Buy an Electric Vehicle in 2023? You May Be Eligible for a Tax Credit

With Tax Day just over six weeks away, AAA Northeast is reminding anyone who bought an electric vehicle last year to check if they’re eligible for a federal tax credit.

— an announcement from AAA Northeast

Last year, more than 1.4 million electric vehicles were sold across the country, including over one million fully electric vehicles — both the highest figures on record, according to the Argonne National Laboratory.

The federal EV credit changed last year, with limits on which filers and vehicles are eligible, so this is the first time taxpayers will use this version of Form 8936 to claim the credit. Here’s what consumers need to know about who is eligible:

*If your adjusted gross income was below this threshold in either 2022 or 2023, you’re eligible for the credit.

**To be eligible for a 2023 tax credit, a vehicle’s final assembly must have 
occurred in North America. Additionally, vehicles placed in service on and after 
April 18, 2023 must meet sourcing requirements for critical minerals, for battery 
components, or both; a vehicle that fulfills both of those requirements is eligible for a $7,500 credit, a vehicle that meets only one of those requirements is 
eligible for a $3,750 credit, and a vehicle that does not meet either requirement 
is ineligible.

***Used EVs purchased in 2023 must have a model year of 2021 or older to be 
eligible.

For drivers considering buying an electric vehicle in the coming year, federal rebates have changed in 2024 in two key ways:

• Fewer vehicles are eligible: The sourcing requirements for critical minerals and battery components became more stringent in 2024, so fewer vehicles are eligible for the credit. Prospective buyers should still visit FuelEconomy.gov to see if the make and model they’re interested in qualifies.
• Point-of-sale rebates: Buyers don’t need to wait until they file their tax return to get the credit they’re entitled to – they can receive it as a rebate when they purchase the vehicle (in most cases, the rebate will be deducted from the cost of the vehicle). Consumers should make sure their dealer is participating in this program and confirm that their particular car is eligible.

Connecticut residents may also be eligible for rebates on EV purchases via the CHEAPR program.