You may be wondering what is an electric car federal tax credit. The US government provides people incentives to switch from gas to electric cars and will give you up to a $7,500 tax credit to make the change. This article will cover why there is an electric car tax credit, who qualifies for it, and how it works.
Why a Tax Credit for Electric Cars
With all the talk of climate change and countries needing to curb their emissions, switching from gas to an electric car can help. Transportation contributes 29% of total emissions, with cars being a leading contributor. According to the US Department of Energy, the average gas car produces 11,435 pounds of carbon emissions each year. In contrast, the average electric car produces only 3,774 pounds of emissions per year. By providing an electric car federal tax credit, the government is curbing carbon emissions, reducing our dependence on foreign oil, and helping fight climate change.
Who Qualifies for the Tax Credit
To qualify for the electric tax credit, you need to meet the following criteria.
- Purchased a car or truck that weighs less than 14,000 pounds and draws energy from a battery of at least four kilowatt-hours.
- You must have purchased a new electric car on or after 2010 and be the original owner.
- Only the first 200,000 electric vehicles sold by manufacturers will qualify for a rebate.
Electric car federal tax credits can range from $7,500 to $2,500. The closer a manufacturer gets to selling 200,000 electric cars, the smaller the tax credit becomes. You can get the latest availability on electric car federal tax credits by visiting the Department of Energy website or visiting Electric Driver. Beyond tax credits, you should also look into electric car rebates and tax credits from your state and utilities.
What Cars Qualify for the Tax Credit
To find what vehicles are, get an electric car federal tax credit; the Energy Department has a list of eligible vehicles. Also, keep in mind that carmakers that have sold over 200,000 electric cars do not qualify for the tax credit. For example, if you buy a Tesla, you do not get any federal tax credits. Instead, look to newer electric car makers or traditional carmakers starting to make electric cars like Ford. Electric Driver lists which vehicles are eligible for the electric car federal tax credit.
How Do I Claim My Tax Credit
To claim your electric car federal tax credit, you will need to fill out IRS form 8936 when you file your taxes. Typically you would file for the electric car tax credit when the same year you bought your electric car. However, in some cases, you may be able to amend your tax return and file it later. You have up to three years to file for the electric car federal tax credit. You can learn more about the electric car federal tax credit eligibility on the IRS website.
Other Electric Car Incentives
Beyond federal tax credits, there are other incentives available for electric vehicles. For example, back in 2018, when I bought my electric car, my local electric utility provided electric car incentives. Specifically, the electric utility provider at the time offered a $500 electric car credit and another $500 rebate for buying an electric car charger. Keep in mind that offers change, so you need to research what rebates and incentives are available in your area. You can learn more about state and local rebates by visiting the Department of Energy website and your local electricity provider.