U.S. Rebates and Tax Credit For Electric Vehicle Charging
Federal and State governments are increasing rebates and tax incentives for the purchase installation of EV chargers. The incentives are for level 2 EVSE e.g. hardwired, NEMA 15-40 or NEMA 6-50 EV charging equipment installed in home, commercial or business settings. They often exclude level 1 NEMA 5-15 and NEMA 5-20 EV plug types.
There is a lot of variation by State. We also recommend checking available EV charging credits and rebates that are provided by local utility companies (particularly in California, Arizona, Connecticut, Colorado, Florida, Massachusetts, Michigan, New York, Oregon, Vermont and Washington), which can include rebates on level 2 EV charging installations and specific time of use (TOU) electricity rates i.e. cheaper charging at certain times of day.
Below is list of federal tax credits and rebates, as well available electric tax credits and rebates, by state. Please let us know of any additional rebates that we are not aware of at [email protected]
Another useful link for 2023 for available EV tax credits is at https://pluginamerica.org/policy/what-you-need-to-know-about-2023-ev-tax-credits/
Federal Incentives – Electric Vehicle Purchase
The Inflation Reduction Act of 2022 amended which electric and plug-in hybrid vehicles would quality for the federal tax credit (previously the Motor Vehicle Credit now the Clean Vehicle Credit). The law was amended such that only vehicles assembled in North America (50 states plus District of Columbia, Puerto Rico, Mexico and Canada) would qualify for a rebate.
If you purchased a new electric vehicle, you may be eligible for a credit of up to $7,500 under IRS code 30D. Previously owned clean vehicles (AKA “used vehicles”) are eligible for a tax credit of up to $4,000. The rules for this credit applies to vehicles purchased between 2023 until 2032. The credit is available for individuals and businesses. The base amount is $2,500 plus $417 for every additional kilowatt hour (kWh) in excess of 5kWh based on the vehicle battery size (kWh). GM and Tesla vehicles are now also eligible since the previous sales volume quota no longer applies.
To qualify, you must:
- Buy it for your own use, not for resale and the vehicle must be new (used vehicles see further down the article)
- Use it primarily in the U.S.
- Your modified adjusted gross income (AGI) may not exceed:
- $300,000 for married couples filing jointly (or filing as a qualifying surviving spouse or a qualifying widow(er))
- $225,000 for heads of households
- $150,000 for all other filers
- The battery must exceed 7 kwh (in practice 99.99% of vehicles)
- Be produced by a qualified vehicle manufacturer. See the IRS index of qualified manufacturers and vehicles. These manufacturers entered into a written contract with the IRS.
- The vehicle’s manufacturer suggested retail price (MSRP) can’t exceed $80,000 for vans, sport utility vehicles and pickup trucks and $55,000 for other vehicles
These vehicles currently qualify for the tax credit (not exhaustive) and we’ve listed their respective MSRP caps. Please check the IRS page for more information
- Audi Q5 TFSI e Quattro – $80,000
- Other resources:
- BMW X5 xDrive 45e – $80,000 cap
- Cadillac Lyriq – $55,000 cap
- Chevrolet Bolt EV/EUV – $55,000
- Ford F-150 Lightning – $80,000
- Ford Mustang Mach-E – $55,000
- Ford E-Transit – $80,000
- Nissan Ariya – $55,000
- Nissan Leaf – $55,000
- Rivian R1T – $80,000
- Rivian R1S – $80,000
- Tesla Model 3 – $55,000
- Tesla Model Y – 5-seat variation has $55,000 cap while 7-seat variation has $80,000 cap
- Volkswagen ID.4 – Pro/Pro S/S have $55,000 cap and AWD Pro/AWD Pro S have $80,000 cap
How to Claim the Credit
- To claim the credit, file Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-in Electric Vehicles) with your tax return. You will need to provide your vehicle’s VIN on your income tax return
- Dealer should provide reports to you (the Taxpayer) and the IRS following vehicle sale.
Ensure the dealer or seller
- The seller (dealer, car franchise) must report mandated information to you at the time of sale and to the IRS.
- Sellers are required to report your name and taxpayer identification number to the IRS in order to ensure eligibility for the tax credit in the subsequent tax year. Follow-up with your deal since administration post purchase can be patchy!
Other resources
- For more information go to the Inflation Reduction Act of 2022 information page
- List of Manufacturers and Models for New Qualified Clean Vehicles (Internal Revenue Service)
- VIN decoder for vehicle build location information (Department of Energy)
Used Vehicles
For used electric vehicles, a tax credit is available but not as much as that available for new vehicles under the Inflation Reduction Act. A previously owned, used EV or plug-in hybrid tax credit is up to $4,000 or 30% of the vehicle sales price, whichever is less.
For vehicles purchased prior to 2023 for example in tax year 2022, please go to https://www.irs.gov/credits-deductions/manufacturers-and-models-for-new-qualified-clean-vehicles-purchased-in-2022-and-before
Federal Incentives – EV Charging Infrastructure Tax Credit
The federal tax credit on charging equipment has been extended through 2032. For individual/residential uses, the tax credit remains unchanged at 30%, up to $1,000. For commercial uses, the tax credit Is 6% with a maximum credit of $100,000 per unit (up from $30,000 per property).
