Used EV Tax Credit - Dealer never provided information from IRS

[richilou324]

We bought a used Nissan Leaf from CarMax in July 2024 because we wanted to use the tax credit.  It was made known to people at CarMax.  Before finalizing our 2024 return, and after realizing that CarMax was supposed to have sent us an email re eligibility for the tax credit, I called CarMax to confirm eligibility.  After a few days, I was told that the car was not eligible.  I researched the car's history and found that it had been sold to someone in 5/15/24 and then sold back to a dealer 3 weeks later, may have bought it for resale.  Had we been told it was ineligible, we would not have bought the car.  We would have bought a different car.  Is there a way to deal with IRS in this type of situation?

[Vanessa A]

Unfortunately not.  If the vehicle does not qualify, you are not eligible for the EV tax credit.  Since CarMax only sells used vehicles, you would only be able to claim the Used EV credit on any purchase from them.  In order to qualify for an Used EV credit, the vehicle must be at least 2 model years old.  This means, if you bought one in 2025, it would have to be a 2023 or older.  

Additionally, the dealer MUST submit the paperwork.  If they do not submit the paperwork, you are not eligible for the credit. 

The Used EV Credit is worth 30% of the purchase price up to $4,000.  In order to qualify, you must meet the following criteria:

• You must NOT be the original owner
• You must NOT be claimed as a dependent on another persons tax return
• You must NOT have claimed a used vehicle credit in the past 3 years
• You must be the person who bought the vehicle for use and not for resale
• Your AGI cannot be greater than:
  • $150,000 for Married Filing Jointly
  • $112,500 for Head of Household
  • $75,000 for all other filers
    • You can use your AGI from the year you buy the vehicle or the year before if your income would qualify in one year but not the other. 

For the vehicle to qualify the following has to be met:

• At least 2 years older than the current model year 
• Must have a sales prices of no more than $25,000
• Be used primarily in the US
• Have a GVWR of less than 14,000lbs
• Cannot have been used for a used vehicle credit previously
• Bought from a dealer (cannot be a private sale)
• The dealer must report certain information to you at the time of the sale

This Credit is Non-Refundable and cannot be carried forward. 

Click here to see if your make and model qualify.