Electric vehicles are no longer a futuristic concept—they’re becoming the new standard on American roads. To support this transition, the U.S. government offers significant financial incentives, including the federal EV tax credit, to encourage consumers to switch to cleaner and more sustainable vehicles.
But understanding How to claim the EV tax credit can feel confusing, especially with updated 2024–2025 rules, new IRS forms, income requirements, and the point-of-sale (POS) credit option. Whether you’re buying a new or used EV, or planning a purchase this year, this guide walks you through everything you need to know.
This comprehensive, expert-level article explains:
- Eligibility requirements
- IRS forms needed
- Updated EV rules for 2025
- Step-by-step instructions
- Dealer reporting
- How refunds work
- Common mistakes
- FAQs
By the end, you will fully understand How to claim the EV tax credit and ensure you receive the full benefit you’re entitled to.
What Is the Federal EV Tax Credit?
The federal EV tax credit—officially called the Clean Vehicle Credit—is a U.S. government incentive that offers:
- Up to $7,500 for new EVs
- Up to $4,000 for used EVs
This credit is designed to:
- Lower the cost of electric vehicles
- Reduce greenhouse gas emissions
- Encourage cleaner transportation
- Support American battery manufacturing
- Make EVs accessible to more drivers
The credit is part of the Inflation Reduction Act (IRA) and includes strict criteria related to:
- Income limits
- Vehicle pricing
- Battery sourcing
- Manufacturing location
- Dealer reporting requirements
Understanding these rules is essential before learning How to claim the EV tax credit.
Why You Should Understand How to Claim the EV Tax Credit
Knowing How to claim the EV tax credit ensures you:
- Receive your full credit amount
- Avoid IRS rejection
- Qualify even if your income fluctuates
- Receive instant savings at the dealership
- Know whether your EV qualifies
- Claim correctly for new OR used EVs
The process is not complicated once you break it into simple steps—and that’s exactly what this guide helps you do.
How to Claim the EV Tax Credit — Eligibility Requirements for 2025
Before you can learn How to claim the EV tax credit, you must confirm that both you and the vehicle meet IRS requirements.
Below are the 2025 eligibility rules, explained clearly.
Buyer Income Requirements (How to Claim the EV Tax Credit)
The IRS has strict income limits for claiming the EV tax credit. Your Modified Adjusted Gross Income (MAGI) must be below:
For New EVs
- $300,000 – Married filing jointly
- $225,000 – Head of household
- $150,000 – Single or married filing separately
For Used EVs
- $150,000 – Married filing jointly
- $112,500 – Head of household
- $75,000 – Single
Important:
The IRS allows you to use your previous tax year’s income OR your current year income—whichever is lower. This helps buyers qualify even if their income increased slightly.
This is a key factor in How to claim the EV tax credit successfully.
Vehicle Eligibility Requirements (How to Claim the EV Tax Credit)
For New EVs
The vehicle must:
Be assembled in North America
Meet battery sourcing requirements
Have a minimum battery capacity
Meet MSRP limits:
- $55,000 for cars
- $80,000 for SUVs, trucks, vans
Vehicle eligibility changes frequently due to manufacturing requirements, making it crucial to double-check the EV’s status at the time of purchase.
For Used EVs
A used EV must:
Be at least 2 years old
Cost less than $25,000
Be purchased from a licensed dealership
Not have been previously claimed for the used EV credit
Be for personal use only
If your EV meets these criteria, you’re ready to learn How to claim the EV tax credit step by step.
Step-by-Step Guide – How to Claim the EV Tax Credit
Here is the most detailed and easy-to-follow guide available on How to claim the EV tax credit.
Step 1 — Confirm Your Income Eligibility (How to Claim the EV Tax Credit)
Use your tax return from:
- The previous year, or
- The current filing year
If either year meets the income limit, you qualify.
This flexibility allows thousands of additional buyers to qualify each year.
Step 2 — Verify That the EV Itself Qualifies
Ask your dealer for:
- A written confirmation of vehicle eligibility
- The VIN (Vehicle Identification Number)
- A dealer report showing the EV meets IRS requirements
You can also check the IRS’s online list.
