EV Tax Credit Guide: Learn How to Maximize Your Savings

As all-electric vehicles have become more powerful, more efficient, and more cost-effective – more and more shoppers are considering making the transition to an EV. No matter your reason for making the switch, there’s never been a better opportunity to do so thanks to a variety of federal tax credits and incentives available exclusively to electric vehicles. These available incentives and credits can make your EV ownership experience significantly more rewarding. Our team at Basil Family Dealerships has created this handy reference guide that covers this topic in greater detail. You’ll learn all about how these credits work, who could potentially qualify for them, and discover all the ways you can join the all-electric revolution!

Federal EV Tax Credits Explained

There’s no denying the tremendous environmental benefits made possible by EVs due to the fact that they produce zero harmful emissions in comparison to conventional gas or diesel vehicles. Additionally, widespread adoption of electric vehicles plays a huge role in reducing our dependence on foreign oil production. They also help boost our domestic workforce and grow the economy since more and more manufacturers are building their EVs right here in the USA. As a result, it’s certainly easy to understand why the government is making an effort to reward drivers who make the switch to an EV.

Recent legislature has expanded the availability of federal EV tax credits, both for the number of vehicles that can potentially qualify and the dollar amounts of the credits. Please remember that these savings come in the form of a tax credit, not as a standard check from the government. As an example, if you were to have an income tax liability of $3,500 and bought a qualifying vehicle in a given year, that’s the amount that would could potentially receive in the form of a tax credit. On the opposite end of the spectrum, an individual with a $10,000 tax liability would potentially be able to receive the maximum $7,500 credit. Any portion of the credit that’s unused does not roll over to the following year and may not be applied to any other situation.

*These numbers are used for illustrative purposes only and may vary. Please consult your tax advisor for complete details on rules applicable to your individual situation.

Available Tax Credits for EV Charging Station Installation

Installing a dedicated EV charging station in your driveway or garage is the ultimate way to maximize flexibility and convenience, further enhancing your EV ownership experience. As EVs grow in popularity, installation costs are a fraction of what they were just a handful of years ago and continue to drop. However, the price is still high enough that many buyers have a tough time deciding whether or not to invest in an all-electric driving lifestyle.

With the goal of minimizing the financial burden of installing home charging stations and encouraging more buyers to make the switch to an EV, the Alternative Fuel Vehicle Refueling Property Credit has been extended for an additional ten years. Specifically referencing the section 30C tax credit, taxpayers who qualify may claim up to $1,000 for EV charging hardware and installation*. In addition to extending the expiration date of the credit to December 31, 2032, there are some other key changes that we’ll cover below.

• Bidirectional EV Chargers Now Qualify
• Chargers for Two-Wheeled and Three-Wheeled Vehicles Now Qualify
• State and Federal Rebates Can Now Be Combined

*Individual tax situations may vary. The information presented was accurate at time of publishing. Federal rules and tax guidelines are subject to change. Consult your tax advisor for complete details on rules applicable to your individual situation.