The goal is to help ensure you are receiving the maximum value on your carbon-conscious investment because, let’s face it, you’ve gone green and you deserve it. Incentives for customers leasing a Tesla are currently only available in California, Colorado, Massachusetts, New York, and Tennessee. As for plug-in hybrids, most qualify for a federal tax credit between $3,500 and $6,300. In line with Cars.com’s long-standing ethics policy, editors and reviewers don’t accept gifts or free trips from automakers. Additional Articles and Resources on the Tax Credits: Federal EV Tax Credit Phase Out Tracker By Automaker; Huge Flaws in Federal EV Tax Credit Will Hurt US Automakers Beginning in 2020; Edmunds: “Elimination of federal tax credits likely to kill U.S. EV market” (wrong) How The Federal Electric Vehicle (EV) Tax Credit Works The type of vehicle that you choose and your tax circumstances impact the amount of incentive that you qualify for. Qualified Plug-In Electric Drive Motor Vehicles (IRC 30D) Internal Revenue Code Section 30D provides a credit for Qualified Plug-in Electric Drive Motor Vehicles including passenger vehicles and light trucks. If you’ve decided you want an electric car, the next thing to consider is whether to buy or lease one. In 2010, a $7,500 federal tax credit became available for electric vehicles purchased “in or after 2010,” according to the Office of Energy Efficiency and Renewable Energy. There are two versions of the 2020 Kia Niro that qualify for a federal tax credit. Whether you qualify is not a simple yes or no question… well, actually it sort of is, but the amount you may qualify for varies by household due to a number of different factors. Please send any tips or suggestions, or dog photos to him at scooter@9to5mac.com, Porsche Taycan now sold in the US for under $80K, Bianchi launches new family of electric bicycles, You’re reading Electrek— experts who break news about, Electric Vehicle Price Guide – best prices for dealers in the US. The vehicles that are still eligible (AT THE TIME OF THIS WRITING) for the full $7500 EV tax credit are: BMW i3 The non-refundable tax credit cannot directly increase your tax refund and cannot reduce your tax liability below $0, but it could lead to a higher refund.For example, when tax withholding is added to the equation. The credit only applies to purchased new electric vehicles, but those savings may be passed on to the lessee via a lower monthly payment. Those who bought before were able to get a Federal tax credit of $4,000, in addition to credits ranging from $1,000 to $4,000. Assuming you’ve done that: Congratulations on your new car purchase! Federal Income Tax Credits and Other Incentives for Energy Efficiency. Federal credits are only available to the first 200,000 customers of each carmaker offering them. First, understand that these federal tax credits will not last forever, and they may have already expired for your vehicle. Tax liability means the amount of tax figured on your net taxable income. Jaguar I-nPace. The federal tax credit has been a huge boon to the electric vehicle market. The thing is, the tax credit only applies to eligible models for a limited time. your tax bill will be reduced to $0, but you won’t receive that extra $3,500. How The Federal Electric Vehicle (EV) Tax Credit Works; Edmunds – Electric Vehicle Tax Credits: What You Need to Know; Federal and State Laws and Incentives; IRS Form 8936 (Form required to file with your tax return) IRS: IRC 30D – Plug-In Electric Drive Motor Vehicle Credit Quarterly Sales; Email Newsletter Signup . The IRS sends a letter of certification to automakers that notes the make, model, and year of the EVs it sells that qualify for credits. After that, you’ll need to fill out, “The qualified plug-in electric drive motor vehicle credit is a nonrefundable federal tax credit of up to $7,500,” according to Jackie Perlman, principal tax research analyst at The Tax Institute at H&R Block. It largely depended on the fuel efficiency rating of the vehicle. Which EVs are currently eligible? Before giving up hope on your tax break quest for the year, keep in mind the other incentives offered in each state. A tax credit reduces the total amount of income tax an individual owes the federal government. Kia Niro EV… The IRS and the car’s manufacturer determine the amount of credit that the owner of one of these vehicles receives. of Energy site that lists tax credit amounts also notes the schedule for the credits to phase out by automaker. The amount of the credit is $2,500 for allowed vehicles purchased after December 31, 2009, in addition to an amount that does not surpass $5,000 regarding battery capacity. Tesla topped over 200,000 qualified plug-in electrics sold, Subscribe to Electrek on YouTube for exclusive videos, BMW i3 Sedan w/ Range Extender (2014-2021). Many Volkswagen diesel models are currently pre-approved for a tax credit of between $1,000 and $1,700. That means any used EVs you already have or are going to purchase are already disqualified. Again, these incentives vary by state, and much like the federal tax credit, are contingent on multiple factors. In a situation where a taxpayer has a tax liability of $20,000, “If the taxpayer had exactly $20,000 withheld, [they] would be due a refund of $7,500,” says Christine Williamson, CPA, of Clear Advantage Tax & Accounting Solutions. States offer incentives like reduced or eliminated fees very generous state when it comes to vehicle tax is! 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