This is a core step in How to claim the EV tax credit, as many consumers assume all EVs qualify when they do not.
Step 3 — Obtain Form 15400 From the Dealer
As of 2024–2025, the IRS requires Form 15400 – Clean Vehicle Dealer Report.
The dealer MUST:
Submit this form electronically to the IRS
Give you a printed or digital copy
This verifies:
- Vehicle eligibility
- Buyer identity
- Credit amount
- Taxpayer certification
Form 15400 is the most important new requirement in How to claim the EV tax credit.
Step 4 — Decide How You Want to Claim the EV Tax Credit
There are two ways to claim the credit:
Option A: Claim on Your Tax Return
If you choose to file during tax season, you must:
File Form 8936 – Clean Vehicle Credit
Attach Form 15400
Submit documentation with your Form 1040
This method reduces your final tax bill OR gives you a refund.
Option B: Use the Point-of-Sale Credit (Instant Discount)
New for 2024–2025:
You can claim the credit immediately at the dealership, which reduces your:
- Down payment
- Vehicle price
- Loan amount
The dealer receives the credit from the IRS, while you receive instant savings.
Even buyers with low or zero tax liability can qualify using this method.
Understanding this option is essential in How to claim the EV tax credit effectively.
Step 5 — File IRS Form 8936 (Clean Vehicle Credit)
If you do not use the point-of-sale option, you must file:
- Form 8936
- Form 1040
- Copies of Form 15400
- Purchase agreement
This form calculates:
- Your eligible credit amount
- Tax liability
- Refund amount
Form 8936 is required for both new and used EVs.
Step 6 — Keep All Required Documentation
For audit or verification purposes, keep:
- Purchase agreement
- VIN documentation
- Form 15400
- Dealer certification
- Tax forms
- Proof of payment
Recordkeeping is one of the biggest parts of How to claim the EV tax credit properly.
How Point-of-Sale EV Tax Credits Work in 2025
The new point-of-sale credit is the biggest change affecting How to claim the EV tax credit.
When you buy an EV at a dealership, the dealer:
- Enters your name and Social Security number
- Submits your info to the IRS
- Receives instant approval
- Deducts the credit from your purchase price
This means:
- No waiting for tax season
- No need for tax liability
- No complex forms
- Instant savings
Over 70% of EV buyers are expected to use this option in 2025.
How Refunds Work After Claiming the EV Tax Credit
If you claim on your tax return instead of point-of-sale:
- If you OWE taxes → credit reduces your balance
- If you DO NOT owe taxes → IRS gives you the remaining credit as a refund
Example:
You owe $1,500
You qualify for $7,500 EV tax credit
IRS subtracts $1,500
You receive $6,000 refund
This is a major advantage and one of the biggest reasons people want to know How to claim the EV tax credit accurately.
Common Mistakes to Avoid When Claiming the EV Tax Credit
Avoid these errors:
Buying an EV that does not qualify
Using an income estimate instead of confirmed MAGI
Missing Form 15400
Filing Form 8936 incorrectly
Forgetting VIN documentation
Attempting to claim a used EV credit twice
Filing without proper dealer documentation
Avoiding these mistakes ensures your credit is approved smoothly.
FAQs — How to Claim the EV Tax Credit
1. Can I claim the EV tax credit if I lease an EV?
Yes—but the lender claims it. Many leasing companies pass the savings to the customer.
2. Do I need tax liability to receive the credit?
No. New rules allow a refund even if your liability is low.
3. Do Teslas still qualify?
Some do, depending on battery sourcing and IRS rules at the time of purchase.
4. Can I combine state incentives with federal credits?
Yes. You can stack federal credits with:
- State rebates
- Utility discounts
- Local incentives
5. How long will the EV tax credit last?
The current tax credit runs through 2032.
Conclusion
Understanding How to claim the EV tax credit ensures you take full advantage of one of the most valuable incentives available to American car buyers. Whether you choose to claim at the dealership or during tax filing, the process becomes simple when you know the correct forms, documents, and steps.
With EVs becoming more affordable, efficient, and widely available, there has never been a better time to make the switch. By following this guide, you can confidently claim your credit and enjoy thousands of dollars in savings on your next electric vehicle.