Federal Tax Credit Up To $7,500!
Electric vehicles (EVs) purchased in or after 2010 may be eligible for a federal income tax credit of up to $7,500. The credit amount will vary based on the capacity of the battery used to fuel the vehicle.
This credit replaces an earlier credit for EVs purchased in 2009.
Small neighborhood electric vehicles do not qualify for this credit, but they may qualify for another credit.
Vehicle
Make & Model |
Credit Amount |
|
Tesla |
 2008-10 Roadster |
$7,500 |
|
| Updated July 26, 2010. |
|
| The be certified for the credit, the vehicle must meet the following requirements:
- The vehicle must be made by a manufacturer (i.e., it doesn't include conventional vehicles converted to electric drive).
- It must be treated as a motor vehicle for purposes of title II of the Clean Air Act.
- It must have a gross vehicle weight rating (GVWR) of not more than 14,000 lbs.
- It must be propelled to a significant extent by an electric motor which draws electricity from a battery which
- has a capacity of not less than 4 kilowatt hours and
- is capable of being recharged from an external source of electricity.
The following requirements must also be met for a certified vehicle to qualify:
- The original use of the vehicle commences with the
taxpayer—it must be a new vehicle.
- The vehicle is acquired for use or lease by the taxpayer,
and not for resale. (The credit is only available to the
original purchaser of a new, qualifying vehicle. If a
qualifying vehicle is leased to a consumer, the leasing
company may claim the credit.)
- The vehicle is used mostly in the United States.
- The vehicle must be placed in service by the taxpayer
during or after the 2010 calendar year.
|
The credit begins to phase out for vehicles
once the manufacturer produces 200,000 eligible plug-in electric vehicles (i.e., plug-in hybrids and EVs) as counted from January 1, 2010. IRS will announce when a manufacturer exceeds this production
figure and will announce the subsequent phase out schedule.
|
Fill out Form 8834, Qualified Electric and Plug-in Electric Vehicle Credit.
For vehicles acquired for personal use, report the credit
from Form 8834 on the appropriate line of your Form
1040, U.S. Individual Income Tax Return.
Unlike the credit for plug-in electric vehicles purchased in 2009, this credit can be used toward the alternative minimum tax (AMT).
If the qualifying vehicle is purchased for business use, the credit for the business use of an electric vehicle is reported on Form 3800, General Business Credit. |
