The EV charger tax credit is back (at least for now), thanks to the Inflation Reduction Act (IRA) — massive climate, energy, tax, and healthcare legislation passed during the Biden administration.
You may have heard that the IRA contains billions of dollars in tax incentives, including a tax credit for new and used electric vehicles. But the IRA also brought back the EV charger federal tax credit for electric vehicle charging stations and equipment that had expired a few years before the IRA was enacted.
To take advantage of the tax break, there are some changes to the EV charger federal tax credit that you will want to be aware of.
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So, here’s what you need to know about those changes and how actions from the Trump administration are impacting prior proposals for high-powered EV charger networks.
Related: Point of Sale EV Tax Credits Are a Hit
EV charger tax credit: Is an electric car charger tax dedutible?
As mentioned, the federal tax credit for electric vehicle chargers originally expired more than a few years ago. However, the Inflation Reduction Act’s Alternative Fuel Refueling Property tax credit extended the EV charger tax incentive through Dec. 31, 2032.
So, what does that mean for you? Essentially, if you install a home EV charging station, the tax credit is 30% of hardware and installation costs, up to $1,000. Also, as of last year, the EV charger tax credit for business and home installations applies to other EV charger equipment like bidirectional (i.e., two-way) chargers.
Businesses that install new EV chargers or EV charger equipment can also benefit from a tax incentive of up to 30% of the total cost of equipment and installation. However, they will have to meet certain labor and construction requirements to be eligible to claim the full incentive.
Related: How the EV Tax Credit Works
- Before the IRA, the limit on the amount of the EV charger tax credit for businesses was $30,000.
- That limit applies to projects that were completed before the end of last year.
- However, under the IRA, if you complete the business installation project after 2022, the tax credit per property item is up to $100,000 per EV charger.
All of that means that while electric vehicle chargers are not entirely tax deductible, you might benefit, to some degree, from the tax incentives in the Inflation Reduction Act that apply for refueling property.
How to claim the EV charger tax credit: Form 8911
To claim the federal tax credit for your home EV charger, or other EV charging equipment, file Form 8911 with the IRS when you file your federal income tax return.
- You will need your receipts that show the purchase price of the EV charger and any fees for installation of the charger.
- You will also need to know your tax liability for the year that you’re claiming the credit. That’s because the EV charger tax credit is subtracted from any federal tax that you might owe on that year’s return.
Also, the EV charger tax credit isn’t a refundable tax credit, so you won't receive cash back as a result of claiming the credit.
Biden EV charger plan
The Biden-Harris Administration had announced $623 million in grants to help build an EV charging network across the U.S. According to the administration, the national network of EV chargers was supposed to include at least 500,000 publicly available chargers by 2030.
The massive investment in EV charging stations stemmed from the Bipartisan Infrastructure Law that the Biden White House said “invested $7.5 billion to build a national EV charger network so that charging EVs is predictable, reliable, and accessible.”
However, now that Donald Trump has started his second term as president, he and his administration are taking steps to roll back clean energy incentives, including those related to the EV charger network.
In February, the Federal Highway Administration under Trump's direction, issued a directive for states to stop spending federal funds previously allocated for charging stations. The decision has created confusion and is likely to face legal challenges.
Major automakers EV charger network
Despite the Trump administration's decision to scale back its EV infrastructure, the private sector seems to be expanding and improving the network. Last year, BMW and six other leading automakers intended to launch an extensive EV charger network across North America.
As Kiplinger reported, the group, which included General Motors, Honda, Hyundai, Kia, Mercedes-Benz Group, and Stellantis NV, announced that the EV charging stations would be available to all electric vehicle customers. The stations were to offer a combined charging system (CCS) and North American charging standard (NACS) connectors.
According to a statement released, at that time, by the companies involved, a joint venture has been established to develop a minimum of 30,000 chargers.
The goal is to increase the appeal of zero-emission driving for millions of customers. Those chargers were to be installed in both urban areas and along highways.
Related: Automakers to Roll Out Massive EV Charger Network
Home solar and EV charger for home
In a related addition to the EV charger tax credit, the IRA provides incentives for the installation of home solar panels with the Residential Clean Energy tax credit. For home and residential solar product installations, the IRA allows a nonrefundable tax credit of up to 30% of the total cost.
That 30% tax credit is based on eligible expenses like solar panels, power cells, labor, permitting and developer fees, other necessary related solar equipment, batteries, and inspection costs.
Related: Should You Go Solar?
For now, the solar energy tax credit applies through December 2032. The tax credit is available for the year you complete the solar installation.
Note: The future of the solar panel tax credit is unclear given the Trump administration's stance on similar incentives in the IRA. That uncertainty has caused some to rush solar installations before any changes are made to the tax credit.
The home solar panel tax credit can be beneficial on its own, of course. But it also has potential positive implications for people interested in using solar panels to charge their electric vehicles.
That’s because if you’re eligible for both home and residential solar tax breaks and the tax credit for EV chargers and equipment, you could reap the benefits of two significant clean energy tax incentives in the IRA.
And if you’re interested in a "clean vehicle," you could be one of the consumers eligible to claim the EV tax credit for eligible new and used electric vehicles.
EV charger state rebates and incentives
In addition to the federal tax credit for EV chargers and EV charging equipment, numerous state and regional incentives are available that you might benefit from if you have a home EV charging station.
Keep in mind that the availability, amount, terms, and conditions surrounding state EV charger incentive programs vary considerably. So, it’s important to check your state to understand how the incentives work in your area.
Additionally, the U.S. Department of Energy has a searchable database on its website that can help you find state tax credits and rebates that might help offset or lower the cost of your EV charger and EV charging equipment.
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