Federal Tax Rebates for Purchasing an Electric Vehicle

Federal Tax Rebates for Purchasing an Electric Vehicle

Apparently, electric vehicles are the future, and the transition has already begun. The US Federal Government is incentivizing the move to electric to encourage more people to abandon fossil fuel-powered autos. This is in a bid to reduce greenhouse gases. But are all-electric vehicles eligible?

Eligibility for Electric Vehicle Federal Tax Credits

Eligibility is only for all-electric and plug-in hybrids bought in or after 2010. While the small neighborhood electric vehicles do not qualify for these federal credits, they can still benefit from others.

The credit is up to $7,500, and the amount you will get depends on the battery capacity. But will it affect other incentives? The good news is the federal tax credits will not affect your eligibility for the state or other local e-vehicle incentives.

Other requirements involve certification by the manufacturer. For example, the electric car must be produced by a manufacturer and not converted to electric. It must be treated as a motor vehicle according to the Clean Air Act, and the gross vehicle weight rating (GVWR) does not exceed 14,000 lbs.

But that’s not all. The electric motor should draw power from a battery of not less than four kWh and must be doing the most to propel the vehicle. The vehicle must be new, must be used in the United States, and the original use starts with the taxpayer. It should not be for resale and should be placed in service in or after the 2010 calendar year.

How Do You Claim the Credit?

You fill this form for an eligible plug-in electric vehicle to get the credit. If the electric motor vehicle is for personal use, fill out the credit form here in the appropriate line of the individual tax return.

You can utilize the credit for alternative minimum tax for vehicles purchased in 2010 or after. But if the vehicle is for business use, complete the form for the General Business Credit.

Berkley to Likely Ban Gas-Powered Vehicles by 2027

Berkley to Likely Ban Gas-Powered Vehicles by 2027

Berkeley is considering a gradual phase-out of gas-powered vehicles by 2027 to reduce greenhouse gas emissions significantly. The city council expects a feasibility study on January 19 before considering a law that will phase out 80% of natural gas, diesel, and gasoline vehicle sales.

Council member Kate Harrison is among those pushing for the ban. Harrison believes that the sales tax revenue will grow by having dealerships selling mostly electric vehicles, which could boost sales within the city limits.

According to Harrison, the ban is a realistic move towards a fossil-fuel-free future.

The city expects to convert its fleet of vehicles to all-electric.

According to a staff report, Berkeley will apply the ordinance on a staggered timeline. Vehicles valued more than $28,000 will be the first to go by 2025 and $23,000 by 2026. The rest of them will be phased out by 2027.

There is no timeline for when the city council will vote to ban gas-powered vehicles.

Berkley Has Been a Pioneer for Radical Environmental Policies

Berkley has never shied away from taking the lead in radical environmental policies, initiatives that have been adopted by numerous other cities across the country. Berkley banned installing natural gas lines in new homes, becoming the first city to do so in the United States.

In the same year, the city banned single-use disposables, requiring the food industry to use compostable utensils and packaging. Berkley was also among the first to introduce curbside recycling.

Following in the Footsteps of California

This comes after Govenor Gavin Newsom, announced plans to ban the sale of new gasoline-powered vehicles by 2035. Newsom signed an executive order requiring all cars sold in California to be zero emissions, a category that includes hydrogen fuel cell vehicles and battery-powered electric vehicles.

California Rebates for Energy Efficient Cars

California Rebates for Energy Efficient Cars

The California electric car rebates are part of a program to help the environment while also putting money back into your pocket. By purchasing an electric vehicle in California, you can save thousands of dollars by accessing discounts when riding on specific roadways in California and gaining tax credits.

Clean Vehicle Rebate Program (CVRP)

By lowering the initial cost of energy-efficient cars, CVRP aims to reduce emissions. The rebates are only available for California residents who purchase or lease an eligible vehicle and meet specific income requirements.

Please note that higher-income consumers with income above the income cap are not eligible for the rebates. The income gap applies to all vehicle types that are eligible except fuel-cell electric vehicles.

On the other hand, consumers with household incomes below or equal to 300% of the federal poverty level can receive an increased rebate amount. The rebates apply to battery electric vehicles, fuel cell electric vehicles, and plug-in hybrid vehicles.

Other requirements include:

  • A signed Terms and Conditions
  • The most recent CVRP Implementation Manual available
  • A signed application for rebate

The implementation manual and the terms and conditions will determine eligibility for the program. These documents are updated often every year, and the changes can impact your eligibility for the program. You can learn about the next anticipated date for the changes at CVRP FAQs.

Applying for Electric Car Rebates

No doubt, electric cars’ cost is high, but the CVRP program reduces the cost to a certain level. Through the electric car rebates, you can obtain credit on federal taxes, carpool benefits, state rebates, and toll roads discounts.

You are eligible for CVRP within 18 months of acquiring an eligible vehicle.

You will need the following when applying for the electric car rebates:

  • Purchase agreement or vehicle lease
  • SEC Service Account Number
  • Vehicle registration card

Get more details in the CVRP Implementation Manual for program implementation and eligibility information.

New Rules for Electric Car Rebates in Silicon Valley

New Rules for Electric Car Rebates in Silicon Valley

In Early December 2019 the state of California slashed their electric car rebate program. If you were waiting to get your Tesla, your rebate might have evaporated. But it is still available for some purchases, just not at the high numbers it used to offer.

Electric Car Rebates in California

There has been one major shift out of rebate qualification and that is the luxury electric car. Up until December 2019 it didn’t matter what type of electric car you purchased. It would qualify for thousands in rebates. That ended in December. Now the only qualified electric cars are valued at under $60,000. This leaves out the ever-popular Tesla S model.

The new electric vehicle rebates have been lowered, as well. Instead of the $2,500 rebate, it is now $2,000. Assemblyman Phil Ting has been trying hard to get the incentives tripled, not lowered, but it didn’t work. The bill he authored to triple incentives failed in committee earlier.

The wildly successful rebate program in California was so popular that it would drain the budget for rebates early in the year and leave the rest of the applicants on waiting lists. It’s the opinion of some legislators that the program should be enhanced in order to keep air quality improving, instead of depleting the program of funds.

But all is not lost with this program. The income saved in bumping off high-end electric vehicles from the program will be funneled into lower income program incentives. They will be focusing more money into incentives to get lower income residents into electric vehicle cars.

For lower income residents, they’ll qualify for up to $4,500 for all electric cars and up to $3,500 for hybrids. Low Income is defined as a household of 2 people with an income of $50,730.

See what you can qualify for with California’s rebate program.

Tesla Tax Credit Expires but You Can Still Get the $7500

Tesla Tax Credit Expires but You Can Still Get the $7500

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.

Electric Vehicle Tax Credit for Silicon Valley

Electric Vehicle Tax Credit for Silicon Valley

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.

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