Receive Tax Credit for Your Plug-In Electric Vehicle

According to the Internal Revenue Code §30D, you can obtain a tax credit for having acquired a Qualified Plug-In Electric Drive Motor Vehicle. The credit applies to passenger vehicles and light trucks. If you acquired the vehicle after December 31, 2009, you will receive a credit of $2,500. You will also receive an additional $417 for a vehicle that gets propulsion energy from a battery with a minimum of five kilowatt hours of capacity. Moreover, you will receive another amount of $417 for every kilowatt hour of battery capacity that is greater than five kilowatt hours.

The maximum amount of the credit that is permitted for a vehicle is $7,500. The credit starts to phase out when a minimum of 200,000 qualifying vehicles are sold in the United States. It begins in the second calendar quarter following the calendar quarter in which at least 200,000 vehicles were sold for use in the U.S. The phase-out applies to sales that occurred after December 31, 2009.

§30D was initially enacted as part of the Energy Improvement and Extension Act of 2008. It was amended by the American Recovery and Reinvestment Act of 2009 for vehicles obtained after December 31, 2009. §30D was also amended by the American Taxpayer and Relief Act (ATRA) of 2013 regarding specific 2- or 3-wheeled vehicles obtained after December 31, 2011 and prior to January 1, 2014.

In order to take advantage of the credit, you are required to obtain the vehicle for the purpose of using or leasing it, and not for resale. Another requirement is that the taxpayer must be the first person to use the vehicle, and usage of the vehicle must take place mostly in the U.S. Furthermore, title to the vehicle must pass to the taxpayer in accordance with state law in order for the vehicle to be considered to be acquired by the taxpayer.

If you acquired your qualifying vehicle within the first two quarters of the phase-out period, then you are eligible for 50% of the credit, and if you obtained your vehicle within the third or fourth quarter of the phase-out period, then you are eligible for 25% of the credit. However, if you acquired the vehicle after the phase-out period, then you are ineligible for the credit.