New EV tax incentive (30D)

The 30D new electric vehicle tax incentive makes it more affordable for Americans to purchase a new electric vehicle (EV). You can claim this incentive if you are eligible and purchase your new vehicle from a registered dealership.

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Disclaimer: The information presented here is for educational purposes only. It is not intended to provide specific tax guidance. For questions regarding your individual tax situation, we suggest consulting with your tax advisor.

Tax Credit

Up to $7,500

Available now

Starting in 2024, this credit can be transferred to dealerships in exchange for a point-of-sale discount, reducing the amount you pay the dealership at purchase.

This protocol for using the 30D tax incentive went into effect on January 1, 2024 and it was different in prior years. To use the 30D tax credit for a new EV you purchased last year (2023), you must claim it as a tax credit when you file your income tax return.

What is the 30D new EV tax incentive?

The new EV tax incentive gives qualifying households up to $7,500 towards the purchase of an electric vehicle.

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The 30D new EV tax incentive provides up to $7,500 toward brand-new electric cars with a maximum sticker price, or MSRP, of $55,000, and new vans, pickup trucks, and SUVs, with a max MSRP of up to $80,000. 

This tax incentive makes buying a new EV more affordable for Americans by reducing the cost of new electric vehicles at the time of purchase. 

Here’s a quick breakdown of the incentive by vehicle type: 

Vehicle Type:Brand-new EV with a maximum MSRP of $55,000Incentive amount:Up to $7,500 in up-front discounts for qualifying vehicles
Vehicle Type:Brand new electric van, pickup truck, or SUV with a maximum MSRP of $80,000Incentive amount:Up to $7,500 in up-front discounts for qualifying vehicles

Sources: IRS; IRS Pub. 5865

The new EV tax credit only applies to brand-new electric vehicles and does not include used EVs. (Used EVs qualify for a different incentive program, the 25E Used EV Tax Incentive, which we cover in this article.) 

The first step in using this upfront tax incentive is determining whether a new EV qualifies. The rules vary depending on many factors, including an EV’s make, model, and where parts for the vehicle were manufactured and assembled. The rules for these requirements are updated each year. To find vehicles that currently qualify for the tax credit, you should visit this federal government website. Note that EV eligibility may change annually.

New EVs must meet multiple requirements in order to qualify for this incentive, so make sure you talk with your car dealer before you make a purchase. They’re required by law to provide you with the information you need to ensure your EV purchase qualifies, including the VIN. 

You can find a complete list of the information your car dealer must provide on the IRS website.

Individuals and households that meet income requirements

New EV purchases are subject to income caps based on income tax filing status. Those caps are: 

  • $300,000 for married couples filing jointly

  • $225,000 for heads of households

  • $150,000 for all other filers

If you fall at or below the income cap for one of these categories, congratulations—you're eligible for a 30D tax incentive!

If you fall above your designated income cap, or think you might by the end of the tax year, do not claim this incentive! You will be required to pay it back.

There are tons of new EVs on the market, but not all of them qualify for the 30D tax incentive, and some might only qualify for half of the incentive. Some EVs that qualified for this tax incentive in previous years no longer do.

To make sure that the EV you want to purchase qualifies for this tax incentive, talk to your dealer before making a purchase. They are required by law to provide you with the information you need to know if a car qualifies. 

You can also look up information about whether a specific vehicle qualifies for a 30D tax incentive on this federal government website.

If you’re interested in learning about requirements that new EVs must meet, we’ve broken them down below:

Qualifying new EVs must meet manufacturing and geographic requirements

To qualify for the 30D tax incentive, a new EV must meet the following requirements:

  • Have a battery capacity of at least 7 kilowatt hours

  • Be rechargeable using an external source of electricity

  • Weigh less than 14,000 pounds

  • Be made by a qualified manufacturer and purchased new

  • Have final assembly in North America

EVs also have to meet battery and minerals sourcing requirements

If you started driving your new EV on or after April 18, 2023, it must meet federal requirements for battery components and critical minerals to qualify for this EV incentive. 

If your new EV meets some or all of these requirements, you’ll be eligible to receive:

  • $3,750 if the vehicle meets the critical minerals requirement only

  • $3,750 if the vehicle meets the battery components requirement only

  • $7,500 if the vehicle meets both

It’s important to ask your dealership which incentive level your potential new vehicle may qualify for. 

You can learn more about these requirements here. 

Here are all the steps you need to take to save on your new EV.  

  1. Verify with your car dealer that you meet income requirements and that your new EV meets vehicle requirements alongside minerals requirements, battery requirements, or both. Ask to see official documentation verifying your car dealer and new EV’s eligibility. Tell your car dealer that you’d like to use the 30D new EV tax incentive to either reduce the purchase price of the vehicle or receive cash back, depending on the options your dealership offers.

  2. When completing the sale of your new EV, your car dealer will electronically submit information verifying the transfer, include a time of sale report, and provide you with written confirmation that your new EV qualifies and the credit amount it qualifies for. 

  3. Fill out and include IRS Form 8936 (including your VIN) to show that you claimed the 30D New EV tax incentive. Submit this form with your federal tax return for the year in which you took ownership of your new EV.  

Remember: The steps listed above for claiming the 30D tax incentive are new and went into effect on January 1, 2024 and were different in prior years. In 2023 and earlier, 30D was claimed as a tax credit upon filing income tax returns for the year in which a new EV purchase was made. 

The big difference now is that you can receive the 30D tax incentive as a discount at the time of EV purchase rather than waiting to receive it as a refund when you file your income tax return.  

Be sure to review this information from the US Department of the Treasury to ensure you follow the right steps for the year in which you’re claiming the 30D tax incentive. 

Discover other incentives with the incentives calculator!

There are other incentives that you may qualify for. Our incentive calculator will show you a personalized list of incentives.

Go to Incentive Calculator

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