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.