Federal tax credits for electric vehicles

Hybrid electric vehicle (HEV) Federal Tax Credits

The Internal Revenue Service has acknowledged the certification of vehicles that qualify for the hybrid tax credit enacted by the Energy Policy Act of 2005. The tax credit for hybrid vehicles applies to vehicles purchased on or after January 1, 2006, and may be as much as $3,400 for those who purchase the most fuel-efficient vehicles.

Starting in 2006, this tax credit replaced the tax deduction of $2,000 which was previously allowed for taxpayers who purchased a new hybrid vehicle before December 31, 2005 for the clean-burning fuel deduction. The tax credit requires a different certification. Many currently available hybrid vehicles may qualify for this new tax credit.

Consumers seeking the credit may want to buy early since the full credit is only available for a limited time. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50% of the credit. For the fourth and fifth calendar quarters, may claim 25% of the credit. No credit is allowed after the fifth quarter.

Plug-in electric vehicle (PEV, BEV, PHEV, EREV) Federal Tax Credits

"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." -www.irs.gov

The following tax credits apply:

2011 Model Year Vehicles

MY2011 Hybrid electric vehicles - See the list of vehicles that qualify for federal tax credits

MY2011 Plug-in electric vehicles - See the list of vehicles that qualify for federal tax credits

2010 Model Year Vehicles

2009 Model Year Vehicles

2008 Model Year Vehicles

2007 Model Year Vehicles

2006 Model Year Vehicles