Many people purchase an electric vehicle due to environmental considerations. There’s an added bonus, though, when you “go green”: You may also be eligible for a tax credit called the Plug-In Electric Drive Vehicle Credit.
This tax credit covers a car or truck that:
- Has at least four wheels
- Has a gross weight under 14,000 lbs
- Runs on a battery with a minimum of 4 kilowatt hours
- Has a battery that can be plugged in and recharged via an external source
To qualify for the Plug-In Electric Drive Vehicle Credit, you must have purchased your vehicle in or after 2010 and started driving it in same year you’re claiming the tax credit. In other words, you can’t claim the credit for an electric vehicle you bought and started driving three years ago, but you can claim it for an electric vehicle you bought and started driving this year.
The amount of the tax credit ranges from $2,500 to $7,500 depending on how much power the battery holds. No matter where your vehicle falls in that range, though, the Plug-In Electric Drive Vehicle Credit is big enough to make a noticeable difference on your tax return!
You’ll also want to be aware that the tax credit does phase out based on the vehicle manufacturer’s production volume of qualified vehicles. That means that some otherwise qualifying vehicles may not be eligible for the full tax credit.
If you want to find out more about the Plug-In Electric Drive Vehicle Credit and how much you can expect to claim on your tax return, call Taxation Solutions, Inc. today. As seasoned tax professionals serving Austin, we have a wealth of knowledge, resources, and experience at our disposal to help you become an informed taxpayer regarding this and other tax credits. Contact us now!