This is holiday season and in a way gift seasons for all ! So here is an idea that will not only be a great gift idea but also pay you back in form of tax credit . The idea is simple -buy electric cars (EVs) as the federal government and a number of states offer tax credits for purchasing electric cars also known as plug-in electric vehicles.
How Much Tax Credit for Buying Electric Car ?
The federal Internal Revenue Service (IRS) tax credit is for $2,500 to $7,500 per new Electric Vehicle purchased for use in the U.S.A. The tax credit amount is dependent on the size of the vehicle and its battery capacity. You can find out specific tax credit amounts for individual vehicles, from here.
Second thing to know is that the credit is non-refundable. In other words ,it can only offset your actual tax liability and that any excess credit over your tax liability will be lost. However , if you use the electric vehicle partially for business, in which case the portion of the credit allocated to the business use will become a general business credit that is carried back one year and then carried forward.
Just Buying Won’t Give You Tax Credit
As per the IRS rules , merely ordering the electric vehicle even paid fully, won’t be enough – you will need to receive the car and start using it before New Year’s Day.In other words, you qualify to claim the tax credit for Electric Vehicle purchase-whether for self or spouse -on your 2018 tax return, only if the electric vehicle was “placed in service” by December 31, 2018.
Form for Credit on Electric Vehicle Purchase
You need to fill out electric car credit form no IRS Form 8936 then claim the credit on the appropriate line of your income tax return Form 1040, . For vehicles purchased in 2010 or later, this credit can be used toward the alternative minimum tax (AMT).
Do I get Any Incentive from State on Purchase of Electric Vehicle?
The answer is Yes. Various states provides monetary and non-monetary incentive on plug-in electric vehicles. use . So , you may also be eligible for Electric Vehicle incentives from your state if your state provides it.The incentives can be :
- Monetary or
- additional tax credits,
- vehicle or infrastructure rebates or vouchers,
- vehicle registration fee reductions,
- loans at special low-cost charging rates, and
- high-occupancy vehicle lane exemptions.
To search all laws and regulations relevant to EVs, including businesses, visit here