Federal Tax Credits for Pre-owned Plug-in Electric Vehicles

[Anonymous]

Looking to purchase a 2023 PHEV. Has anyone done this? Supposedly the dealer takes off the cost? We make under 150k so we should Federal Tax Credits for Pre-owned Plug-in Electric and Fuel Cell Vehicles
https://www.fueleconomy.gov/feg/taxused.shtml#requirements

[Anonymous]

I believe it has to be at least 2 model years old, so 2023 would be too new.

[jsteele]

Yes, it has to be two years old so wait until January 1. You will have the option to sign the rebate over to the dealer and they will deduct it from the cost of the car. That is the best way to go.

[Anonymous]

jsteele wrote:Yes, it has to be two years old so wait until January 1. You will have the option to sign the rebate over to the dealer and they will deduct it from the cost of the car. That is the best way to go.

Thank you but we realized it’s gross income, not net.

[jsteele]

Anonymous wrote:

jsteele wrote:Yes, it has to be two years old so wait until January 1. You will have the option to sign the rebate over to the dealer and they will deduct it from the cost of the car. That is the best way to go.

Thank you but we realized it’s gross income, not net.

According to this, it is adjusted gross income:

https://www.irs.gov/credits-deductions/used-clean-vehicle-credit

In addition, your modified adjusted gross income (AGI) may not exceed:

$150,000 for married filing jointly or a surviving spouse
$112,500 for heads of households
$75,000 for all other filers

[Anonymous]

jsteele wrote:

Anonymous wrote:

jsteele wrote:Yes, it has to be two years old so wait until January 1. You will have the option to sign the rebate over to the dealer and they will deduct it from the cost of the car. That is the best way to go.

Thank you but we realized it’s gross income, not net.

According to this, it is adjusted gross income:

https://www.irs.gov/credits-deductions/used-clean-vehicle-credit

In addition, your modified adjusted gross income (AGI) may not exceed:

$150,000 for married filing jointly or a surviving spouse
$112,500 for heads of households
$75,000 for all other filers

We’re just a tiny bit over! Anyway our independent son could by this? Or is that tax fraud?

[jsteele]

Anonymous wrote:

jsteele wrote:

Anonymous wrote:

jsteele wrote:Yes, it has to be two years old so wait until January 1. You will have the option to sign the rebate over to the dealer and they will deduct it from the cost of the car. That is the best way to go.

Thank you but we realized it’s gross income, not net.

According to this, it is adjusted gross income:

https://www.irs.gov/credits-deductions/used-clean-vehicle-credit

In addition, your modified adjusted gross income (AGI) may not exceed:

$150,000 for married filing jointly or a surviving spouse
$112,500 for heads of households
$75,000 for all other filers

We’re just a tiny bit over! Anyway our independent son could by this? Or is that tax fraud?

As long as he is not a dependent on your taxes, he can buy it,

[jsteele]

BTW, just to make sure you are aware, the adjusted gross income limits can be for last year or this year. So if you were below the cut-off last year, you are good to go. If you think you are close this year, you might be able to make extra retirement contributions or something to get under it.

[Anonymous]

Anonymous wrote:I believe it has to be at least 2 model years old, so 2023 would be too new.

Hi Jeff, you seem to know a lot about this. Would a 2021 model qualify if purchased this year? 2024. Price is under 25k.

[jsteele]

Anonymous wrote:

Anonymous wrote:I believe it has to be at least 2 model years old, so 2023 would be too new.

Hi Jeff, you seem to know a lot about this. Would a 2021 model qualify if purchased this year? 2024. Price is under 25k.

Yes, definitely. You just have to have an AGI below $150,000 for a married couple or $75,000 for an individual.

[Anonymous]

Jeff, I feel like I owe you a signing bonus but another question. We found a PHEV for my daughter who is a dependent. Could she buy the car and get the tax credit? We claim her. The dealer doesn’t want to take off credit (probably because she doesn’t qualify?)

[jsteele]

Anonymous wrote:Jeff, I feel like I owe you a signing bonus but another question. We found a PHEV for my daughter who is a dependent. Could she buy the car and get the tax credit? We claim her. The dealer doesn’t want to take off credit (probably because she doesn’t qualify?)

If she is a dependent then she is not eligible. The credit goes to the tax return instead of the individual. So even if your joint income was below the cut-off, you and your wife could not both get the credit. Same for your daughter.