Save up to $4,000 with the Clean Vehicle Tax Credit

The Federal Previously-Owned Clean Vehicle Tax Credit can help you save up to $4,000 on your next pre-owned qualified electric car (EV) or plug-in hybrid electric vehicle (PHEV).

Carvana now makes it easier to save by applying these tax credits to eligible vehicles at checkout. The Clean Vehicle Tax Credit could help you get the EV you want for less.

Note: The IRS refers to this program as the “previously-owned clean vehicle tax credit,” but we also refer to it as the “Used Clean Vehicle Tax Credit” or “Clean Vehicle Tax Credit” for ease of use.

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How the Federal Used Clean Vehicle Tax Credit Works

To qualify for the Federal Used Clean Vehicle Tax Credit, both the buyer and the vehicle they’re purchasing need to meet specific qualifications established by the federal government and codified in the Inflation Reduction Act. Carvana makes it easy to understand which vehicles may qualify for the credit. Just look for the green “Clean Vehicle Tax Credit” or “Tax Credit” badge while you search or view individual vehicles as you shop.

Currently, tax filers must file Form 8936 with the IRS to claim a used clean vehicle tax credit, which they can then apply to reduce their federal tax liability.

Qualified customers who purchase a qualified vehicle with Carvana have the option to apply the value of their tax credit directly towards their new ride at the time of purchase, rather than waiting to claim the credit at tax time.

Dealers must opt-in to allow qualified customers to apply the Federal Used Clean Vehicle Tax Credit to the financing terms or purchase price of a vehicle, so not every dealer will offer this alternative way to take advantage of this tax credit.

How to find eligible Clean Vehicle Tax Credit vehicles on our site

Find the “Great Deals” filter on your Search page

Select Clean Vehicle Tax Credit and apply filters to customize your search

Look for the “Tax Credit” badge on eligible vehicles

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Are You Qualified for the Clean Vehicle Tax Credit?

If your modified adjusted gross income (AGI) exceeds the following amounts, you won’t qualify for the used Clean Vehicle Tax Credit:

$112,500 for heads of household
$150,000 for joint filers or spouses
$75,000 for all other filers

Learn more about AGI

In addition to meeting the AGI requirements, you must:

Buy the car for personal use, not for resale
Not be a dependent on someone else’s tax return
Not have claimed more than one used clean vehicle tax credit within the last three years
Not be the original owner of the vehicle you purchase.

At the time of purchase buyers who wish to take advantage of the Federal Used Clean Vehicle Tax Credit will need to attest that they meet the qualifications and income limits above.

How Do Vehicles Qualify for the Clean Vehicle Tax Credit?

A used EV or PHEV must meet a number of qualifying criteria to be eligible for the Federal Used Clean Vehicle Tax Credit.

To qualify for the Federal Used Clean Vehicle Tax Credit, the vehicle must:

Have a sale price of $25,000 or less, including non-government fees (e.g., dealer-mandated shipping and delivery fees); and
Be manufactured at least two years prior to the year of purchase (so for 2023, only cars made in 2021 and earlier qualify).

Additionally, the vehicle must:

Be a Fuel Cell Vehicle or plug-in EV with a battery capacity of at least 7 kilowatt hours;
Be bought for use primarily within the U.S.;
Have a gross vehicle weight rating of less than 14,000 pounds;
Not have already been transferred to another buyer after August 16, 2022.

What Vehicles Qualify for the Federal Used Clean Vehicle Tax Credit?

To see a list of every vehicle that currently qualifies for a Federal Used Clean Vehicle Tax Credit, visit fueleconomy.gov.

We hope you found this page helpful! This content is not meant to provide legal or tax advice. We do our best to provide accurate information, but please conduct your own research before transacting and consider talking to a qualified professional about your unique circumstances. All third-party websites referenced/linked on this page are the property of their respective owners and do not constitute or imply endorsement, sponsorship, or recommendation of Carvana

Frequently Asked Questions

Have more questions about the EV Tax Credit? We’ve got you covered.

