What You Need to Know About Tax Credits If You Bought a Used EV in 2025
Used electric car and PHEV buyers could get up to a $4,000 tax credit only through the end of September
New legislation eliminated the EV tax credit program on Sept. 30, 2025, making electric vehicle ownership more expensive. Anyone who bought an eligible used electric vehicle (EV) or plug-in hybrid vehicle (PHEV) before then may still be able to claim a tax credit of up to $4,000. Here’s how.
How Much Was the Used EV Tax Credit?
The tax credit for a used EV or PHEV was either $4,000 or 30 percent of the sale price of the vehicle, whichever is lower. For example, if you bought an older used Chevrolet Volt or Nissan Leaf for $8,000, your tax credit would be $2,400.
Who Qualified for a Used EV Tax Credit?
Buyers must have had a modified adjusted gross income (AGI) below $150,000 for joint filers, $112,500 for a head of household, and $75,000 for an individual—lower than the income limits for buyers of new EVs. You can’t get the credit if you’re a dependent on someone else’s taxes, you can’t sell a car to yourself, and you can’t claim the credit more than once every three years.
To determine eligibility, you can choose to use your income either from the year you take delivery of the vehicle or the year before. If your income exceeds the limit and you claim the credit, the IRS will require you to repay it.
Which Cars Qualified for the Used EV Tax Credit?
There were several rules about which EVs, fuel-cell vehicles, and PHEVs qualified:
• The car’s model year must have been at least two years older than the current calendar year. That means in 2025, cars up to the 2023 model year were eligible. Only model year matters—not the year a car was first sold or registered.
• The car could not have a sale price of more than $25,000, not including taxes and fees.
• Any car that has already been resold to a qualified buyer after Aug. 16, 2022 (the date the IRA went into effect) was not eligible for a tax credit. This was called the “first transfer” rule, and was intended to prevent cars from being purchased and resold by individuals solely for the purpose of claiming tax credits (dealer transfers don’t count), says Chris Harto, CR’s senior policy analyst for transportation.
Did You Have to Buy a Used EV at a Dealership?
Yes. According to the IRS, a car must have been purchased from an authorized dealership that reported required information to you and to the IRS at the time of sale. Private sales—buying a car from a friend or family member or a stranger on Facebook Marketplace, for example—didn’t count.
Most dealerships offered the tax credit as an instant discount to qualifying car buyers. Some dealerships factored the tax credit into online pricing, so be sure to read the fine print—especially if the fine print still shows a tax credit now that it’s no longer active.
How Do You Get the Credit?
In 2024, the tax credit turned into an instant rebate, available at most dealerships, and can be claimed regardless of your tax burden. Otherwise, buyers can submit Form 8936, “Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-in Electric Vehicles),” with their tax returns.
Which Used EVs and PHEVs Were Eligible for a Tax Credit?
The IRS released a long list of used EVs and PHEVs that, in theory, qualified for a tax credit. However, the list doesn’t take into account restrictions on a vehicle’s maximum sale price. (Good luck getting a one-owner 2021 Bentley Bentayga PHEV for less than $25,000!)
