of the buyer’s driver's license, both front and back.

Once these details are verified, the buyer will receive IRS Form 8936, which is needed when filing taxes for 2024. It’s important to work with a CPA or tax preparer to ensure you don’t exceed clean energy credit limits, as the IRS will want the $4,000 back if you do.

How to Claim Your EV Credit

Claiming the EV credit can be straightforward if you follow the correct process. At the time of purchase, the dealer will use the IRS energy credits website to determine your eligibility and the exact amount of the credit. This is done in real-time, and the dealer is required to provide you with a copy of the time of sale report.

Once your vehicle qualifies for the credit, you have two options:

  • Claim the Credit on Your Tax Return: Use Form 8936 to claim the credit on your tax return for the year of purchase.
  • Transfer the Credit to the Dealer: You can transfer your credit to the dealer, allowing them to apply the credit amount to your final purchase costs. This way, you receive the benefit of the credit immediately, while the dealer is later reimbursed by the IRS. You will still need to complete Form 8936 to report your eligibility and decision to transfer the credit.

Important Considerations

Even if your vehicle qualifies for the credit, you must ensure that you, as the buyer, meet all eligibility requirements. If the IRS determines that you did not qualify for the credit, you may need to reimburse any difference between the credit you were eligible for and the benefit you received at the time of purchase.

Keep in mind that while dealers are responsible for providing information on the vehicle, they are not required to verify the buyer’s eligibility for the credit. It’s your responsibility to ensure you qualify.

Ready to Take Advantage of This Opportunity?

At PricedRite Auto, we’re a qualified dealership registered to offer this EV credit. We’re here to help you navigate this exciting opportunity and save money on your next vehicle purchase. Want to see our qualifying inventory? Click the button below to start shopping today!

Still have questions? Check out more of our videos or give us a call. We’re here to help you every step of the way. Thanks for reading!