2024 and the $4000 Used EV tax credit getting more interesting

[Mark W]

Hi all,

The US $4000 used EV tax credit has been around for a while now, but 2024 makes the credit much more appealing for a few reasons. Before I get into that, for those that are not familiar, a quick summary of the credit:

• Income limits, $75,000 for individuals, $150,000 married filing jointly
• Car must be bought from a dealer
• Price must be $25,000 or less
• Model year of the car must be at least 2 years old
• Car is only eligible once in it's lifetime. It can not have been previously sold to an eligible buyer after 08/16/2022.*

Complete details are here https://www.irs.gov/credits-deductions/used-clean-vehicle-credit

So, 2024 brings two things to make these credits better:

1. The tax credit is now a Point of Sale credit if you buy from a dealer that participates. The dealer takes the $4,000 (or 30%, whichever is less) off the price of the car and gets reimbursed by the IRS.
2. Many more used EVs are now coming down to the $25,000 price level. Previously, it was mainly Leafs, Bolts, and i3s. Now, used EV prices are continue to fall, and cars like Tesla M3, ID4, Mach-e, are getting to the magic pricepoint.

Are any of you following this? Have you been searching for EVs under $25,000? I read an article on Inside EVs that a large number of dealers have enrolled in the Point of Sale program, but I think most of those dealers are thinking of the $7,500 new car credit. I have not seen any indication from any dealer that they are even aware of the used credit.

Two questions I have:

1. *There has been some confusion about multi-owner cars and whether they qualify. You hear some people saying oh, this car had two previous owners, it doesn't qualify. I don't think that's the case, I think it's only for previous sales after 8/12/22.
2. The rules state that you can only get the used credit once every three years. I think this is by INDIVIDUAL, right? If you file jointly, I think the restriction isn't by tax return, but by person?

Let me know your thoughts on all of this and whether you're planning on trying to purchase a used EV and claim this credit. Thanks.

 

[Mark W]

Well, I guess it's only interesting to me

 

[insightman]

Well, I guess it's only interesting to me

Most of the members of InsideEVs forums already have the EVs we want. The stipulation the used EV sale has to be through a dealer is a big turn-off. However, your questions are interesting to me and I hope someone answers them.

 

[ClarityRVA]

I just purchased a used Honda Clarity from Carmax, and this was one of the reasons why. I don’t have the wallet to purchase a brand new PHEV or EV, so the $4k made the car much more attainable for me.

 

[Fastnf]

I am watching the market. Polestar 2 are closing in on $25k. If I can find one at a participating dealer and get $4k off I may go for one. I can also get $4k from my utility which means I could pick up a 3 year old polestar 2 for around $16k. That would be worth considering. I have '23 F150 Lightning so I don't really need one but if the price is right I would have to think about it.

 

[Mark W]

...I have '23 F150 Lightning so I don't really need one but if the price is right I would have to think about it.

I'm really surprised that the Lightning isn't selling more quickly. Most truck owners don't tow long distances, and if you're not doing that it seems like a great truck. How do you like yours?

 

[Mark W]

I just purchased a used Honda Clarity from Carmax, and this was one of the reasons why. I don’t have the wallet to purchase a brand new PHEV or EV, so the $4k made the car much more attainable for me.

Was the rebate process easy at Carmax? Were they fully aware of it?
We have a Clarity as our road tripping car. We love it. Use HV mode on the highway and then use the battery for local driving. I hope you enjoy yours.

 

[ClarityRVA]

I'm really surprised that the Lightning isn't selling more quickly. Most truck owners don't tow long distances, and if you're not doing that it seems like a great truck. How do you like yours?

I think the dealers killed any hopes this truck had for success with their insane markups when it came out.

Was the rebate process easy at Carmax? Were they fully aware of it?
We have a Clarity as our road tripping car. We love it. Use HV mode on the highway and then use the battery for local driving. I hope you enjoy yours.

The salesperson wasn’t, which wasn’t surprising. But the business office was and printed out a tax form with the rest of my paperwork. I purchased it at the end of the year so I have to claim the credit on my 2023 taxes. I’m not sure if they’re setup to use it at point of sale for 2024.

 

[marshall]

I just purchased a used Nissan Leaf a couple days ago.

The dealership was clueless. The good thing is that the salesman was smart enough to talk to the general manager. It took them a couple of hours to read, understand, and setup the program for their dealership, but we got it done with $4,000 removed from the purchase price. There did seem to be a problem with the dealership getting approval from the IRS, but doesn't surprise me with the new program.

As far as your tax questions, if the spouse is not considered a dependent then it would seem both could use the tax credit. However, I'm not a tax advisor and would advised seeking one about the dependent question.

The time frame tax question, I'm reading it the same as you.

 

[Mark W]

I just purchased a used Nissan Leaf a couple days ago.

