Does Honda Clarity plug-in hybrid qualify for tax credit?
The current federal tax credit for new plug-in vehicles generally does not apply to the Honda Clarity Plug-In Hybrid. The model is no longer sold new in the U.S., and Honda’s eligibility under the original 200,000-vehicle cap has effectively ended for this vehicle. There may still be other incentives to pursue, such as used-vehicle credits or state programs.
How the federal plug-in vehicle tax credit works
Understanding the federal program helps explain why the Clarity PHEV is not currently a straightforward eligible purchase for most buyers. The federal credit covers a portion of the buyer’s tax liability, but several rules govern eligibility and availability.
- The federal plug-in vehicle tax credit can be up to $7,500 for qualifying vehicles.
- There is a 200,000-vehicle-per-manufacturer cap. When a maker sells that many qualifying vehicles, new models from that manufacturer stop qualifying for the full credit (phasing out thereafter).
- The Inflation Reduction Act introduced additional requirements for new vehicles, including battery materials and sourcing rules, which affect eligibility starting in 2023 for new purchases.
In practice, these rules mean that whether a specific model qualifies depends on the manufacturer’s total qualifying sales and the model year in question, along with whether the vehicle meets the latest material-source rules.
Does this apply to the Honda Clarity Plug-In Hybrid?
The Honda Clarity Plug-In Hybrid is no longer available for new purchase in the United States. Because the lineup has been discontinued and Honda’s model has historically carried the plug-in credit, there is no standard federal tax credit for new Clarity PHEVs today. However, there may be other pathways to incentive, including:
- Used-vehicle credits under recent federal rules for qualifying clean vehicles (the specifics depend on the year of use, price, and purchaser income).
- State and local incentives, which vary widely by state and can apply to both new and used plug-in vehicles.
If you’re considering a used Clarity PHEV or exploring state programs, consult the IRS guidance and your state’s energy office or a tax professional to confirm current eligibility and limits.
Other incentives to consider
In addition to federal considerations, many states and utilities offer incentives that can help offset the cost of a plug-in hybrid or other electrified vehicles. Availability and amounts depend on where you live and the vehicle’s specifications.
- State-level tax credits or rebates for EVs/PHVs (varies by state).
- Utility-based rebates, time-of-use rate programs, or discounted charging rates.
- Local grants or programs tied to clean transportation and emissions reductions.
Check resources such as DSIRE (Database of State Incentives for Renewables & Efficiency) or your state's energy department for up-to-date programs and eligibility.
What you should do next
To navigate incentives for a Honda Clarity Plug-In Hybrid or its used equivalent, take these steps:
- Verify current federal eligibility and any changes to the credit rules on the IRS website or through a tax professional.
- Ask your dealer about any state or local incentives that may apply to the Clarity PHEV or similar vehicles.
- If purchasing used, check the specific requirements for the new-used clean-vehicle credit that became available under recent federal legislation.
Because incentive programs change and can include income caps, vehicle price limits, and other restrictions, professional guidance or a careful review of official sources is highly recommended before making a purchase.
Summary
The Honda Clarity Plug-In Hybrid does not have a straightforward federal tax credit for new buyers today. The model is no longer sold new in the U.S., and eligibility under the original credit framework is not applicable for new purchases. However, there may be a path to incentives through used-vehicle credits or state and utility programs. Always check the latest IRS guidance and your local programs to confirm current eligibility and amounts.
