Did you purchase a plug-in electric vehicle this year? If so, you may have the chance at some great tax breaks when it comes time to file.
There are two types of tax credits available for electric cars, though you can only claim one credit per vehicle (even if your vehicle qualifies for both). Let’s do a quick run-down of each type of tax credit you can get.
- Credit for the Purchase of a Plug-In Electric Vehicle: From 2010 on, the purchase of an electric vehicle will net you a tax credit of $2,500 as a baseline figure. This credit can go up when you consider the battery capacity of the car. For example, say you bought a car that has a battery capable of carrying 8 kilowatt-hours (kWh) of charge. You’ll get the base of $2,500 for buying an electric car and $417 additional dollars for the capacity being greater than 5 kWh.
The great part is that this $417 battery capacity bonus is also applied for each kWh of capacity over 5. This means you’ll get the bonus once just for having a capacity over 5 kWh; then you receive an additional bonus for every kWh of capacity above 5. For an electric plug-in vehicle that has an 8 kWh capacity, you’ll receive this bonus a total of 4 times.
However, be mindful that the maximum amount this credit can be is $7,500.
This credit is available until 200,000 electric cars have been sold from each manufacturer, so check into it!
- Low-Speed, Three-Wheeled, or Motorcycle Credit: For the purchase of a vehicle matching this description, you can get a credit for 10% of the purchase price, with a maximum of $2,500.
Those are some great perks for helping the environment! Give Taxation Solutions, Inc. in Virginia Beach a call with any questions. We’re happy to help!