EV Tax Credit Car Totalled

[kamalbabujis]

I bought a Tesla EV car and met with an accident and car was totalled. Insurance Paid off my Loan. Can I apply for tax credit in next year tax return? Can I buy another car and apply for another tax credit?

[Opus 17 · Accepted solution]

You claim a credit, if you are eligible, in the year you buy the EV.  If you buy another, EV, you can claim a credit for that EV in the year that you buy it.  

however, regarding the first EV, claiming the credit reduces your cost basis. This may result in a taxable recovery, depending on how much the insurance payment was. For example, suppose the EV cost $50,000 and you received a $7500 credit. That reduces your cost basis to $42,500. If the insurance settlement was $45,000, the $2500 difference between your cost, and the check is taxable income to you.

[Steven621]

So i recently had a 2014 tesla model s for less then month was a total loss i don't own that vechile no more but now I am trying to get a replacement i put ev credit as a down payment for 2024 but I want to see because when I went to do it again I couldn't because I already used it,my question was can I use it as soon as jan 1st of 2025 or no or how does that work

[Vanessa A]

No, you are not able to use the credit again for a second purchase this year.   One of the criteria to be a qualified buyer is that you did not take the credit in the past three years.  Since you already claimed the credit earlier in the year, you would not be eligible to take another used EV credit until 3 years from the date you used the credit has passed.

§25E. Previously-owned clean vehicles states the criteria to be a qualified buyer in order to claim the credit

The term "qualified buyer" means, with respect to a sale of a motor vehicle, a taxpayer-

(A) who is an individual,

(B) who purchases such vehicle for use and not for resale,

(C) with respect to whom no deduction is allowable with respect to another taxpayer under section 151, and

(D) who has not been allowed a credit under this section for any sale during the 3-year period ending on the date of the sale of such vehicle"

Although, you do not qualify to take an additional Pre-owned EV Tax Credit, you are still eligible to claim a New EV tax credit.  You are able to transfer either two NEW EV credits or one new and one used credit.  So, you would be able to claim a $7,500 credit at the dealership if you otherwise qualify and choose to purchase a new EV.