On What Is The Hybri we translate IRS rules into shopper language. The credit is real money, but the eligibility web (income caps, North American assembly, battery mineral sourcing, MSRP caps) screens out more buyers than it lets through. Check all four boxes before you count on it.
The four eligibility gates
| Gate | Rule (2026) | What kills it |
|---|---|---|
| Buyer income | Modified AGI ≤ $300,000 (MFJ), $225,000 (HoH), $150,000 (single) | High earners are excluded entirely |
| Vehicle MSRP | ≤ $55,000 for cars, ≤ $80,000 for SUVs/trucks/vans | Luxury and most large SUVs are out |
| Final assembly | Must be assembled in North America | Many popular imports are excluded |
| Battery sourcing | Minerals and components from approved countries (tightening annually) | Split credit — $3,750 minerals + $3,750 components; fail one, lose half |
How much is the credit?
- Up to $7,500 if both the mineral and component tests pass.
- $3,750 if only one test passes (most common outcome on 2025–2026 models).
- $0 if neither passes, the car is over MSRP, or you are over income.
The point-of-sale dealer option (new in 2024)
You no longer have to wait for tax season. Since 2024 you can transfer the credit to the dealer at the point of sale and take it as a cash discount on the purchase price. The dealer handles the paperwork with the IRS. You still need to report the transfer on your tax return and confirm your income is under the cap — if you overshoot, you repay the credit the following year.
Used EVs get a smaller credit
A separate $4,000 credit (or 30% of sale price, whichever is less) applies to used plug-in hybrids and EVs under $25,000, purchased from a dealer, by buyers under tighter income caps ($75,000 single / $150,000 MFJ). One credit per vehicle every three years. See our used hybrid buying guide for what to inspect.
What PHEVs actually qualify in 2026
The list shifts quarterly as sourcing rules tighten. As a general pattern, the Toyota RAV4 Prime, some Ford Escape and Mustang Mach-E trims, and several Hyundai/Kia EVs have moved on and off the list. Full battery EVs from Tesla, GM, Ford, Hyundai/Kia, and VW round out most of the eligible list. Many popular PHEVs (Wrangler 4xe, Pacifica, some Lexus) have been excluded due to MSRP or assembly rules.
Next reads on What Is The Hybri
Tax rules change. Confirm current eligibility on IRS.gov and fueleconomy.gov before you buy, and talk to a tax professional about how the credit applies to your situation. This page is educational, not tax advice.