§25E Previously-owned Clean Vehicles

Summary

You can get a tax credit when you buy and start using a qualifying used clean vehicle. The credit equals the smaller of $4,000 or 30% of the sale price. You cannot take the credit if either your modified adjusted gross income this year or last year is above the limit for your filing status: $150,000 for joint returns or surviving spouses, $112,500 for head of household, and $75,000 for others. You must put the vehicle identification number (VIN) on your tax return to claim the credit. The credit ends for vehicles bought after September 30, 2025. Previously-owned clean vehicle: a used car that is at least two model years older than the year you buy it, was first used by someone else, was bought in a qualified sale, and meets federal clean-vehicle technical rules. Qualified sale: sale by a dealer for $25,000 or less that is the first transfer since the law took effect to a qualified buyer who is not the original user. Qualified buyer: an individual who buys for personal use (not resale), is not someone else’s dependent, and has not claimed this credit for another vehicle in the prior three years. Modified adjusted gross income: your adjusted gross income plus certain excluded foreign income amounts. Other technical and transfer rules apply as provided in related tax-code sections.