Tax Breaks for Electric Vehicles

New plug-in electric vehicle buyers can recieve federal credits totalling $7,500. Certain electric scooters and motorcyles with 2 or 3 wheels may qualify for federal credit of up to $2,500.

Plug-In Electric VehiclesPlug-in electric vehicles using certain types of batteries may qualify for a new tax credit. The Emergency Economic Stabilization Act of 2008 (EESA) and the American Recovery and Reinvestment Act of 2009 (ARRA) created two new tax credits for various types of electric vehicles, which may include what are commonly referred to as neighborhood electric vehicles. The Taxpayer Relief Act of 2012 extended a tax credit for two- or three-wheel electric vehicles, such as motor scooters, purchased after Feb. 17, 2009, and before Jan. 1, 2014. The amount of the credit is 10 percent of the cost of the vehicle, up to a maximum credit of $2,500. To qualify, a vehicle must be a two- or three-wheeled vehicle that is propelled to a significant extent by a rechargeable battery with a capacity of at least 2.5 kilowatt hours.

EESA created a tax credit for vehicles that have at least four wheels and draw propulsion using a rechargeable traction battery with at least four kilowatt hours of capacity. For 2009, the minimum credit is $2,500 and the credit tops out at $7,500 to $15,000, depending on the weight of the vehicle and the capacity of the battery.

Plug-in Electric VehiclesCertain new qualified plug-in electric drive motor vehicles may qualify for credit amounts ranging from $7,500 to $15,000, depending on the gross vehicle weight rating of the vehicle.

The new qualified plug-in electric drive motor vehicle credit will being to phase out after a manufacturer has sold more than 250,000 qualifying vehicles for use in the United States.

Some of the better known qualifying vehicles include:

◦Chevy Volt
◦Nissan Leaf
◦Ford Focus Electric
◦Ford C-MAX Energi
◦Ford Fusion Energi
◦Mitsubishi i-MiEV
◦Toyota Prius Plug-in Electric Drive Vehicle
◦Toyota RAV4 EV
◦Wheego LiFe Electric Vehicle
◦smart fortwo Electric Drive Vehicle

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