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Applying for Electric Vehicle Tax Credit

by Carmen PickelJuly 22, 2021,
Applying for Electric Vehicle Tax Credit

Electric cars are the future of transportation. They're cleaner, quieter, and more affordable than traditional gas-powered vehicles. You can save money on fuel, reduce emissions from your vehicle, and even help protect our planet by driving an electric car. There is a variety of models with different ranges for electric vehicles so you can find one that fits your needs best

 If you are selling electric vehicles in the US, you will be entitled to a state incentive of $2500 - $7500 through the state’s clean vehicle rebate program in California, effective January 1st, 2020. If you have ownership of an electric motor vehicle, and you’re using it for everyday chores, you can also claim the tax credit that is $7500.

In the rest of the US, the current maximum tax credit is $7500 with no maximum price and currently phases out for individual automakers once they hit 200,000 electric vehicles sold. Another bill is on its way that would limit tax credits to vehicles with a retail price below $80,000 to qualify for the tax credit.

If you are leasing the EV, the tax credit goes to the manufacturer that's offering the lease, not you. The carmaker will likely factor the credit into the cost of the lease to lower your monthly payment, but it isn't mandatory.

To claim this tax credit, you can use Form 8936 to figure your credit claim for your plug-in electric drive motor vehicle. The following requirements must be met to qualify for the credit.

  • You are the owner of the vehicle. If the vehicle is leased, only the lessor and not the lessee is entitled to the credit.
  • You placed the vehicle in service during your tax year.
  • The vehicle is manufactured primarily for use on public streets, roads, and highways.
  • The original use of the vehicle began with you.
  • You acquired the vehicle for use or to lease to others, and not for resale.
  • You use the vehicle primarily in the United States.

Some exceptions to these requirements are if you are a seller of a qualified plug-in electric vehicle company for tax exemption, you can only claim the credit when you clearly disclose in writing to the purchaser the amount of the tentative credit allowable for the vehicle.

Visit us at www.lakevillemotor.com to know more about electric cars and their benefits.

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