Tax Benefits of Owning an Electric Vehicle
Tax credits are a very important tool for getting individuals to start driving electric cars. Many vehicles purchased in 2009 or later are eligible for up to a $7,500 federal income tax credit. The amount of the credit depends on the size of the battery in the car. On the low end, cars with 4 kWh battery packs will receive a $2,500 credit plus $417 for each kilowatt-hour of battery capacity over 4 kwh. The portion of credit determined by battery capacity cannot exceed $5,000, making $7,500 the maximum amount of credit allowed for a new plug-in electric vehicle (PEV).
Tax credits for electric vehicles are also granted at the state level in certain states. For example:
Offers a tax credit of up to $6,000 for the owner of an electric vehicle, based on the size of the battery and purchase price. This offer is good until 2021.
Offers an Income tax credit of 50% of the cost premium of an EV or a tax credit worth 10% of the cost of the EV, up to $3,000. They also offer tax credit for charging station installation.
Offers a tax credit of $125 times the kWh of the battery, not to exceed $3,000. Also offered is a $1,000 one-time tax credit on qualifying vehicles.
Offers a $500 tax credit for converting to an electric vehicle or up to 50% off of the conversion costs
Electric vehicles are exempt from sales tax
Offers a 25% tax credit, not to exceed $750, for the purchase and installation of an EV charging station
Offers a state income tax credit equal to 20 percent of the federal fuel cell, advanced lean burn, hybrid electric vehicle, and alternative fuel vehicle credits
Offers a tax credit of up to $750 for a plug-in vehicle and up to $2,500 for a conversionBack to Blog