An electric car rebate is a huge incentive to purchase an electric vehicle (EV) or a plug-in electric vehicle (PEV). The federal government is fueling the carbon-conscious push to go green by offering some attractive incentives in hefty tax credits. Coupled with state rebates and extra incentives for installing electric vehicle charging stations, going green and driving an electric car may be affordable.
It can be daunting if you’ve ever attempted to read the tax code. The rules concerning electric vehicles and electric vehicle charging stations are complex, to say the least. Luckily, we’ve got a breakdown of the state and federal electric car rebates and incentives.
Continue reading the article below to learn more about federal incentives and see if you can qualify for an electric car rebate in your state.
Electric Car Rebate on the Federal Level
You may have heard that the electric car rebate from the federal government is up to $7,500. The keywords here are ‘up to,’ which depends on what type of electric vehicle you purchase and its battery capacity.
The way the tax code reads, the rebate is $2,500 plus $417 for a battery capacity of up to five kilowatt-hours. You’ll also garner another $417 for every kilowatt-hour over five of battery capacity. This tax credit maxes out at $7,500.
To qualify for the electric car rebate, your electric vehicle must also meet clean energy emission standards, recharge on an external energy source, and be driven primarily in the United States. Many newer model vehicles have battery capacities that max out the tax credit.
Limitations on Federal Electric Car Incentives
The federal tax credit for purchasing an electric vehicle is a dollar-for-dollar reduction on your taxes owed, but they will not give you an overage refund. For instance, if you qualify for the full $7,500 tax credit but only owe $4,000 on your income taxes, the government will not give you a $3,500 refund. Your tax credit will cancel out the amount you owe, and that’s it.
Before you run out and buy an electric vehicle, you should also know that the credit phases out for manufacturers who have sold at least 200,000 electric cars. Some of the most popular manufacturers have reached that number.
State and Utility Incentives
State and utility incentives for electric vehicles and electric vehicle charging stations are typically much more straightforward than the federal tax code. Of course, they vary from state to state and county to county. Many offer substantial rebates and incentives to install a charging station for your new electric vehicle.
California offers a $750 cash rebate for the purchase of an electric vehicle under the Clean Fuel Reward Program. Many states and localities also offer an electric car rebate. Here’s an interactive map of state incentives from the US Department of Energy.
There are also some grant programs available, and utility companies offer substantial incentives and reduced charging rates when grid demand is low. Some utility companies offer rebates and their motivations for installing a charging station at your home.
You’ll have to contact your locality to see what programs are available to you. Some may even offer a lower rebate to purchase a used electric vehicle, although that isn’t as common. Don’t assume that you won’t qualify for an electric car rebate if you buy a hybrid car.
Many hybrid vehicles qualify for all the same tax credits and state rebates, while some qualify for a reduced rate. Again, many factors determine the incentives that determine the exact amounts.
Going Green Has Many Advantages
The benefits of going green and purchasing an electric vehicle are substantial, no doubt. Perhaps the most significant advantage besides an electric car rebate in the form of a dollar-for-dollar tax credit is your peace of mind knowing you’ve reduced your family’s carbon footprint on the world.
You’re doing your part to ensure the air is a little cleaner and the future is a little brighter for the next generation. All the other stuff like state and localized incentives for purchasing a vehicle that runs on electricity is just icing on the cake.