What is the Used Clean Vehicle Credit? Pittsburgh PA

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What is the Used Clean Vehicle Credit?

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Electric vehicles are a great way to reduce your carbon footprint and save money. As the automotive industry continues to move toward an electrified future, various incentives to purchase a new electric vehicle are popping up. However, if a used vehicle is more your pace, you're still in luck! The IRS is offering a used clean vehicle credit for drivers shopping for a used electric vehicle. Here at Three Rivers Chrysler Dodge Jeep Ram, we're all about saving drivers money. That's why, below, we'd like to offer you information on the used clean vehicle tax credit. Read on to learn more!

What Kinds of EVs Are Available?

There are three different types of electric vehicles that, conveniently, all qualify for the used clean vehicle. The first type of EV is a hybrid electric vehicle (HEV), which seamlessly integrates electric and gas power. When accelerating, the gas engine kicks on. Meanwhile, electric power is used when the vehicle is slowing down or coasting. The next type of electric vehicle is a plug-in hybrid electric vehicle or PHEV. Bridging the gap between a hybrid and fully electric vehicle, a PHEV still uses gas and electric power like an HEV. However, unlike an HEV, the battery is recharged by being plugged into a Level 1 or Level 2 EV charger. Finally, all-electric vehicles are also known as battery-electric vehicles or HEVs. These remove gas power entirely, running solely on electric power from a battery pack and at least one electric motor. BEVs are recharged by a Level 1, Level 2, or Level 3 EV charging cable. All three types of electric vehicles are eligible for the clean vehicle tax credit. There is one other less common type of clean vehicle. Fuel cell vehicles (FCV) are ones that run on hydrogen. These also qualify for the credit.

What is the Used Clean Vehicle Tax Credit?

Beginning on January 1st of 2023, the purchase of a qualified used electric vehicle from a licensed dealer, like Three Rivers Chrysler Dodge Jeep Ram at the price of no more than $25,000, you may qualify for the used clean vehicle tax credit. The credit is equal to 30% of the vehicle's purchase price but is not to exceed $4,000. It is important for us to mention that the credit is non-refundable so it must not go beyond your tax liability. Also, you won't be able to carry over any excess credit to the following tax year. It is also important to remember that used EV purchases made before January 1st, 2023, do not qualify for this credit. At the time of the sale, the dealer must give you the necessary information regarding the vehicle's qualification and register online, reporting the same information to the IRS. Otherwise, the vehicle is ineligible for the credit.

What Vehicles Qualify for the Credit?

There are certain requirements that a vehicle must meet in order to be considered for the tax credit. As mentioned above, the vehicle must have a sales price of $25,000 or less. It must also be at least two model years older than the current calendar year when it is purchased. Therefore, if the vehicle is purchased in 2024, it must be a 2022 model year or older. It must also have a gross vehicle weight rating (GVWR) of no more than 14,000 pounds. It must also fall under one of the clean vehicle categories named above: HEV, PHEV, BEV, or FCV. Clean vehicles with batteries that require recharging must have a battery capacity of at least 7 kilowatt-hours (kWh). Finally, the vehicle must primarily be used within the United States. Meeting these criteria ensures the vehicle's eligibility for the tax credit.

Who Qualifies for the Tax Credit?

The buyer of a used clean vehicle must meet a few criteria as well. For example, the vehicle must be purchased for personal use and not for the purpose of resale. Additionally, you mustn't be the vehicle's original owner and cannot be claimed as a dependent on another person's tax return. Additionally, you are deemed ineligible for the credit if you have claimed another clean vehicle credit within the three years prior to the date of purchase.

Shop Used EVs Near Pittsburgh, PA

Purchasing an electric vehicle helps you save in more ways than one with the used clean vehicle tax credit! If you're interested in taking advantage of this credit in the Pittsburgh area, Three Rivers Chrysler Dodge Jeep Ram can help! You can find an array of high-quality pre-owned vehicles, including numerous clean vehicles. Shop our pre-owned inventory while you're here on our website to find the right used car for you. If you have any further questions, please you can ask our sales team using the contact form below this page. We look forward to working with you!