You can still take advantage of the Clean Vehicle Credit for the 2024 tax year, but we’re keeping a close watch on any changes that could occur for 2025 and beyond.
Amid turmoil about electric vehicles (EVs), it’s fair to wonder about the status of the Clean Vehicle Credit. Former President Joe Biden aimed to recommit the US to combating climate change through various executive orders (EOs) and the Inflation Reduction Act of 2022, which changed the Clean Vehicle Credit rules for vehicles purchased between 2023 and 2032 (you can find the rules for previous years here). President Donald Trump also signed various EOs related to EVs, including one called “Unleashing American Energy», which eliminated what it referred to as the “EV mandate.” Here’s all the background on those actions.
So, where does that leave EV owners (or prospective buyers)? After all, EVs continue to rise in popularity. Kelley Blue Book says that electric vehicle sales reached a record 1.3 million in 2024, marking a 7.3% increase from the previous year. CNBC reports that EVs accounted for a record 20% of US vehicle sales in 2024.
As of this writing, the Clean Vehicle Credit is still part of the IRS tax code. But, as of 2024, «any credits must be initiated and approved at the time of sale.» As such, you need to obtain a copy of the IRS’s confirmation that your dealer successfully submitted a “time-of-sale” report. Whether you transferred whatever credit you are eligible for at the time of sale or are waiting to claim the credit when you file your taxes, you must report everything on Form 8936 the same tax year in which you took delivery. Keep in mind that you might need to repay a portion of this credit if you claim it at the time of purchase and exceed income requirements.
Below, we cover all the eligibility requirements for the Clean Vehicle Credit and explain how tax software can help you file these details correctly. We’ll update this story if anything changes.Which Electric Vehicles Qualify for the Clean Vehicle Credit?
Before we get into specifics, know that Clean Vehicle Credit ranges from $2,500 to $7,500, depending on the factors and requirements the Inflation Reduction Act of 2022 specifies. You can check if a vehicle you purchased in 2024 is eligible from the IRS site based on the delivery date. Or, if you are thinking about buying an EV in 2025, we have an up-to-date list of eligible vehicles.
To quality, a new plug-in electric vehicle must first meet a set of basic requirements. It must:
Be a product of a qualified manufacturer
Have a battery capacity of at least 7 kilowatt hours
Have a gross vehicle weight rating of less than 14,000 pounds
Undergo final assembly in North America
There are also limitations on a vehicle manufacturer’s suggested retail price (MSRP).
