2023 Clean Vehicle Tax Credit
The 2023 Clean Vehicle Tax Credit is $7,500.
Effective 2023-01-01Source: Credits for new clean vehicles purchased in 2023 or after (IRS)Verified 2026-08-30
Who it applies to
The credit is available to individuals and their businesses. To qualify a buyer must buy the vehicle new and for their own use rather than for resale, and use it primarily in the United States. The vehicle itself must meet a battery capacity floor and a weight ceiling, be made by a qualified manufacturer, undergo final assembly in North America and stay under a manufacturer suggested retail price cap that differs for vans, sport utility vehicles and pickup trucks. Modified adjusted gross income limits apply and differ by filing status, and the buyer may use the figure from the year of delivery or the year before, whichever is less. The credit is claimed on Form 8936 with the return for the year the vehicle was delivered, and the seller must report the sale to the IRS. The credit has since been terminated; the later year pages state the acquisition date after which it is not available.
What changed this year, and why
2023 is the first year of the New Clean Vehicle Credit in its current form. The IRS states that a buyer may qualify for a credit of up to $7,500 under Internal Revenue Code Section 30D for a new, qualified plug-in electric vehicle or fuel cell electric vehicle. How the amount is built up depends on when the vehicle was placed in service rather than on when it was bought: for vehicles placed in service from January 1 to April 17, 2023 the amount is a base amount plus additions for battery capacity, and for vehicles placed in service on and after April 18, 2023 the amount instead turns on meeting critical mineral and battery component requirements, with the full amount available only where both are met.
Common questions
- What is the clean vehicle tax credit for 2023?
- Up to $7,500. The IRS states that a buyer may qualify for a credit of up to $7,500 under Internal Revenue Code Section 30D for a new, qualified plug-in electric vehicle or fuel cell electric vehicle. It is the maximum, not a flat amount: what a particular vehicle earns depends on when it was placed in service and on the requirements it meets.
- Why did the rules change part way through 2023?
- The amount depends on the date the vehicle was placed in service. For vehicles placed in service from January 1 to April 17, 2023 the credit is a base amount plus additions for battery capacity. For vehicles placed in service on and after April 18, 2023 the vehicle has to meet critical mineral and battery component requirements instead, and a vehicle meeting neither is not eligible at all.
- Is the credit refundable?
- No. If the credit is not transferred, it is nonrefundable, so a buyer cannot get back more than they owe in tax, and any excess cannot be carried to a future tax year.
- How is the 2023 credit claimed?
- On Form 8936, Clean Vehicle Credits, filed with the tax return for the year the buyer takes delivery of the vehicle. The vehicle identification number is required, and the dealer should provide a paper copy of a time-of-sale report confirming that the sale was reported to the IRS.
Every amount on this page is a published figure rather than yours. The What the vehicle costs after the credit takes the number you enter and works it out against them, showing which published figure it used.
The income limits, and the two years you may choose between
For the federal 2023 Clean Vehicle Tax Credit, your modified adjusted gross income (AGI) may not exceed certain limits to qualify for the maximum credit of $7,500. The income limits are: $300,000 for married couples filing jointly or a surviving spouse, $225,000 for heads of households, and $150,000 for all other filers. You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your modified AGI is below the threshold in 1 of the 2 years, you can claim the credit. This means you have flexibility to choose between two tax years to determine your eligibility based on your income level.
In addition, your modified adjusted gross income (AGI) may not exceed: $300,000 for married couples filing jointly or a surviving spouse $225,000 for heads of households $150,000 for all other filers You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your modified AGI is below the threshold in 1 of the 2 years, you can claim the credit.
Credits for new clean vehicles purchased in 2023 or after (IRS)
The sticker price ceiling the vehicle must stay under
For the federal 2023 Clean Vehicle Tax Credit, the vehicle's manufacturer suggested retail price (MSRP) cannot exceed certain caps depending on the vehicle type. The MSRP can't exceed $80,000 for vans, sport utility vehicles, and pickup trucks. For other vehicles, the MSRP can't exceed $55,000. MSRP is defined as the retail price of the automobile suggested by the manufacturer, including manufacturer-installed options, accessories, and trim, but excluding destination fees. Importantly, the MSRP is not necessarily the price you actually pay. You can find your vehicle's MSRP on the vehicle's window sticker. These price caps are part of the eligibility requirements for the maximum $7,500 credit.
In addition, the vehicle's manufacturer suggested retail price (MSRP) can't exceed: $80,000 for vans, sport utility vehicles and pickup trucks $55,000 for other vehicles MSRP is the retail price of the automobile suggested by the manufacturer, including manufacturer installed options, accessories and trim but excluding destination fees. It isn't necessarily the price you pay.
