Electric cars must be externally charged to receive tax credits.
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According to the U.S. Environmental Protection Agency, burning fossil fuels accounts for more than 75 percent of human-generated greenhouse gases, and transportation makes up one-third of this percentage (see Reference 1). Purchasing a more fuel-efficient car can help reduce greenhouse gas emissions. Although the majority of tax credits for fuel-efficient vehicles have been phased out, some credits are still in place for certain cars.
Four-Wheeled Electric Vehicles
New four-wheeled, plug-in electric vehicles purchased after December 31, 2009, can qualify for a tax credit up to $7,500. The car must weigh less than 14,000 pounds and run on an externally charged battery rated at 4 kilowatt hours or more. The credit ranges from $2,500 to $7,500 depending on how long your battery lasts on one charge. This credit also applies to vehicles with more than four wheels as long as the vehicle meets the weight and battery requirements. (See Reference 2)
Low-Speed Electric Vehicles
If you purchased a new low-speed electric car between February 17, 2009, and January 1, 2012, you may qualify for a federal tax credit (See Reference 2). A low-speed vehicle is a four-wheeled vehicle that travels no faster than 25 miles per hour (see Reference 3). The battery must be externally charged and have a capacity of at least 4 kilowatt hours. The credit amounts to 10 percent of the cost of the vehicle, but is limited to $2,500. If you're claiming the credit for a standard electric vehicle, you can't take the credit for a low-speed one. (See Reference 2)
Two- or Three-Wheeled Electric Vehicles
A tax credit of 10 percent of the purchase price is also available for new two- or three-wheeled electric vehicles. The credit applies only to vehicles purchased between February 17, 2009, and January 1, 2012. The electric motor for the vehicle must be powered by an externally charged battery with a 2.5-kilowatt-hour capacity. You aren't eligible for the credit if you're taking a tax credit for an electric vehicle with four or more wheels. (See Reference 2)
Vehicle Conversions
If you or your mechanic used a kit to convert your car to a plug-in electric car between February 17, 2009, and December 31, 2011, you may qualify for a tax credit. The credit amounts to 10 percent of the cost of the conversion, with a maximum credit of $4,000. If you claimed a tax credit for your hybrid car, you can't take the plug-in conversion credit for the same vehicle.
State Incentives
Although many of the federal tax credits for fuel-efficient vehicles have been phased out, your state may still offer a tax credit for electric cars, biodiesel purchases or vehicles that operate on alternative fuels. Check with your state's department of revenue or look up your state on the Department of Energy's Federal and State Incentive website.
After working in scientific research for more than 10 years, Tammie Painter began her writing career in 2008. Her articles have appeared in "Northwest Travel," "Herb Companion" and "American Gardener." She has published four books, including "Simply Soft Cheese" and "Easy Preserving." Painter has a Bachelor of Science in biology from Portland State University.
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