How does the government calculate the Clean Vehicle Tax Credit?
The used EV tax credit for any eligible vehicle will equal 30% of the vehicle’s sale price (including any non-government fees, such as shipping and delivery fees), up to a maximum credit of $4,000.
What are some of the financial benefits of purchasing an EV?
Beyond the initial tax savings, used EVs can offer ongoing cost benefits. For example, according to the Department of Energy, electric vehicles generally require less maintenance than their gasoline counterparts because they have fewer moving parts. EVs also run on electricity, which is typically less expensive per mile than gasoline. State-level incentives, such as carpool lane access and reduced registration fees, can also sweeten the deal.
What are the environmental benefits of buying an EV?
Even when accounting for electricity used for charging, EVs usually have a smaller carbon footprint than gasoline cars. EVs are also quieter than traditional combustion vehicles – creating less noise pollution.
How does the Federal Clean Vehicle Tax Credit for used vehicles EVs and PHEVs compare to the tax credit for new EVs and PHEVs?
The new EV tax credit can reach up to $7,500, while the used EV tax credit can reach up to $4,000. Additionally, new and used vehicles have different eligibility requirements to qualify for an EV tax credit.
Is the used Clean Vehicle Tax Credit the same for used vehicles purchased in 2023 vs. 2024?
The maximum amount you can receive from a used EV tax credit ($4,000) remains the same, but car buyers may be able to receive the credit more easily. Starting January 1, 2024, customers may be able to transfer the credit to the dealer to have the total purchase price of the vehicle reduced.
If you purchase from a dealer that is not Carvana, you should ask whether the dealer is participating in the used EV tax credit program, and will allow you to transfer your tax credit to the dealership.
How can I benefit from the Federal Used Clean Vehicle Tax Credit?
There are two ways that the federal used EV tax credit can be applied. For qualified purchases made before the end of 2023, a taxpayer claiming the credit can lower the amount of federal income tax they owe by up to $4,000.
For qualified purchases made after January 1, 2024, qualified purchasers of a qualified EV can either claim the tax credit themselves or receive up to $4,000 off the cost of the total purchase price of the vehicle.
If you apply the tax credit to reduce the amount of federal taxes you owe, you cannot get back more on the credit than you owe in taxes (in other words, it will not be added to any tax refund you get from the IRS), and any excess credit cannot be applied to future years.
Will I need to file a specific tax form to claim the 2024 Clean Vehicle Tax Credit?
Yes. You’ll need to file form 8936 or another form designated by the IRS with your income tax return whether you transfer the credit to the dealer or claim the credit on your own return.
If the seller or dealer is not registered with the IRS, you won’t receive the benefits of the used EV tax credit.
What does the $25,000 vehicle price limit include?
The following items are not included in the $25,000 vehicle price limit:
- Tax, title, and registration costs; and
- Non-car products like vehicle service contracts, GAP waivers, or insurance.
However, shipping or delivery charges and discounts applied at purchase are included in the $25,000 vehicle price limit.
Is there a limit on the number of vehicles I can claim an Clean Vehicle Tax Credit for?
No, but you may only claim a used EV tax credit once every three years.
What if I have other questions about the used Clean Vehicle Tax Credit?
To answer other questions about the used EV tax credit, we recommend visiting the IRS Frequently-Asked Questions page.

Save up to $4,000 with the Clean Vehicle Tax Credit

How the Federal Used Clean Vehicle Tax Credit Works

How to find eligible Clean Vehicle Tax Credit vehicles on our site

Are You Qualified for the Clean Vehicle Tax Credit?

If your modified adjusted gross income (AGI) exceeds the following amounts, you won’t qualify for the used Clean Vehicle Tax Credit:

In addition to meeting the AGI requirements, you must:

How Do Vehicles Qualify for the Clean Vehicle Tax Credit?

To qualify for the Federal Used Clean Vehicle Tax Credit, the vehicle must:

Additionally, the vehicle must:

What Vehicles Qualify for the Federal Used Clean Vehicle Tax Credit?

Frequently Asked Questions

How does the government calculate the Clean Vehicle Tax Credit?

What are some of the financial benefits of purchasing an EV?

What are the environmental benefits of buying an EV?

How does the Federal Clean Vehicle Tax Credit for used vehicles EVs and PHEVs compare to the tax credit for new EVs and PHEVs?

Is the used Clean Vehicle Tax Credit the same for used vehicles purchased in 2023 vs. 2024?

How can I benefit from the Federal Used Clean Vehicle Tax Credit?

Will I need to file a specific tax form to claim the 2024 Clean Vehicle Tax Credit?

What does the $25,000 vehicle price limit include?

Is there a limit on the number of vehicles I can claim an Clean Vehicle Tax Credit for?

What if I have other questions about the used Clean Vehicle Tax Credit?