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Electric Vehicle Tax Credits: What You Need To Know

Edmunds.comEdmunds.com Posts: 9,975
edited May 2017 in Editorial
imageElectric Vehicle Tax Credits: What You Need To Know

Confused as to which plug-in cars still qualify for tax credits? Edmunds.com has prepared the following electric car tax credit guide.

Read the full story here


Comments

  • Can the $7,500 Federal tax credit offset tax on investment income? We are retired and have no "earned" income from working at a job.
  • What is the expiration of the PHEV tax credit? The IRS publication on this topic suggests that after 200,000 eligible cars are sold, the tax credit goes away. However, how is the tax payer to know if/when the tax credit is still available to them? Is there a date when the tax credit (up to $7500) expires?
  • So a lease is the best option for those of us under the 7500 credit level. Good to know. Thanks for sharing this info. it was much more complete than the hacks at the fool.
  • capital gains income should be covered here but the IRS or your CPA will confirm it. You could use turbo tax and just run through the questions and get the answer yourself. As for the 200,000 the mfg/dealer and the state know those numbers and they don't carry over to another year. it should be simplet at the time of purchase to get that answer.
  • I mean to say the credit does not carry over. of coruse the 200,000 is a cumulative figure possibly over years.
  • I bought a 2013 leftover Volt with 378 demo miles on it from a Chevy dealer in Tucson, AZ. I bought this in January of 2014. I assume that I need to wait until next year (2015) to claim the tax credit of $7,500?

    Another question I have. We will be renting a home likely for the next couple of years. Do you know if there is a way to buy or install transportable solar panels that I can possibly charge up the Volt with and then take with me if I move?

    Thank you. Great car by the way!! I rarely have used gas.
  • I bought a 2013 leftover Volt with 378 demo miles on it from a Chevy dealer in Tucson, AZ. I bought this in January of 2014. I assume that I need to wait until next year (2015) to claim the tax credit of $7,500?

    Another question I have. We will be renting a home likely for the next couple of years. Do you know if there is a way to buy or install transportable solar panels that I can possibly charge up the Volt with and then take with me if I move?

    Thank you. Great car by the way!! I rarely have used gas.
  • bbrentsbbrents Posts: 1
    A website called www.plugincentives.com is a good resource for free up to date customized incentive in California.
  • The article reads:"The federal incentive is usually referred to as a flat $7,500 credit, but it's only worth $7,500 to someone whose tax bill at the end of the year is $7,500 or more. Let's say you buy a Nissan Leaf or other eligible vehicle and you owe $5,000 in income tax for a particular year. That's all the tax credit will be. Uncle Sam's not writing a refund check for the other $2,500."

    As I've read elsewhere what one "owes" as in US/federal tax "Amount you owe" line 78 of 1040 (balance due) is irrelevant, as long as total federal/US taxes for the year of purchase is greater than electric/plug-in tax credit amount, the filer/buyer will get the full tax credit, which would include a refund of any overpaid/withheld taxes. The article example is easily misunderstood and should be clarified please - Thanks.
  • As usual with Edmunds, your information is out-of-date, incomplete, and, as greener_days showed, inaccurate as well. A 2016 Ford Focus? As I write this, it is the end of March 2017. This information is way, way out-of-date, and it's the same way when I try to price a new car. Late into the model year, you are still offering to price last year's cars, none of which is even available any more. Coming to your site is a complete waste for time.
  • timjmooretimjmoore Posts: 2
    Can anyone explain why two plug in hybrids (Volt and Sonata) have such a disparity ($7,500 and $4,919)? The plug-in Volt uses gas, but gets the same tax credit as ALL Electric vehicles....seems odd.
    Also, here in CALIF, my electrical utility (PG&E) gave me a $500 rebate on my personal Sonata PHEV.
  • kyfdxkyfdx Posts: 97,279
    timjmoore said:

    Can anyone explain why two plug in hybrids (Volt and Sonata) have such a disparity ($7,500 and $4,919)? The plug-in Volt uses gas, but gets the same tax credit as ALL Electric vehicles....seems odd.
    Also, here in CALIF, my electrical utility (PG&E) gave me a $500 rebate on my personal Sonata PHEV.

    Are those credits you refer to for lease or purchase?

    MODERATOR

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  • timjmooretimjmoore Posts: 2
    Purchase. As the article says, leasing a vehicle does not give the tax benefits to the person who leases, but the owner who leases it to the buyer.
  • nonpulsednonpulsed Posts: 22
    The Volt has an 18.4kwh battery vs a 9.8kwh battery for the Sonata. As stated in the article, rebates amount is based on battery size.
  • wilburrwilburr Posts: 1
    If a qualifying EV is purchased in 2017 and meets all of the requirements, is the tax credit locked in? Or could Mr. Trump's IRS refuse to honor it come April 15, 2018? That is, how contingent is the credit on political vicissitudes?
  • kyfdxkyfdx Posts: 97,279
    wilburr said:

    If a qualifying EV is purchased in 2017 and meets all of the requirements, is the tax credit locked in? Or could Mr. Trump's IRS refuse to honor it come April 15, 2018? That is, how contingent is the credit on political vicissitudes?

    From a general standpoint, very few changes are made to taxes that are retroactive. They almost always start at the beginning of the new tax year. Those that are retroactive tend to favor less tax, not more.

    MODERATOR

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  • Is there any income limitation on the tax credit--i.e., taxpayers over a certain income cannot claim the credit?
  • shawn97shawn97 Posts: 1
    Can Electric Vehicle Tax Credits Be Passed On?
    This question occasionally pops up: Who gets to claim the tax credit in the case of low-mileage cars that dealerships sell after having used them as demonstrators or loaner cars?

    The answer is pretty simple: EV tax credits cannot be passed on. Only the original registered owner of an eligible vehicle can claim the federal tax credit. Even if the original registered owner didn't apply for the credit for some reason, it cannot be passed along to a subsequent buyer.

    This is useful to know because it can be a bargaining point in a used-car purchase negotiation. It might turn out that a new model with the tax credit is a better deal than a used one if the federal tax credit program means the list price for the new model is reduced by up to $7,500.



    My question-- We are purchasing a 2018 Volt that has been used at the dealership as a demo vehicle. There has not been any other owner of the vehicle but the dealership. No other person has used or will use the credit. The dealership is telling us we can take the $7,500 tax credit because it is not used it is new. but the way this article reads I am unsure. Can i take the credit for this car that has been used as a demo car but sold as new... Thank you
  • kyfdxkyfdx Posts: 97,279
    @shawn97 If you are the first titled owner. you should be in the clear

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  • Sounds to me like the tax credit is low in priority. The right vehicle at the right price, is far more important in the long run.
  • jvsrealestatejvsrealestate Posts: 1
    My company purchases hybrid vehicles brand new from a dealer, modifies them for handicap access and then sells them to a specialty dealer. Based on what I read above, is my company who gets the tax credit? title will be in our name for a short period before going to the specialty dealer. thanks
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