Here’s every electric vehicle that currently qualifies for the US federal tax credit
As sales of electric vehicles continue to surge, many new and prospective customers have questions about qualifying for federal tax credit on electric vehicles.
Whether you qualify is not a simple yes or no question… well, actually it sort of is, but the amount you may qualify for varies by household due to a number of different factors. Furthermore, there are other potential savings available to you that you might not even know about yet.
Truthfully, this information is out there in the internet ether, but only available by piecemeal and thorough searching. Luckily, we have compiled everything you need to know about tax credits for your new or current electric vehicle into one place.
The goal is to help ensure you are receiving the maximum value on your carbon-conscious investment because, let’s face it, you’ve gone green and you deserve it.
How does a federal tax credit work for my EV?
The idea in theory is quite simple — “All electric and plug-in hybrid vehicles that were purchased new in or after 2010 may be eligible for a federal income tax credit of up to $7,500,” according to the US Department of Energy.
With that said, you cannot simply go out and buy an electric vehicle and expect Uncle Sam to cut $7,500 off your taxes in April. In reality, the amount you qualify for is based on both your income tax as well as the size of the electric battery in the vehicle you own. Here’s how it works.
How much is the federal tax credit?
First and foremost, it’s important to understand three little words the government slips in front of the $7,500 credit – “may” and “up to.” As in, you may qualify for up to $7,500 in federal tax credit for your electric vehicle. At first glance, this credit may sound like a simple flat rate, but that is unfortunately not the case.
For example, if you owned a Nissan LEAF and owed say, $3,500 in income tax this year, then that is the federal tax credit you would receive. If you owed $10,000 in federal income tax, then you would qualify for the full $7,500 credit.
It’s important to note that any unused portion of the $7,500 is not available as a refund, nor as a credit for next year’s taxes. Bummer.
Other federal tax credit rules to note as an electric vehicle owner
Hopefully you now understand how the government determines its tax credits for individuals based on your federal income tax and vehicle, but it’s important to stay aware of additional fine print. This is the US government, after all.
First, understand that these federal tax credits will not last forever, and they may have already expired for your vehicle. As the demand for electric vehicles increases, sales push certain manufacturers over the predetermined threshold of qualified sales… at least for now.
This includes US automakers like Tesla, who topped over 200,000 qualified plug-in electrics sold a few years ago, and as a result no longer qualifies for any federal tax credit. Fear not, Tesla owners, there are still ways to save money on your EV purchase! See the “tax incentives for Tesla buyers” section below.
Another important rule to keep in mind is that the federal tax credit cannot be passed on. This credit applies to the original registered owner only. That means any used EVs you already have or are going to purchase are already disqualified.
Same rules apply to any lease on an electric vehicle as well. In this case, the tax credit goes to the manufacturer that’s offering the lease to you. However, an automaker might be willing to apply the tax credit into the cost of your lease to help lower your payments, but that’s not guaranteed. It’s definitely worth an ask!
Can a household receive multiple Federal tax credits?
Several readers have reached out and asked if they qualify for multiple tax breaks if they purchase more than one EV in a calendar year. Well, the short answer is yes.
However, we must preface this by relaying that the IRS is the official source for all Federal tax information and responsible for administering the Federal plug-in vehicle tax credits. It is best to consult with a qualified tax professional to make sure you do in fact qualify before purchasing multiple electric vehicles.
That being said, the fueleconomy.gov team was not aware of any limitations on the number of vehicles you may claim tax credits for provided that you have enough Federal tax burden for that purchase year.
So, if two people in your household each purchase an eligible vehicle and both have $7,500 in Federal tax burden, then each should be able to claim the tax credit.
If a single person purchases two eligible plug-in electric vehicles with tax credits up to $7,500 for each vehicle, they should be able to claim $15,000 in tax credits if their Federal tax burden is $15,000 or more for the calendar year in which they purchased those vehicles.
Again, speak with a tax professional or the IRS to be extra sure this is possible.
The Biden administration looks to expand electric vehicles
President Biden has been busy during his short tenure at President of the United States. First he vowed to make the nation’s entire federal fleet all electric. Well that hasn’t quite gone to plan yet. However, the White House has already introduced two bills to expand EV adoption, one of which was just recently signed by the President and includes funding for heavily expanded EV charging infrastructure.
Previously, there were rumors that this federal tax credit will be increased to $10,000. In President Biden’s recent $174 billion investment plan for electrification, the tax credit was quickly mentioned a reform. The summary remained vague about the reform – only confirming that it will not only take the form of tax rebates but also “point of sale rebates” and it will now be for “American-made EVs.”
The second and larger bill currently sill sits in Congress contain’s Biden’s “Build Back Better Act” and subsequent increases to the federal tax credit. Here’s where it currently stands.
Status of the $12,500 federal tax credit for EVs
When the aforementioned $1.2 trillion infrastructure bill was passed in early November, House Speaker Nancy Pelosi had planned to also vote on the $1.75 trillion “Build Back Better Act” and the $12,500 federal EV tax credit within it.
However, a small group of moderates in the House refused to support the legislation without a cost estimate from the Congressional Budget Office (CBO). As a compromise, the House approved a procedural vote required to open Biden’s “Build Back Better Act” to passage, following an official CBO cost estimate.
While the larger infrastructure bill and social safety net did inevitably pass through the House, the Senate has been unable to come to terms on a bill that garners enough votes, thus missing the President’s deadline to get Build Back Better signed before year’s end.
The Build Back Better Act and its potential $12,500 EV credit still await passage following official Congressional approval. We will continue to follow its progress and update this page with the latest as it hopefully moves forward.
Does your electric vehicle qualify for tax credit?
Now that you understand what hurdles you may have to overcome to qualify for the federal tax credit, let’s see how much that EV in your driveway might be able to save you this year.
Please note that these qualifying vehicles are relevant at the time this post has been published. We will update this page as the vehicles and their designated credits change.
|Make and Model||Full Tax Credit|
|e-tron Sportback (2020-2022)||$7,500|
|e-tron SUV (2019, 2021-2022)||$7,500|
|e-tron GT / RS e-tron GT (2022)||$7,500|
|Q4 50 e-tron Quattro||$7,500|
|i3 Sedan (2014-2021)||$7,500|
|Focus EV (2012-2018)||$7,500|
|Mustang Mach-E (all 2021 trims including GT)||$7,500|
|GENERAL MOTORS (GM)|
|Not currently eligible for these tax credits||–––––|
|Ioniq Electric (2017-2021)||$7,500|
|Kona Electric (2019-2022)||$7,500|
|Niro EV (2019-2022)||$7,500|
|Soul Electric (2015-2020)||$7,500|
|EQS 450+ (2022)||$7,500|
|EQS 580 4matic (2022)||$7,500|
|B-Class EV (2014-2017)||$7,500|
|Cooper S E Hardtop 2 & 4 Door (2020-2022)||$7,500|
|i-MiEV (2012, 2014, 2016, 2017)||$7,500|
|Polestar 2 (2021)||$7,500|
|Polestar 2 Long Range – Single & Dual Motor (2022)||$7,500|
|EQ fortwo Coupe (2019)||$7,500|
|EQ fortwo Cabrio (2019)||$7,500|
|Not currently eligible for these tax credits||–––––|
|RAV4 EV (2012-2014)||$7,500|
|ID.4 EV (First/Pro/Pro S) (2021)||$7,500|
|XC40 Recharge Pure Electric (2021-2022)||$7,500|