Think fast, the Tesla company has sold its 200,000th credit-qualifying car, so it no longer qualifies for the federal electric car tax credit. However, there is a catch. Even though Tesla passed the mark, the Feds told Tesla they’ll still issue it until January 2019!
Tesla Tax Credit
Beg, borrow and steal is the name of the game as everyone scrambles to scratch up their down payment for their dream Tesla. There are only 5 short months left to take advantage of that $7500 Tesla tax credit.
How to Get the $7500
Normally you would get that rebate on your taxes when you file in 2019. Given that there is a lot that could go wrong with that idea now that the tax credit is expiring, there is a safer option.
Many dealers will use the tax credit themselves. And you’re thinking, “HOLD ON there, cowboy! Nobody touches my $7500 tax credit!” Not to worry. They use it themselves, but they write it into your contract. When you sign on the dotted line to buy your dream Model 3, S or X in the calendar year of 2018, you will see they’ve removed $7500 from your purchase price. So, you are receiving the credit instantly! Yay!
An Extended Tax Credit Option
But what if you just can’t get into the purchase deal until January? Well, you won’t be able to get $7500, but wait! Only in the month of January 2019, you will be able to get $3750 of it. Yay!
Will Tesla Survive?
So, time will tell as to how hard Tesla will be hit when the Tesla tax credit disappears. There are less popular automakers that will still qualify for the full electric car credit after Tesla is no longer a qualified purchase. Possibly their fans will shop elsewhere.
Owning an electric car is great. There is so much less mess, smell and cost involved in operating an electric car. A hybrid car is almost as good. And as a bonus, there are tax credits and rebates for these cars issued by the state of California and the Federal government.
Electric Vehicle Tax Credit
There are three types of electric vehicle tax credits or incentives for which you might qualify when you purchase a new electric car or hybrid. Ask your dealer about the current status of the Clean Vehicle Rebate, the Federal Tax Credit and the California HOV Lane Access.
Clean Vehicle Rebate
The Clean Vehicle Rebate is a program that is funded off and on. You will receive a rebate check within 90 days of purchasing a qualifying car and getting approval, but sometimes it takes longer. The check can be as much as $2500.
Federal Tax Credit
How much you’ll receive as a federal tax credit varies from person to person, but it can be as much as $7500. Instead of getting the credit from the feds as a tax credit, in some circumstances the dealer takes the credit and uses it as an incentive to get you to lease the car. Speak with the dealer and your accountant about this credit.
California HOV Lane Access
After your new car is registered and you have its shiny new license plates, it is time to apply for your decal for HOV Lane Access. Woohoo! The bonus round!
How Much You Can Save
One of the most popular cars in Silicon Valley is the Toyota Prius Prime. Incentives for this particular car are about $1500 for the Clean Vehicle Rebate and up to $4502 for the federal electric vehicle tax credit. And you get to drive in the HOV lane! See even more incentives for your zip code area.
Receiving a rebate or electric vehicle tax credit because you purchased an electric car is always a big bonus! These rebates are one of the many incentives that keep people lining up to buy a Tesla and other electric vehicles. There are still rebates available for you, the electric car owner, in the Bay Area.
Electric Vehicle Tax Credit
Before getting into the electric vehicle tax credit, there is a PG&E rebate that you’ll want to take advantage of. It is called “$500 Clean Fuel Rebate.”
This rebate can be yours from PG&E:
- If your residential PG&E account is active
- You can apply for the credit on behalf of an electric vehicle owner that lives in the building
- If you own or lease an electric vehicle or have permission from the tenant that does
- You can get the Clean Fuel Rebate only once
- The registration fees for the vehicle must be paid
- The vehicle must be registered for the same address as your PG&E account
It is easy to apply. You can apply for the $500 Clean Fuel Rebate online.
The Federal Electric Vehicle Tax Credit from the federal government has expired. The feds did renew it once before, so keep an eye on this program. They might renew it again.
There are numerous federal, state and local programs from everything from free parking, electric bill incentives, rebates for low income and business vehicle rebates. These programs can be sorted through by zip code, so do a search to see all of the programs that are available to you in the Sunnyvale area. You’ll likely find many programs that will give you new found cash and discounts.
At A1 Performance Auto Repair we are happy to keep you informed on Electric vehicle tax credits and rebates you might be entitled to receive.
