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Rev Up Your Savings: The Used Clean Vehicle Credit

Unlock Tax Savings: Get Charged Up with Used Electric Cars

(PHOTO: Rev Up Your Savings: The Used Clean Vehicle Credit)

Transitioning from New to Used Electric Vehicle

According to The U.S Sun, starting January 1, 2023, buyers of certain used electric vehicles can qualify for the used clean vehicle tax credit, capped at $4,000 or 30% of the purchase price, if bought for $25,000 or less from a licensed dealer. However, the credit is non-refundable, cannot exceed owed taxes, and cannot be carried forward. Sellers must register the sale with the IRS. Vehicles purchased before 2023 are ineligible. New electric vehicle buyers may get a one-time $7,500 tax rebate, sometimes transferrable to select dealerships for an immediate discount. Popular electric vehicles may not qualify for this rebate.

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Eligibility criteria for the Used Clean Vehicle Tax Credit

Eligibility criteria include personal use only, not being the original owner, not being claimed as a dependent, no prior claim for three years, and meeting modified AGI limits. Additionally, the vehicle must have a sale price under $25,000, a model year at least two years older than the purchase year, not have been transferred after August 16, 2022, have a gross vehicle weight rating below 14,000 pounds, be an eligible FCV or plug-in EV with a battery capacity of minimum seven kilowatt hours, and be primarily used in the United States. To access the tax credit, IRS form 8936 must be completed.

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