The EV charger federal tax credit for electric vehicle charging stations and equipment that had expired is back, albeit with some changes. If you install a home EV charging station, the tax credit is 30% of the cost of hardware and installation, up to $1,000. Businesses that install new EV chargers or EV charger equipment can also benefit from a tax incentive of up to 30% of the total cost of equipment and installation. Certain labor and construction requirements must be met to be eligible to claim the full incentive.
The amount of the EV charger tax credit for businesses was $30,000. However, under the Inflation Reduction Act, if you completed the business installation project this year, the tax credit per property item is up to $100,000 per EV charger.
So while electric vehicle chargers are not entirely tax deductible, you might benefit. To claim the federal tax credit for your home or business EV charger, or other EV charging equipment, file Form 8911 with the IRS when you file your federal income tax return. You will need your receipts that show the purchase price of the EV charger and any fees for installation of the charger.
You will also need to know your tax liability for the year that you’re claiming the credit. That’s because the EV charger tax credit is subtracted from any federal tax that you might owe on that year’s return. Also, the EV charger tax credit isn’t refundable, so you won’t receive cash back as a result of claiming the credit.
The government has a plan is to build 100 million EV charging stations in thirty-five states. The Biden administration has indicated that the approved investment will span 53,000 miles of national highway. In mid-2024, six leading automakers intend to launch an extensive EV charger network across North America.
Refresher on how the EV Tax Credit works:
- Under the Inflation Reduction Act of last year, the EV tax credit is in place for 10 years, until December 2032, for electric vehicles placed into service this year (2023).
- The tax credit is taken in the year you take delivery of a qualifying clean vehicle.
- The credit is up to $7,500 for new vehicles. The credit amount considers factors like the vehicle’s sourcing and assembly (which must primarily be in North America for the full credit) and when you placed your vehicle into service. (More on all of that below.)
- Certain used/previously owned EVs can qualify for a tax credit of up to $4,000 or 30% of the sales price (whichever is less).
- Beginning in 2024, you can take the EV tax credit as a discount when purchasing the vehicle.
- Remember there are income limits!
CONTACT US: The clean vehicle credits are exciting news for taxpayers looking to go green, but things still remains fairly complicated and nuanced with plenty of requirements. If you’re confused about your eligibility or want guidance for your personal situation, consider consulting with your qualified TFG CPA! Contact us at CPA@fuoco.com.
