Don’t Miss This $4,000 EV Tax Credit — IRS Releases New List for 2025

Good news if you're thinking about buying a used electric car!
As of May 2025, the IRS has shared a new list of used electric vehicles (EVs) that qualify for a $4,000 federal tax credit. This means if you buy one of these cars and meet certain rules, you can get money back on your taxes. That’s a big help for many families.

In this post, we’ll explain:

What the used EV tax credit is
Who qualifies for it
What vehicles are on the updated list
How a trusted CPA can help you claim it

Let’s break it down so it’s easy to understand.

What Is the Used EV Tax Credit?

The federal government wants more people to drive electric cars. They help the environment and use less gas. To make it easier for people to buy them, the IRS gives a $4,000 tax credit to buyers of used electric vehicles. This credit lowers the amount of tax you owe.

For example:
If you owe $5,000 in taxes and qualify for the EV credit, you may only have to pay $1,000. That’s a big savings!

Who Can Get the Used EV Tax Credit?

To get the credit, you must meet these rules:

The car must be at least two years old
You must buy it from a dealer (not a private sale)
The sale price must be $25,000 or less
You must be the first person to claim the credit for that car
Your income must be under these limits:

$75,000 for single filers
$112,500 for heads of household
$150,000 for married couples

A CPA can help check if you meet all the rules before you buy.

Updated List of Qualifying Used EVs (May 2025)

As of May 2025, here are some of the used EVs that may qualify:

Chevrolet Bolt EV (2020 and earlier)
Nissan Leaf (2019 and earlier)
Tesla Model 3 (2018 and earlier, select models)
BMW i3
Ford Focus Electric
Volkswagen e-Golf
Kia Soul EV
Hyundai Ioniq Electric
Fiat 500e

This list changes often, so always check the IRS website or talk to your CPA before buying.

What Does “Qualify” Really Mean?

Not every older electric car qualifies. It must:

Be bought through a licensed dealer
Have a clean title (not a salvage or flood title)
Be listed in the IRS database of approved vehicles

The dealership must also give you a special report showing the car meets the requirements. This paper is important when filing your taxes.

How to Claim the Credit

You’ll need to:

Buy the car from a qualified dealer
Get a seller’s report at the time of sale
File IRS Form 8936 with your tax return
Keep a copy of your paperwork for your records

If that sounds like a lot, a CPA can make it easier. They’ll know exactly which forms to use and help you avoid mistakes.

Can I Get the Credit If I Lease?

No, the used EV tax credit is only for people who buy used electric cars. If you lease, the credit usually goes to the leasing company, not you.

What If I Don’t Owe That Much in Taxes?

The credit can only lower what you owe. You don’t get extra money if your tax bill is lower than $4,000. For example:

If you owe $3,000 in taxes, the credit will reduce your tax bill to $0, but you don’t get the extra $1,000.

Why Work With a CPA?

Claiming tax credits can be tricky. If you make a mistake, the IRS may deny your credit. A Certified Public Accountant (CPA) can help by:

Checking if your income qualifies
Reviewing the car’s eligibility
Completing the correct tax forms
Making sure you get the full $4,000 if you qualify

Your CPA can also help with other credits and deductions you might not even know about!

Why the IRS Offers This Credit

This credit is part of the U.S. government’s Inflation Reduction Act. The goal is to fight climate change by helping more people drive EVs. These cars are better for the planet and often cost less to run.

Where to Start

If you're thinking about buying a used electric car:

Check the IRS list of qualifying vehicles
Make sure your income qualifies
Talk to a CPA
Buy from a certified dealer
Save all your paperwork!