The dealership was clueless. The good thing is that the salesman was smart enough to talk to the general manager. It took them a couple of hours to read, understand, and setup the program for their dealership, but we got it done with $4,000 removed from the purchase price. There did seem to be a problem with the dealership getting approval from the IRS, but doesn't surprise me with the new program.

As far as your tax questions, if the spouse is not considered a dependent then it would seem both could use the tax credit. However, I'm not a tax advisor and would advised seeking one about the dependent question.

The time frame tax question, I'm reading it the same as you.

Thanks very much for answering my questions. Was it a Nissan dealership that you bought the Leaf from? It really only took them a couple of hours for them to register with the program? Or do you think they had already previously started the process and just had to iron out problems?

 

[marshall]

Thanks very much for answering my questions. Was it a Nissan dealership that you bought the Leaf from? It really only took them a couple of hours for them to register with the program? Or do you think they had already previously started the process and just had to iron out problems?

It was a Nissan dealer. No, they were clueless. I believe the general manager is a part owner so I'm sure that helped.

 

[Fastnf]

I'm really surprised that the Lightning isn't selling more quickly. Most truck owners don't tow long distances, and if you're not doing that it seems like a great truck. How do you like yours?

I love the lighting. Its quick and powerful yet comfortable and does every thing I ask of it. I replaced my old 93 F250 4x4 with it and so far it has been just as versatile. The prices are starting to settle back down now and no more market adjustment. The dealers are causing the back up. They are still selling well though. I got the Pro version at the MSRP of under $40k so I am one of the blessed ones as far a price goes.

My sister in-law now has my old Kona electric. I miss the efficiency and maneuverability of the Kona. I have driven Porsches over the last several decades so I kinda would like something sporty like that which I could also road trip in or maybe run some time trials. The polestar would meet that need. Other wise I will wait for a Porsche electric I can afford. The Taycan is out of my price range currently.

 

[Puppethead]

I have driven Porsches over the last several decades so I kinda would like something sporty like that which I could also road trip in or maybe run some time trials.

I was driving my Lightning during the cold snap because my daily drive with my MINI Cooper SE's shorter range needs a mid-day charge in subzero weather, and I had to keep reminding myself the Lightning doesn't handle like the SE so I had to temper my driving. The Lightning works great in cold weather, though, and is much better to drive than an ICE truck.

 

[marshall]

It's not surprising, but the Nissan dealer is having problems with IRS's process. Apparently there have been computer problems along with the Tsunami of dealers signing up in the last few week, something like starting from 7,000 dealers to over 9,000 dealers in two to three week.

 

[Mark W]

It's not surprising, but the Nissan dealer is having problems with IRS's process. Apparently there have been computer problems along with the Tsunami of dealers signing up in the last few week, something like starting from 7,000 dealers to over 9,000 dealers in two to three week.

So, is their problem holding up your purchase process?

 

[marshall]

So, is their problem holding up your purchase process?

No. However, due the IRS's issues, they asked if I would be flexible with the sales date sent to the IRS.

It seems like the IRS sends an acknowledgement OK when the sales is submitted. That's seems to be where the issue is with the IRS.

Anyhow it will get sorted out as soon as the IRS fixes their issues.

 

[ClarityRVA]

No. However, due the IRS's issues, they asked if I would be flexible with the sales date sent to the IRS.

It seems like the IRS sends an acknowledgement OK when the sales is submitted. That's seems to be where the issue is with the IRS.

Anyhow it will get sorted out as soon as the IRS fixes their issues.

Yup I got a message from Carmax stating that my car wasn’t eligible for the credit, and when I called to ask they said “we just send the vin and sales price to the IRS and they come back with a yes or no”.
So looks like I gotta try and call the IRS now. Yay

 

[Mark W]

Yup I got a message from Carmax stating that my car wasn’t eligible for the credit, and when I called to ask they said “we just send the vin and sales price to the IRS and they come back with a yes or no”.
So looks like I gotta try and call the IRS now. Yay

How many previous owners did it have? Was it previously sold after 8/12/22?

 

[ClarityRVA]

How many previous owners did it have? Was it previously sold after 8/12/22?

I’m the second owner

 

[Mark W]

I’m the second owner

Hmmm... interesting. Below is a list of the requirements for a vehicle to qualify. There weren't any Carmax fees that brought the total price to over $25k before tax and registration, right?

To qualify, a vehicle must meet all of these requirements:

• Have a sale price of $25,000 or less. Sale price includes all dealer-imposed costs or fees not required by law. It doesn't include costs or fees required by law, such as taxes or title and registration fees.
• Have a model year at least 2 years earlier than the calendar year when you buy it. For example, a vehicle purchased in 2023 would need a model year of 2021 or older.
• Not have already been transferred after August 16, 2022, to a qualified buyer.
• Have a gross vehicle weight rating of less than 14,000 pounds
• Be an eligible FCV or plug-in EV with a battery capacity of least 7 kilowatt hours
• Be for use primarily in the United States