October 10, 2022
Electric vehicles and EV charging equipment are important investments for the future of our country. This is recognized at the federal level with consumer tax credits to encourage adoption of this new technology. In addition to federal tax credits, many states and electric utilities provide rebates, incentive programs, and state-level tax credits as well. Below you will find a summary of available state and federal incentives for electric vehicles and EV chargers.
Federal Tax Credits
EV Chargers
The federal government offers consumers a tax credit for EV charger hardware and installation costs. The credit covers 30 percent of the costs up to a maximum of $1,000 for residential installation. The credit can also be applied retroactively for installations as early as 2017. More information on this tax credit may be found at https://www.irs.gov/forms-pubs/about-form-8911.
For commercial installation of EV chargers, there is a 6 percent tax credit up to a maximum of $100,000 per unit. To qualify, the commercial charger must be located in a low-income or non-urban community.
Electric Vehicles
Federal tax credits of up to $7,500 are available for the purchase of new all-electric or plug-in hybrid vehicles. The amount of the tax credit and eligibility for the credit will vary depending on the specific make, model, and battery size of the electric vehicle. The 2022 Inflation Reduction Act limits tax credits to only passenger vehicles assembled in North America. Beginning in 2023, only sedans under $55,000 and SUVs and vans under $80,000 will qualify and buyers must have an adjusted gross income of under $150,000 for individuals, $225,000 for head of household, or $300,000 for a joint household.
The IRA also introduces a used EV tax credit of 30 percent of the sale price up to $4,000. Final sales price must be less than $25,000. The used EV incentives have an income cap of $75,000 for individuals, $112,500 for head of household or $150,000 for a joint household.
Beginning in 2024, the law will allow car buyers to transfer the credit to dealers at the point of sale, lowering the upfront purchase price of EVs and expanding affordability to lower- and middle-income households.
A list of qualified electric vehicles can be found at https://www.irs.gov/businesses/irc-30d-new-qualified-plug-in-electric-drive-motor-vehicle-credit.
To determine a specific vehicle’s eligibility, enter the Vehicle Identification Number (VIN) at https://www.nhtsa.gov/vin-decoder.
A complete roundup of federal laws and incentives for electric vehicles and EV chargers is available at https://afdc.energy.gov/fuels/laws/ELEC/US.
State Level Tax Credits, Utility Rebates, and Incentives
Hundreds of state and local tax credits, utility rebates, and other incentives are available to consumers, businesses, and government entities to purchase electric vehicles and purchase and install electric vehicle chargers. The U.S. Department of Energy has set up a tool that enables you to search for all applicable laws and incentives in your state. Go to https://afdc.energy.gov/fuels/laws/ELEC to find out more.
The information found in this article has been gathered from sources believed to be reliable, however, Schumacher Electric makes no warranty, express or implied, regarding the accuracy or completeness of any information contained herein. Schumacher is not the issuer of any tax credits and is not responsible for any issues related to obtaining tax credits.