Federal Incentives
Electric Vehicle Tax Credit
Federal Tax Incentives are available for select electric vehicles (up to $7500 for certain models). Here are the highlights of the program:
Point-of-sale rebate option - qualified buyers can now claim the tax credit as a rebate at the time of purchase!
Income caps - modified adjusted gross income (AGI) must be under $300,000 (married couples filing jointly), $225,000 (heads of household), and $150,000 (all others).
Qualifying Vehicles
Purchase price limits: $55,000 for cars and $80,000 for SUVs and trucks.
For the latest list of vehicles, visit www.fueleconomy.gov.
Pre-owned EV Tax Credit
Pre-owned EVs also qualify for a tax credit of $4000 or up to 30% of the price. Tax credit requirements:
Price limit of $25,000.
Income (AGI) cap of $150,000 for households and $75,000 for individuals.
The vehicle must not have been sold as a used car previously.
Vehicles must be purchased through a vehicle dealership, including online dealers like KeySavvy (a licensed dealer that can facilitate transactions between private parties).
EV Lease Tax Credit
EV leasing continues to allow for a tax credit benefit. In this case, a dealer may include the credit in the lease (be sure to ask). The dealer applies for the credit. Leasing an EV offers a lot of flexibility.
No restrictions on income
No vehicle price thresholds
No manufacturing and sourcing requirements
Medium-Heavy Vehicle Tax Credit
A tax credit of up to $40,000 is available to businesses and tax-exempt organizations for vehicles with a gross vehicle weight rating of 14,000 pounds or more.
Some highlights:
The vehicle must be used for business.
The vehicle must be a plug-in or fuel-cell electric.
Domestic battery manufacturing content requirements don’t apply
For more information, visit www.irs.gov/credits-deductions/commercial-clean-vehicle-credit.
Federal Tax Credits for EV Charging Stations
Residential - 30% up to $1000 per EV charger
Commercial - Up to $100,000 per EV charger. Requirement for the site to be in low-income or non-urban areas.
Details can be found at www.irs.gov/credits-deductions/alternative-fuel-vehicle-refueling-property-credit#amount
Photo courtesy of Roger Starnes Sr.
Additional Resources
Hawaii Incentives (2024) - hawaiiev.org/hawaii-incentives
IRS - Credits for new EVs - www.irs.gov/credits-deductions/manufacturers-and-models-for-new-qualified-clean-vehicles-purchased-in-2023-or-after.
Plug In America Inflation Reduction Act Summary pluginamerica.org/inflation-reduction-act-ira-ev-incentives-explained/
Electrification Coalition Fact Sheet www.electrificationcoalition.org/wp-content/uploads/2022/08/SAFE_1-sheet_Webinar.pdf
Rules on Credits afdc.energy.gov/laws/electric-vehicles-for-tax-credit and fueleconomy.gov.
U.S Treasury FAQs on the Electric Vehicle Tax Credit irs.gov/newsroom/frequently-asked-questions-about-the-new-previously-owned-and-qualified-commercial-clean-vehicles-credit
Rules are subject to change and applicability is situational, consult with your accountant or tax attorney for specifics.
