topic EV Car Tax Credit in Get your taxes done using TurboTax

EV Car Tax Credit

Raambo — Tue, 10 Mar 2026 06:59:23 GMT

I place a deposit down on a EV vehicle in March 2022. With the upcoming changes to the tax credit, I am worried that in 2023 the vehicle will not qualify for the full 7500 credit. With the new laws, what is considered a binding contract which will allow me to claim this vehicle for this year. It is expected to be delivered after the 1st of the new year. However, like I previously mentioned, I placed a deposit for this order back in March.

Re: EV Car Tax Credit

BarbL — Wed, 16 Nov 2022 19:02:55 GMT

If you entered into a binding contract to purchase the vehicle prior to August 16, you fall under the old rules. The IRS considers it a binding contract if you put at least 5% of the purchase price down as a nonrefundable deposit.

Under these rules, the credit is between $2,500 and $7,500 depending upon battery capacity, and the car must weigh less than 14,000 pounds. The credit is non-refundable, meaning that you can't receive a credit that exceeds your tax liability for the year. (ie. If you are eligible for a $7,500 credit but your tax liability for the year is $6,000, you will only receive a $6,000 credit.) The credit is claimed in the year you actually take possession.

If you are not in a binding contract, or entered into one August 16 or later, you fall under the new rules. In addition to the income limitation and cap on the price of the vehicle, the new rules also require final assembly of the vehicles to be in the U.S. in order to qualify for the credit. (There is also a requirement that the battery be built in the U.S. with minerals mined or recycled in the U.S., but that does not go into effect until future years.) Very few vehicles meet this requirement.

If you aren't sure where final assembly occurred, you can look it up here (though you will need the VIN, which you probably don't have yet): https://www.nhtsa.gov/vin-decoder

Re: EV Car Tax Credit

Raambo — Wed, 16 Nov 2022 19:55:49 GMT

Follow-up…

If I adjust the amount I put down to equal the 5% now would that be okay, since the original deposits was made back in March.

Also, if I purchase in December but don’t receive it till January does it still count?

Re: EV Car Tax Credit

BarbL — Wed, 16 Nov 2022 21:35:10 GMT

Unfortunately, the full deposit must have been made prior to August 16th to meet the IRS definition.

If a vehicle is purchased in December but not delivered until 2023, it will be subject to the new rules. There is a bit of a middle ground for vehicles purchased AND delivered between August 16 and December 31,2022, but you'll fall outside those rules if you don't take possession prior to the end of the year.

It's a crazy change to the rules, and honestly unfair when so many people have had to wait so long for delivery of a vehicle.

Re: EV Car Tax Credit

Raambo — Wed, 16 Nov 2022 21:39:52 GMT

Thank you for the information. It is a bit frustrating on the changes but I wanted to make sure I don’t get caught up on anything with the IRS. My dealer seemed to think there was some workaround but I didn’t think so.

Anyways thank you for your responses today. I really do appreciate it.