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Income tax & accounting solutions
322 Lanza Ave
Garfield, NJ 07026
(973) 894-3390
Qualified Plug-In Electric Drive Motor Vehicles (IRC 30D)
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Internal Revenue Code Section 30D provides a credit for Qualified Plug-in Electric Drive Motor Vehicles including passenger vehicles and light trucks. For vehicles acquired after 12/31/2009, the credit is equal to $2,500 plus, for a vehicle which draws propulsion energy from a battery with at least 5 kilowatt hours of capacity, $417, plus an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours. The total amount of the credit allowed for a vehicle is limited to $7,500.
The credit begins to phase out for a manufacturer’s vehicles when at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009). For additional information see Notice 2009-89.
Manufactures of the vehicles listed below have provided appropriate information and have received from the Service acknowledgement of the vehicles eligibility for the credit and the amount of the qualifying credit. The list of qualified vehicles provided below applies only to vehicles acquired after December 31, 2009.
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Index to Manufacturers
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American Honda Motor Co., Inc.
Boulder Electric Vehicles, Inc.
Electric Vehicles International
FCA (Fiat Chrysler Automobiles) North America Holdings LLC
Mitsubishi Motors North America, Inc.
Porsche Cars North America, Inc.
Smart USA Distributor LLC -- (see Mercedes Benz)
Volvo Cars of North America LLC
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Check For State and Local Credits and Perks Too
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A lot of cities offer special parking or free charging stations for electric cars, and many states offer additional tax credits for qualifying electric vehicles. For example, Colorado offers up to $5,000 in tax credits for qualifying electric cars, which include not just newer electric vehicles, but also cars converted from gasoline to electricity. Check your state’s laws to see if there are additional tax credits available for you.
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Qualifications and Limitations
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The electric car and vehicle tax credit cannot be passed on from the original owner; it’s only eligible on new vehicles. So if you’re buying a used car, the tax credit will not apply. Also, be aware that the tax credit goes to the name on the title of the vehicle. If you’re leasing the car, the leasing company will be the one to receive the credit. However, most leasing companies pass this credit on to the consumers by factoring it into the price, which in turn lowers the monthly payments.
The electric car and vehicle tax credit is a non-refundable credit. So if your tax liability is $4,000 and you receive the credit for the full $7,500, you’ll be able to reduce the amount you owe to zero, but you won’t get a refund for the difference (in this case, $3,500). The tax credit must be claimed the year you buy the car and cannot be carried over from year to year or claimed more than once.
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