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Get Plugged In to Electric Vehicle Tax Credits Before They’re Gone

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Have you purchased an electric vehicle recently? If so, you’ll want to claim the tax credit on it before they’re gone!

Internal Revenue Code Section 30D provides a credit for qualified plug-in electric drive motor vehicles including passenger vehicles and light trucks. However, the credit begins to phase out when at least 200,000 qualifying vehicles manufactured by an automaker have been sold in the United States.

Click here to see the list of eligible vehicles and the amount of the qualifying credit by manufacturer. The credit is not refundable, and any unused credit is lost. State and/or local incentives may also apply.

As of now, there is no credit for Tesla vehicles purchased after December 31, 2019, or General Motors vehicles purchased after March 31, 2020.

The vehicle must meet the following requirements to be eligible for the credit:

  • It must be made by a manufacturer (it doesn’t include conventional vehicles converted to electric drive).
  • It must be treated as a motor vehicle as stated in the Clean Air Act.
  • It must have a gross vehicle weight rating of no more than 14,000 pounds.
  • It must be propelled to a significant extent by an electric motor which draws electricity from a battery which:
    • has a capacity of not less than 4 kilowatt hours, and
    • is capable of being recharged from an external source of electricity.
  • The original use of the vehicle begins with the taxpayer, meaning it must be a new vehicle.
  • The taxpayer acquires it to use, not turnaround to resell. The credit is only available to the original purchaser of a new, qualifying vehicle. Note: If a qualifying vehicle is leased to a customer, the leasing company may claim the credit.
  • It must be used mostly in the United States.
  • The taxpayer must have used it during or after the 2010 calendar year.

If you need assistance in claiming this credit, talk with your Ericksen Krentel professional or contact us by clicking here.

Staff Accountant Svitlana Baranivska contributed to this report

About Ericksen Krentel

Ericksen Krentel CPAs and Consultants, founded in New Orleans, Louisiana in 1960 with offices in New Orleans and Mandeville, believes that serving as the clients’ most trusted adviser is grounded in going beyond the numbers.

That includes helping clients achieve their business and personal financial goals by providing innovative and exceptional services in the following areas: audit and assurance services, tax compliance and planning, outsourced CFO services and business valuations for a variety of industries; employee benefit plan audits; fraud and forensic accounting; business planning; IT consulting; loss calculations; and estate planning.

Learn more at www.ericksenkrentel.com.

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