Have a New Electric Car? Don’t Forget to Claim Your Tax Credit!
Hybrid and electric vehicles have become increasingly popular, partly due to the fact that drivers can save money by purchasing one of these cars. In 2018, researchers found that operating a gas-powered car is twice as expensive as operating an electric vehicle. But, this isn’t the only way motorists can save money with a hybrid or electric vehicle. There are several tax credits available to people who have recently purchased one of these eco-friendly cars, so you could save more during tax season as well. Here’s a look at the tax credits you may be able to claim this year:
Alternative Motor Vehicle Tax Credit
People who have purchased new eco-friendly vehicles may qualify for the Alternative Motor Vehicle Tax Credit. This credit is only available to the original purchaser of a qualified fuel cell car, which is a vehicle that obtains power from cells that are capable of converting chemical energy into electricity. The vehicle must also meet certain make, model, and year conditions established by the Internal Revenue Service (IRS) in order to qualify for this credit. Some of the vehicles that meet the requirements include:
- Mercedes F-Cell 2012
- Honda FCX Clarity Fuel Cell Vehicle 2012
This is not an exhaustive list, so it’s best to reach out directly to the manufacturer of the car to determine if your purchase makes you eligible for this credit.
To claim this credit, complete Form 8910 and submit it along with Form 1040. The exact value of this credit can vary, but eligible taxpayers should expect to receive a credit between $400 to $4,000.
Qualified Plug-In Electric Drive Motor Vehicle Tax Credit
The Qualified Plug-In Electric Drive Motor Vehicle Tax Credit is also available to certain taxpayers who have purchased an eco-friendly vehicle that is powered by electricity drawn from a rechargeable battery. The credit is only available to the original purchase of the vehicle, and it cannot be claimed if the car was purchased in order to be resold.
The vehicle’s manufacturer must be included in the Clean Air Act, and the purchase must have been made after December 31, 2009 in order to qualify. Fortunately, dozens of vehicles meet the IRS’s requirements for this credit, including:
- Audi AE e-tron
- Hyundai Sonata Plug-In Hybrid Electric
- Hyundai Sonata Ioniq Battery Vehicle
- Kia Soul Electric
- Nissan Leaf
- Jaguar I-Pace
- Subaru Crosstrek Hybrid
- Toyota Prius
- Volvo XC90
A full list of vehicles that qualify can be found on the IRS’s website. If you are eligible for this credit, claim it by filling out Form 8936 and submitting it along with Form 1040. Eligible taxpayers can expect to receive a credit that falls between $2,500 and $7,500. This is a sizable credit that can lead to significant savings, so don’t forget to claim it on this year’s taxes. This is especially important since the credit will no longer be available after this year.
People who drive electric or hybrid vehicles save hundreds of dollars on gas every year, and now, they can save thousands more by taking advantage of these tax credits! It’s important to note that these are federal tax credits, so be sure to research whether or not your state has its own tax credits for electric or hybrid vehicle owners.