The Electric Car Tax Credit given to consumers by the IRS could save you up to $7500 when you purchase an electric car. There is a catch, though. Not everyone can enjoy this whopping tax credit this year.
Electric Car Tax Credit
There are a couple of situations where you cannot receive this Electric Car Tax Credit after you buy an electric car. The first situation is if you purchased the car in 2009 or before. The electric cars that will qualify you for the credit are ones purchased in 2010 and later. The second situation is when the manufacturer has sold over 200,000 electric cars in the US. This is when that manufacturer gets phased out of the tax credit. There is one more way to not qualify for the credit and that is if the car is leased and the car lot already took advantage of the tax credit on the car. They do that sometimes to keep lease rates low. Before buying, ask the salesperson to prove that the car qualifies for the tax credit from the IRS.
The tax credit isn’t a full $7500 for buying an electric car. The basic credit is $2500. In addition to that you’ll receive $417 if your car draws battery energy from a battery of 5kW hours or more. You can bump up the credit further for every kW hour after 5 that your car battery has. They’ll give additional $417 for each of those KW hours.
The IRS makes figuring out how much you’ll receive with the Electric Car Tax Credit with a handy chart on their website. Be forewarned, the webpage does take a long time to load sometimes. You can look up the manufacturer and find out how much they’ll give. Tesla, for instance, will generate the full $7500 for all of their car models!
The Prius. Make jokes about it, but it is the big status symbol of today. If you aren’t electric then you are a bad cookie. If you are electric, then Prius is the “Thing.”
Prius got its start in the 2000s, it was awkward looking and there was no missing its clunky looking style. They played right into to the tree hugger’s love for the underdog. Ed Begley, Jr. was talking about his hybrid Toyota everywhere he went whether it was on a late night TV show appearance or somewhere else. By 2010, the Prius was the top dog by being almost half of the hybrids sold.
Why This Car
The appeal is that it is more environmentally friendly than a regular gasoline car. And well, in California there is a great deal of political correctness pressure put on people by those in the spotlight. So, in a sense, you could say peer pressure makes them buy them. But, it is more than that. Californians want to have things that harm the environment less or help the environment and they will withstand quite a bit of inconvenience for it. Not that this particular electric hybrid is inconvenient. In the city, this car should perform as well as any other car, maybe better.
In California owning and driving a Prius is considered cool. Comedians poke fun at that frequently, but not because they don’t like the Prius. They do it because it is their job to wax satirical about the things that people hold up as the best. And currently, that would be the Prius.
Once something hits the cool mark, the – I’m so forward thinking I drive this car, it eventually becomes something everyone has to have. And now all that feel they are environmentally conscious have one or want one. You probably have not missed the boat. You can probably still be cool by owning this electric car. The status symbol will likely last quite some time yet, before it is replaced by something cooler.
The California Electric Car Rebate can be a confusing mess of numbers and possibly false promises. There are some general rules that make this big rebate easier to understand, if you’re hoping to purchase an electric car in 2016.
California Electric Car Rebate
It isn’t only the California Electric Car Rebate that you will want to cash in on, there is also the Federal tax credit. The California rebate can be as much as $2500 when you go green and buy or lease an electric car. The Federal tax rebate can be as much as $7500.
Some key points on that larger rebate with your Federal taxes:
- The Rebate is only applied to your taxes that are due. There are no refunds of taxes already paid. When you owe only $2,000 in taxes, but your car qualifies for $7500 – you get $2,000.
- If you are leasing then the tax rebate goes to the leasing company, not you. However, the leasing company will likely give you a credit for it. So, you might come out ahead if you don’t owe taxes for 2016.
- The original owner of the car is the only one qualified to receive the tax rebate. If your car was owned by the dealership as a test drive model or loaner, that rebate is over.
Buying an electric car might qualify for a rebate from the state of California that is up to $2,500, depending upon the vehicle. You might also qualify for the Federal Tax Rebate. As an additional bonus, you might qualify to drive your new electric car in the HOV lane in California.
If you want to take a stroll through the California Electric Car Rebate advantages of the various electric cars out there, see this Table of Electric Cars. You can click on the car you like and you’ll see a link that lists all the tax rebates and other advantages to that model.