Credits for new clean vehicles purchased in 2023 or after (IRS)
What the vehicle itself has to be
For the federal 2023 Clean Vehicle Tax Credit, the vehicle itself must meet several requirements to qualify for the maximum credit of $7,500. The vehicle must have a battery capacity of at least 7 kilowatt hours and a gross vehicle weight rating of less than 14,000 pounds. It must be made by a qualified manufacturer and undergo final assembly in North America. As of April 18, 2023, vehicles must also meet critical mineral and battery component requirements. The sale qualifies only if you buy the vehicle new and the seller reports required information to you and to the IRS when you take possession of the vehicle. You can find your vehicle's weight, battery capacity, and final assembly location on the vehicle's window sticker.
To qualify, a vehicle must: Have a battery capacity of at least 7 kilowatt hours Have a gross vehicle weight rating of less than 14,000 pounds Be made by a qualified manufacturer Undergo final assembly in North America Meet critical mineral and battery component requirements (as of April 18, 2023) The sale qualifies only if: You buy the vehicle new. The seller reports required information to you and to the IRS when you take possession of the vehicle. Sellers are required to report your name and taxpayer identification number to the IRS for you to be eligible to claim the credit. In addition, the vehicle's manufacturer suggested retail price (MSRP) can't exceed: $80,000 for vans, sport utility vehicles and pickup trucks $55,000 for other vehicles MSRP is the retail price of the automobile suggested by the manufacturer, including manufacturer installed options, accessories and trim but excluding destination fees. It isn't necessarily the price you pay. You can find your vehicle's weight, battery capacity, final assembly location (listed as "final assembly point") and VIN on the vehicle's window sticker.
Credits for new clean vehicles purchased in 2023 or after (IRS)
Why some vehicles get $3,750 and not $7,500
For the federal 2023 Clean Vehicle Tax Credit, the amount you receive depends on whether the vehicle meets critical mineral and battery component requirements as of April 18, 2023. A vehicle can receive up to $3,750 if it meets the critical minerals requirement only, or up to $3,750 if it meets the battery components requirement only. If the vehicle meets both requirements, you can receive the maximum credit of $7,500. A vehicle that doesn't meet either requirement will not be eligible for a credit at all. These requirements are part of what determines whether you receive half or all of the available credit for your qualifying new plug-in electric or fuel cell vehicle.
For vehicles placed in-service April 18, 2023, and after: Vehicles will have to meet all of the same criteria listed above, plus meet new critical mineral and battery component requirements for a credit up to: $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 A vehicle that doesn't meet either requirement will not be eligible for a credit.
Credits for new clean vehicles purchased in 2023 or after (IRS)
The credit cannot exceed the tax you owe
For the federal 2023 Clean Vehicle Tax Credit, the credit is nonrefundable when you file your taxes, which means you cannot get back more on the credit than you owe in taxes. If you do not transfer the credit, any excess credit cannot be applied to future tax years. This means the credit can only reduce your tax liability to zero, but cannot result in a refund greater than your total tax obligation. The maximum credit available is $7,500, but you can only benefit from it to the extent you have tax liability in the year you claim it. This is an important limitation to consider when planning your clean vehicle purchase.
If you do not transfer the credit, it is nonrefundable when you file your taxes, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years.
Credits for new clean vehicles purchased in 2023 or after (IRS)
How to claim it, and the report the dealer owes you
For the federal 2023 Clean Vehicle Tax Credit, you must file Form 8936, Clean Vehicle Credits, with your tax return for the year in which you take delivery of the vehicle. You will need to provide your vehicle's VIN on the form. The dealer must give you a paper copy of a time-of-sale report when you take possession of the vehicle. Keep this copy for your records because it affirms that the dealer sent a report to the IRS on the purchase date. If you didn't receive a copy of the report, you should follow the IRS step-by-step guide. You must file Form 8936 when you file your tax return, whether you transferred the credit when the vehicle was placed in service or you're waiting to claim the credit when you file. The maximum credit available is $7,500 for qualifying vehicles.
To claim the credit, file Form 8936, Clean Vehicle Credits with your tax return. You will need to provide your vehicle's VIN. Get a time-of-sale report The dealer should give you a paper copy of a time-of-sale report when you take possession of the vehicle. Keep this copy for your records because it affirms that the dealer sent a report to the IRS on the purchase date. If you didn’t receive a copy of the report, follow our step-by-step guide. File Form 8936 with your tax return You must file Form 8936 when you file your tax return for the year in which you take delivery of the vehicle. This is true whether you transferred the credit when the vehicle was place in service or you’re waiting to claim the credit when you file.
Credits for new clean vehicles purchased in 2023 or after (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Credits for new clean vehicles purchased in 2023 or after (IRS)
- Maximum credit
You may qualify for a credit up to $7,500 under Internal Revenue Code Section 30D if you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV).