Does Honda Clarity qualify for tax credits?
In brief: Not for new purchases, as Honda has effectively exhausted the federal plug-in vehicle credit; however, state incentives and potential used-vehicle credits may still apply in some cases. The Honda Clarity lineup is no longer sold new in the United States, and buyers should check both state programs and any applicable used-vehicle credits before trying to claim a credit.
Federal tax credits: what applies to the Clarity
Federal incentives for plug‑in electric and fuel‑cell vehicles are tied to per‑maker limits and evolving policy. Here’s how that affects the Honda Clarity today.
- The federal tax credit for new plug‑in electric vehicles is capped per automaker. Once a manufacturer’s eligible sales reach the cap, new purchases of that manufacturer’s qualifying models no longer receive the credit.
- Honda’s share of eligible credits has been exhausted in the past, so new Honda Clarity purchases do not qualify for the federal credit under the current rules.
- The Clarity lineup is no longer sold new in the U.S., which means there are limited opportunities to apply a federal credit through a new-vehicle purchase. Any potential federal benefit would generally be tied to other, more restricted programs or future policy changes.
Conclusion: For most buyers seeking a new Clarity today, there is no federal tax credit. Potential incentives now are mainly state-specific, and there may be a separate used-vehicle credit under recent law if applicable to a used Clarity purchase.
State and local incentives that may apply
Beyond federal credits, several states maintain incentive programs for plug‑in vehicles. Availability and amounts vary, and programs can change with budgets and policy priorities.
California and major programs
California’s incentive landscape has historically included rebates for eligible plug‑in hybrids, BEVs, and, in some cases, fuel‑cell vehicles, subject to program rules and budget availability. Always verify current eligibility and caps before purchasing.
- California: The Clean Vehicle Rebate Program (CVRP) and related initiatives have historically offered rebates for eligible vehicles, but the exact amounts and eligibility criteria can change each year.
Conclusion: California is typically the most prominent state program to check for PHEV incentives, but confirm current rules and available funds with the program administrator.
Other states and programs
Many other states offer rebates, tax credits, or utility incentives for plug‑in vehicles, though the specifics vary widely by state and utility provider.
- State and utility programs exist in various forms (rebates, tax credits, or charging‑infrastructure incentives). Availability depends on your location and the vehicle type.
Conclusion: If you’re considering a Clarity outside California, research your state’s current incentives and any local utility programs to see what might apply.
What buyers should do if they consider a Clarity
To determine current eligibility, follow these steps.
- Distinguish whether you’re buying a used Clarity or a new one (new Clarity purchases are typically not eligible for the federal credit).
- Check the latest IRS guidance on the federal clean vehicle credit and review any state or local programs in your area.
- Consult your state energy office or a knowledgeable dealer about current incentives for plug‑in vehicles.
- Ask the dealer to verify whether the specific Clarity model and configuration qualify for any available incentives.
- Consider alternative plug‑in options currently eligible for federal credits if maximizing incentives is important to you.
Conclusion: Incentive rules change over time, so always verify the latest information before making a purchase.
Summary
The Honda Clarity does not qualify for the federal tax credit on new purchases today because Honda’s eligible credits have been exhausted under the current policy. The Clarity lineup is no longer sold new in the U.S., so federal incentives are unlikely for new buyers. However, state and local programs—most notably in California—may offer rebates or incentives for qualifying plug‑in vehicles, and a used‑vehicle credit under recent legislation could apply to a used Clarity purchase under certain conditions. Always verify with the IRS, state agencies, and a trusted dealer to confirm current eligibility and any evolving rules.
