How to Claim the $7,500 Electric Vehicle Tax Credit

What the $7,500 EV tax credit is and who can use it

The $7,500 electric vehicle tax credit is a federal tax reduction you can claim when you file your taxes if you bought a new electric vehicle that meets certain requirements. The credit reduces the amount of federal income tax you owe — if you owe $10,000 in taxes and claim a $7,500 credit, you owe $2,500 instead. You claim it on your tax return using Form 8936, which you file along with your regular 1040.

Not every electric vehicle qualifies, and not every buyer can claim the full $7,500. The vehicle must be assembled in North America, meet price caps that vary by vehicle type, and you must meet income limits. The credit also phases down based on how much of the vehicle's battery components and minerals come from countries the U.S. has free trade agreements with — this percentage changes each year and affects which models may have access to.

You can claim this credit only once per vehicle, and only if you are the original owner. If you bought a used EV, you may be able to claim a smaller used EV credit instead, but that is a separate credit with different rules.

Key Takeaways

You claim the $7,500 credit on Form 8936, filed with your federal tax return in the year you bought the vehicle.
Your household income must be below a set limit (roughly $300,000 for joint filers, lower for single filers), and the vehicle's final assembly price must not exceed caps set by the IRS.
The vehicle must be assembled in North America and meet battery component and mineral sourcing requirements that change annually.
You can claim the credit only if you are the original owner and only once per vehicle.
Some dealerships now offer the credit at the point of sale instead of waiting until tax time, but you still report it on Form 8936.

Income limits and vehicle price caps

Your household income must fall below a threshold to claim the full credit. For the 2024 tax year, the limits are roughly $300,000 for married couples filing jointly, $150,000 for heads of household, and $150,000 for single filers. These limits are adjusted each year for inflation. If your income exceeds the limit, you cannot claim the credit at all.

The vehicle's manufacturer's suggested retail price (MSRP) also has a cap. For vans, SUVs, and pickup trucks, the cap is $55,000. For sedans and other vehicles, the cap is $45,000. These are the prices before any dealer markups or add-ons — the MSRP on the window sticker. If the vehicle costs more than the cap, you cannot claim the credit.

Both the income limit and the price cap must be met at the time you buy the vehicle. If you buy a vehicle that qualifies but your income rises before you file your taxes, you still report the purchase on Form 8936 — the income limit is checked when you bought it, not when you file.

Battery and mineral sourcing requirements

The vehicle must meet requirements for where its battery components and minerals come from. The IRS publishes a list each year of which models meet the sourcing threshold. The threshold increases each year, meaning fewer vehicles may may have access to over time as the requirement becomes stricter.

You do not calculate this yourself — the IRS maintains a list of vehicles that meet the requirement for each model year. Before you buy, you can check the IRS website or ask the dealer whether the specific model and year you are considering meets the sourcing requirement. If it does not, you cannot claim the credit even if the vehicle is otherwise new and meets the price and income tests.

How to file Form 8936 with your tax return

You file Form 8936 (may have access to Plug-in Electric Drive Motor Vehicle Credit) along with your Form 1040 when you file your federal income tax return. You will need the vehicle identification number (VIN), the date you bought it, and the MSRP. Most of this information is on your purchase agreement or invoice.

On Form 8936, you enter the vehicle information and calculate the credit amount. The form walks you through whether you meet the income and price requirements. If you use tax software (like TurboTax, H&R Block, or TaxAct), the software will prompt you for this information and fill in the form for you. If you file by hand or work with a tax preparer, give them the purchase documents so they can complete the form.

You file Form 8936 for the tax year in which you bought the vehicle. If you bought the EV in December 2024, you claim the credit on your 2024 tax return, which you file in early 2025. The credit reduces your federal tax liability dollar-for-dollar — if the credit is larger than the tax you owe, you do not get the excess as a refund (unless you are using the point-of-sale credit option, which has different rules).

Point-of-sale credit: claiming the discount at the dealership

Starting in 2024, some dealerships began offering the EV tax credit at the time of purchase instead of making you wait until you file taxes. This is called the point-of-sale credit. If the dealership participates, they can reduce the price of the vehicle by up to $7,500 on the spot, and they handle the credit claim with the IRS.

Not all dealerships offer this, and not all vehicles are may be able to access for it. The vehicle must still meet all the same requirements — income limits, price caps, assembly location, and battery sourcing. You will need to provide proof of income and sign a form confirming you meet the requirements. The dealership then files the credit claim with the IRS on your behalf.

If you use the point-of-sale credit, you still need to report it on your tax return. You will receive a form from the dealership (usually a copy of their filing) that you include with your Form 1040. You cannot claim the credit twice — if you took the discount at the dealership, you do not claim it again on your tax return.

What to do if the vehicle does not meet the requirements

If you bought an EV and later discover it does not meet the sourcing requirement, the price cap, or another rule, you cannot claim the credit. The IRS publishes the list of may have access to vehicles each year, and that list is your source of truth. If a dealer told you the vehicle may have access to but it does not appear on the IRS list, the credit is not available.

If you already claimed the credit on a tax return and the IRS later determines the vehicle did not may have access to, you may owe the credit back. This is rare, but it can happen if a vehicle was removed from the may have access to list after you filed. If you receive a notice from the IRS about this, respond promptly and work with a tax professional if needed.

Some vehicles that do not meet the federal credit may still be may be able to access for state or local EV incentives. Check your state's environmental or energy office website to see what programs may be available where you live.

Frequently Asked Questions

Can I claim the credit if I leased the EV instead of buying it?

No, the $7,500 credit is only for purchases. If you leased an EV, you do not claim this credit. Some leasing companies may pass along a credit to you as a lower monthly payment, but that is handled between you and the leasing company, not through your tax return.

What if I bought the EV in 2023 but did not file my taxes until 2024?

You claim the credit on the tax return for the year you bought the vehicle. If you bought it in 2023, you claim it on your 2023 return, even if you file that return late in 2024. The year of purchase is what matters, not the year you file.

Do I have to have owned the vehicle for a certain amount of time before I can claim the credit?

No, there is no holding period. You can claim the credit on the tax return for the year you bought it, regardless of how long you have owned it by the time you file. If you sell the vehicle a month after buying it, you still claim the credit on that year's return.

Can I claim the credit if my spouse and I file taxes separately?

The income limits explore to your household income. If you file separately, each spouse has a lower income limit than the joint limit. If one spouse's income alone exceeds the separate limit, that spouse cannot claim the credit. You should file jointly if possible to use the higher joint income limit.

What if the dealer says the vehicle qualifies but it is not on the IRS list?

The IRS list is the official source. If a vehicle does not appear on the IRS's list of may have access to vehicles for that model year, you cannot claim the credit, even if a dealer says it qualifies. Before you buy, check the IRS website or ask the dealer to show you the vehicle on the official IRS list.

This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.