by: Maruf Hossain
From sales tax breaks to discounts on charging equipment, you’ll get plenty of exciting benefits as an EV owner.
To qualify for the credit, you’ll need to have purchased your EV—a passenger vehicle or a light truck—after December 31, 2009. The credit is $2,500. Currently, all new, battery-electric vehicles for sale in the U.S. are eligible for the full credit. Vehicles that are pre-owned or those that have been converted from gas to electric are not eligible.
So how do you get the $7,500 credit? You’ll fill out a special form when it’s time to do your taxes, IRS Form 8936, and you’ll include the form with your tax return. You can use the credit to offset what you owe on your taxes. For example, if you owe $8,000 in taxes for the year, you’ll only end up paying $500 out of pocket. However, if you owe just $3,000, the credit will cover that, but you can’t carry over the difference into the following tax year.
The credit start to phase out for a given vehicle once 200,000 qualifying vehicles are sold for use in the U.S. Car manufacturers are burning through the credits at different paces, and credits will eventually phase out. Nissan, maker of the Leaf, is about halfway through its credit allotment, and General Motor, who make the Chevy Bolt, is expected to run out of credits in late 2018 or in 2019. Read more about how tax credits are starting to dry up. For more information, see Notice 2009-89.
Individual states can also offer big benefits for EV owners, including state tax credits, discounts on charging units, special HOV access, electricity and insurance discounts, and sales tax exemptions when purchasing a vehicle. It’s different for every state.
A good place to start is by reviewing this interactive state map. Be forewarned though, EV benefits are constantly in flux. New ones are often being added, while others are discontinued as funding for the programs runs out.
Do your homework by going to official state websites to make sure perks are still in play—your state’s motor vehicle department website, or the official website for your state. Here are a few snapshots of what states are currently offering:
HOV access. Drivers of approved plug-in EVs can pop into Maryland’s HOV lanes at all times, even if they’re traveling alone. Vehicles must be able to travel at a maximum speed of at least 65 mph, and drivers need to display a permit issued by the Motor Vehicle Administration. If you’re planning to purchase a plug-in EV from a Maryland dealer, the dealer can issue you an HOV permit when you buy. Otherwise, you’ll have to fill out a form: Application for Plug-in Electric/Hybrid Electric Vehicle HOV Permit(form VR-335). Read more here.
Past incentives. Electric vehicles in Maryland will once again be eligible for a one-time excise tax credit of up to $3,000, as of July 1 after its governor signed a three-year extension of the state’s electric-car tax credit.
Purchasing discounts. Rebates of $3,500 are available for buying or leasing a new battery electric vehicle or Vehicle to Grid (V2G) capable vehicle with a sticker price of up to $59,999. Battery electric vehicles with a sticker price over $60,000 will only be eligible for a $1,000 rebate, according to the state.
Equipment rebate. The Delaware EV Charging Equipment Rebate Program extends a rebate for new Level 1 or Level 2 chargers up to $500 at a commercial or residential location. The program defines a workplace as an employer with 15 or more employees in a non-residential place of business. The rebate applies to equipment purchased between Nov. 1, 2016 and June 30, 2018.
Retrofitting discounts. Rebates of $1,500 are available for retrofitting an internal combustion engine into an electric vehicle.
Purchasing discounts. New Jersey residents get a sales tax exemption for buying or leasing an electric vehicle in the state
HOV access. Electric vehicles in New Jersey are eligible to use the HOV access lanes on the New Jersey Turnpike.
Toll discounts. Electric vehicles are eligible for a Green Pass Discount, which gives a 10% discount on off-peak toll prices for the New Jersey Turnpike and the New Jersey Garden State Parkway.
Other perks. Some commercial and public buildings offer parking for electric vehicle customers only. The NJ Workplace Charging Grant Program offers employers up to $250 for buying and installing a Level 1 charging station, and up to $5,000 for a Level 2 charging station. All funding for the program has currently been allocated, however, applications for a waitlist are being accepted in anticipation of additional funding becoming available.
HOV access. EVs are eligible for HOV lanes on I-64 and I-264 with proper Clean Special Fuel Vehicle Plate displayed.
Other perks. Illinois offers discounted vehicle registration fees to residents who drive an electric vehicle: $35 for two years.
Past incentives. The Illinois Electric Vehicle Charging Infrastructure Rebate Program, which had offered up to 50% of the installation cost of a domestic electric vehicle charging station up to a total of $3,000, is currently suspended. The state has also suspended its Alternative Fuel Rebate Program, which offered a rebate of up to $4,000 for EV owners.
Purchasing discounts. California residents get up to $7,000 for the purchase or lease of a new, eligible zero-emission or plug-in hybrid light-duty vehicle through the Clean Vehicle Rebate Project. Income caps apply. Currently, consumers are not eligible for CVRP rebates if their gross annual incomes are above 150,000 for single filers, $204,000 for head-of-household filers and $300,000 for joint filers. Read more about eligibility.
HOV access. EVs are eligible for Clean Air Vehicle Decals, which allow single occupants access to HOV lanes.
Equipment perks. California residents can access Property-Assessed Clean Energy (PACE) financing to install EV supply equipment. The program offers long-term private financing for renewable energy and energy efficiency upgrades.
Purchasing discounts. The Charge NY initiative offer electric car buyers the Drive Clean Rebate of up to $2,000 for new purchases.
Equipment perks. As of 2013, New York State provides an income tax credit for 50% of the cost, up to $5,000, for the purchase and installation of alternative fuel vehicle refueling and electric vehicle recharging stations. The credit is available through December 31, 2017, and is targeted at commercial and workplace charging stations
HOV access. Through the Clean Pass Program, EVs may use the Long Island Expressway High Occupancy Vehicle (HOV) lanes. The Port Authority Green Pass Discount Plan offers a $6.25 off-peak toll rate to vehicles in the Clean Pass Program.The New York State Thruway’s Green Pass Discount Plan also offers a 10% discount on the E-ZPass rates to vehicles in the Clean Pass Program.
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