Gary Zhou 
Key Points
- 😄 Used Teslas now qualify for a $4,000 tax credit through the Inflation Reduction Act (IRA).
- 🚗 All four currently-available Tesla models and the Original Roadster are now eligible for the credit.
- 📝 To qualify for the credit, the buyer must meet specific criteria, including being an individual who bought the vehicle for personal use, not being the original owner, and meeting income requirements.
- 💰 Income thresholds for qualification are $150,000 for married filing jointly, $112,500 for heads of households, and $75,000 for all other filers.
- 🛍️ The vehicle must have a sale price of $25,000 or less and a model year at least two years earlier than the purchase year.
- 🔌 The vehicle must not have been transferred after August 16, 2022, to a qualified buyer, and it must be for use primarily in the United States.
- 🚙 It must have a gross vehicle weight rating of less than 14,000 pounds and be an eligible fuel cell or plug-in electric vehicle with a battery capacity of at least 7-kilowatt hours.
- 💸 Finding a Tesla for $25,000 or less is challenging, with the Tesla Model 3 having a significant year-over-year price change above the threshold.
Used Teslas will now qualify for the $4,000 tax credit through the Inflation Reduction Act (IRA) that is applicable for electric vehicles (EVs), Plug-In Hybrid Electric Vehicles (PHEVs), and Fuel Cell Electric Vehicles (FCEVs). However, there is one tough yet significant hoop to jump through for a used Tesla to qualify for the credit.
It appears that Tesla vehicles now qualify for the $4,000 credit based on what FuelEconomy.gov‘s website now states. Previously, the site’s list of pre-owned vehicles that qualify for the $4,000 credit was void of any Teslas.
Now, all four currently-available models and the Original Roadster appear on the list.
It was first spotted by InsideEVs.
There are a significant number of things that would qualify the vehicle and its buyer for the credit:
- To qualify, the buyer must:
- Be an individual who bought the vehicle for use and not for resale
- Not be the original owner
- Not be able to be claimed as a dependent on another person’s tax return
- Not have claimed another used clean vehicle credit in the three years before the purchase date
- Income Requirements are:
- $150,000 for married filing jointly or a surviving spouse
- $112,500 for heads of households
- $75,000 for all other filers
- For the vehicle to qualify for the credit:
- It must be made by a qualified manufacturer. See IRS’s index of qualified manufacturers and vehicles.
Note that fuel cell vehicles do not need to be made by a qualified manufacturer to be eligible. See Rev. Proc. 2022-42 for more detailed guidance. - It must have a sale price of $25,000 or less.
- It must have a model year at least two years earlier than the calendar year when you buy it. For example, a vehicle purchased in 2023 must be a model year of 2021 or older.
- It must not have already been transferred after August 16, 2022, to a qualified buyer.
- It must be for use primarily in the United States.
- It must have a gross vehicle weight rating of less than 14,000 pounds.
- It must be an eligible fuel cell vehicle or plug-in electric vehicle with a battery capacity of at least 7-kilowatt hours.
- It must be made by a qualified manufacturer. See IRS’s index of qualified manufacturers and vehicles.
Finding a Tesla for $25,000 is tough, especially at a dealership. Most recent data from iSeeCars lists the Tesla Model 3 as having the biggest year-over-year price change, gauging costs from June 2022 to June 2023.
The price change was 30.5 percent, equating to a $16,258 difference in price. However, this is well above the $25,000 threshold that is listed in order for it to qualify for the $4,000 tax credit.
