Federal Tax Credit For EV Chargers

The Federal Tax Credit for EV charing infrastructure has been renewed until 2032

Inflation Reduction Act (IRA)

In recent years businesses and homeowners were able to file for a tax credit to offset the cost of electric vehicle chargers. This tax credit expired December 2021 and has recently been reinstated until December 31, 2032.

The Inflation Reduction Act is a law providing over $350 billion in funds to combat climate change and reduce carbon emissions. Tax credits are provided to businesses that purchase electric vehicles and electric vehicle chargers.

Overview:

Clean Commercial Vehicle Credit – 30% of the difference between previous combustion engine counterpart and new medium or heavy-duty electric vehicle (EV)

Alternative Fuel Vehicle Refueling Property Credit – 30% of total costs of purchase and installation of EVSE – $100,000 per EV charger maximum.

Existing $7,500 Light-Duty EV Credit Renewed 

Pre-owned EVs qualify for $4,000 or 30% of the sale price, whichever is lower.

IRA tax credits begin December 31, 2022.

Inflation Reduction Act Details

Read the information below to learn details about the Federal Tax Credits available as a result of the inflation Reduction Act (IRA).

Businesses can claim up to 30% of the difference between a gasoline vehicle and its equivalent EV counterpart - maximum of $40,000. If the vehicle weighs under 14,000 pounds it is considered light-duty and qualifies for $7,500 per vehicle. Tax credits cannot be sold to individuals or other companies. Eligibility is not tied to income, and EVs do not need to be assembled in North America.

This is a general business tax credit for companies that install Level 2 and DC fast chargers. The credit can offset up to 30% of total EVSE costs including installation, up to $100,000 per charger. Permitting and inspection are not eligible costs.

 

Alternative Fuel Vehicle Refueling Property Credits are only available in areas where the poverty rate is 20% or where the median family income is 80% or less than the statewide median family income.

 

Tax credits can be applied after other EV rebates and incentives to remaining cost not covered. Selling charging equipment to non-profits, government organizations, or foreign entities does not prevent resellers from claiming this credit. 

The original $7,500 Clean Vehicle Credit has been extended 10 years with a few convenient revisions:

 

  • If the vehicle's battery is assembled in North America you receive first $3,750 credit
  • If the vehicle's battery is constructed with minerals extracted in the US or a US free-trade country, or recycled in North America you receive the second $3,750 credit
  • Income limits are $150,000 per individual and $300,000 per household
  • Credits are applied at dealership during purchase
  • "Number-of-vehicles" cap which was previously 200,000 is now eliminated.

 

The used EV tax credit is new and is for people who purchase pre-owned electric vehicles. This tax credit is wort $4,000 or 30% of the vehicle sale price - whichever is lower.

 

  • Credit applied at dealership during purchase
  • $75,000-per-year income limit for individuals
  • $150,000-per-year income limit per household
  • EV must weight under 14,000 pounds and be worth less than $25,000
  • EV must be at least 2 years old at time of purchase.

Tax Credits vs. Tax Deductions

Credits and deductions are not interchangeable terms. 

Tax Credits

A tax credit is a dollar-for-dollar reduction of a person’s tax liability. If a business receives a $5,000 tax credit it decreases the taxes owed by $5,000. Tax credits are more valuable than tax deductions.

Tax Deductions

Tax deductions are subject to the taxpayer’s rate. For example, a $5,000 tax deduction is equal to $1,100 if tax payer falls into the 22% tax bracket. Tax deductions are less valuable than tax credits.

How to get the Federal Tax Credit for EV Chargers

The IRS provides full guidance online here.

To claim the 30C tax credit, submit form 8911 during the annual tax filing period. See form.

Looking for commercial EV charging solutions?

Businesses that offer patrons, guests, and employees EV charging options have a big advantage over their competitors. Learn more »