Electric Vehicle Tax Credits: What You Need To Know

Edmunds.com

Electric 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.

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96jagman

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.

jtheires

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?

makiiii

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.

makiiii

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.

makiiii

I mean to say the credit does not carry over. of coruse the 200,000 is a cumulative figure possibly over years.

greenmachine6

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.

greenmachine6

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.

bbrents

A website called www.plugincentives.com is a good resource for free up to date customized incentive in California.

greener_days

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.

willhandley

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.

timjmoore

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.

kyfdx

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?

timjmoore

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.

nonpulsed

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.

wilburr

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?

kyfdx

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.

balderol

Is there any income limitation on the tax credit--i.e., taxpayers over a certain income cannot claim the credit?

shawn97

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

kyfdx

@shawn97 If you are the first titled owner. you should be in the clear

william_10

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.

jvsrealestate

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

garysciascia

the rav 4 prime will be eligible for the full 7500 . you get 2500 for the first 4kw hr, and an additional 417 for each kw hr above the initial 4kw hr. the prime has a 16kw hr battery. 12 X 417 = 5002,,,,5002 + 2500 gets your 7500. All on the IRS website. the 7500 goes against your full tax liability for the year, which can be said to be what you owe. so if you paid 9000 from your weekly paycheck towards your tax liability for the year, you will get the full 7500 credit and get a refund of 7500 of the 9000 you already paid. so in my opinion the prime costs 7500 less than the sticker dictates in my case as I unfortunately pay more than 7500 to federal. I also get a 1100 rebate at the point of purchase from New York State as the electric only range is 39 miles. If it was 40 or more miles I would have gotten 1750 credit at point of purchase from NYS. Good deal in any case. If you haven't paid 7500 in federal tax for the year you probably cant afford a 40000 dollar car anyway unless you are one of the lucky 1% ers who live off their capital gain with a tax rate of 15%.

docfink

Is there any federal tax credit for EVs costing more than $55k (from manufacturers who can still provide that tax benefit, unlike Tesla)?

Ersin

If the new green act bill is passed in 2021 and let's say if it also start covering Tesla EVs; will I still be qualified for tax credit even if I purchased my vehicle still in 2021 but before the bill is passed & went into effect? Or purchase transaction has to be done, after the bill is passed in order to qualify for tax credit?

kyfdx

Ersin said:

If the new green act bill is passed in 2021 and let's say if it also start covering Tesla EVs; will I still be qualified for tax credit even if I purchased my vehicle still in 2021 but before the bill is passed & went into effect? Or purchase transaction has to be done, after the bill is passed in order to qualify for tax credit?

It would depend on the legislation, and whether they made it retroactive to January 1st.

If I had to guess, they won't do that.

DBeard0

Please update your post with relation to the updated bill passed. Great material! I look forward to seeing more.

GreggVA

Can you use the credit more than once? If I bought an EV this year and got the credit, would I be eligible for another credit the following year?

tdennington

Are you still eligible for the credit if you sell the ev in the same year you purchased it? For example, I buy a qualifying car in May 2021, and sell in November 2021, can I still claim the tax credit on my 2021 taxes?

Postalpilot

Do you have to take posession of the vehicle this year to get the tax credit this year, or is reserving a vehicle enough? I'm wanting an F150 lightning, but they wont ship til 2022. I'm owing alot of taxes for 2021, so I thought I would take advantage of the program.

kyfdx

Postalpilot said:

Do you have to take posession of the vehicle this year to get the tax credit this year, or is reserving a vehicle enough? I'm wanting an F150 lightning, but they wont ship til 2022. I'm owing alot of taxes for 2021, so I thought I would take advantage of the program.

Not an expert, but I see no way you could take the tax credit without finalizing a purchase within the calendar year.

grngirl

If I get $ back on my taxes each year would i need to change my witholding in order to owe taxes so that i could take advantage of the tax credit?

kyfdx

grngirl said:

If I get $ back on my taxes each year would i need to change my witholding in order to owe taxes so that i could take advantage of the tax credit?

Withholding or refund amount will have no effect on the ability to receive the credit.

It is a credit against your total Federal tax liability. If your total tax (not the withholding) equals $7500 or more, you'll receive the full credit.

michael5175

Yes, grngirl, you would need to change your withholding so at the end of the year you would owe the government, hopefully, the full amount of the tax incentive (probably $7500).

kyfdx

michael5175 said:

Yes, grngirl, you would need to change your withholding so at the end of the year you would owe the government, hopefully, the full amount of the tax incentive (probably $7500).

This is incorrect. If your total tax is $7500 or more, then you can take the tax credit. It makes no difference if you were due a refund, or if you owed. The only thing that matters is your total Federal tax liability.

MRYFLYGUY

Does anyone know if you can use more than one EV Tax credit per tax year? Say I buy 2 EVs, does this result in a $15,000 tax credit for the year?

HVA

Please refresh this article with newer information at the end of each half of year! Thank you.

Lizcat

I am interested in a Rav4 Prime. A salesman at a dealership here in Maine, told me the tax credit was gone. I have read that it is still available. Is it, should I go to another dealer?

Thanks,
Liz

Michaell

Lizcat said:

I am interested in a Rav4 Prime. A salesman at a dealership here in Maine, told me the tax credit was gone. I have read that it is still available. Is it, should I go to another dealer?

Thanks,

Liz

This site says it is eligible, when you purchase

Jay8484

I purchase a mini cooper EV from a different state. Am I still eligible for the Federal Tax Credit?

kyfdx

Jay8484 said:

I purchase a mini cooper EV from a different state. Am I still eligible for the Federal Tax Credit?

Not a tax expert, but where you buy it should have no effect on the Federal tax credit.

Rein205

If I buy a mini cooper EV in 2022 use the tax credit in my 2022 tax return and move to Europe with the EV a year later in 2023, do I get in trouble with the Federal Tax Credit?

Sminthian

Every comment about getting the incentive is incorrect on here. Look at lines 37 and 38 of your 1040 that you filed this year. That is your tax liability, that's what the incentive uses. If your incentive is $7500 and your line 37 says $7500 or more, you get $7500 back. If your line 37 says $200...then you get $200 back and just threw away $7300...

TheMaverick

Can you delay using the federal tax credit, say you buy an EV in 2022 but you defer and use the federal tax credit in 2023?

Michaell

TheMaverick said:

Can you delay using the federal tax credit, say you buy an EV in 2022 but you defer and use the federal tax credit in 2023?

Not a tax professional, but I’d say if you buy in 2022, then you must use the tax credit for the 2022 filing year.

ethanise

The $750 rebate via the CA Clean Fuel Reward program expires on 9/1, which is in 3 days from today.

ethanise

There is, however, a better CA program, the Clean Vehicle Rebate, which offers $1000-$4500 back, and that is not expiring.

SolarDave

Why no mention of the Chevy Bolt?? It doesn't appear in any of these charts, yet it is a major seller in the EV market...

GaryClark

All but the cheapest Model 3’s are in the same 2023 cost elimination as Lucid. The Mustang Mach-E has a similar fate as the Model 3 with a second just under the wire with no dealer add ons of any kind (razor thin margin).

GaryClark

Was he planning on charging more than $55K?

@Lizcat said:
I am interested in a Rav4 Prime. A salesman at a dealership here in Maine, told me the tax credit was gone. I have read that it is still available. Is it, should I go to another dealer?

Thanks,
Liz

sahikha56

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.