The Federal EV Charger Tax Credit: What You Need To Know

Understanding the incentives of purchasing an electric vehicle is important and should be seen as a little nudge to commit to one.

That said, finding reliable information online is a challenge. So, what is the Federal tax credit for installing EV charging stations on your property?

Key takeaways from the scheme:
1️⃣ You may be eligible for a tax credit for installing an electric vehicle charging station.

2️⃣ The tax credit differs between commercial and residential properties.

3️⃣ If installed on a residential property, the tax credit limit is $1000.

4️⃣ If it is installed on a commercial property, the limit is $30,000

Remember, this tax credit is at a federal level and does not include the incentives and rebates you may get from your state.

Another thing to remember is that it does not include other incentives that you may be eligible for, such as utility rebates. So let’s discuss all of this and more; keep reading.

What Is The EV Charger Tax Credit?

The federal tax credit is available to eligible businesses and individuals who take the leap and install electric vehicle charging equipment on their properties. 

The federal tax credit entitles you to a 30% tax credit for the purchase and installation costs, up to a maximum of $1,000 for residential installations and up to $30,000 for commercial facilities. 

However, simply installing a charging station does not guarantee that you will get the tax credit. Instead, there are a few requirements that need to be met, including: 

• The station should be used for recharging a qualified plug-in electric vehicle, hybrid, or full EV. 
• The station has to be installed at a property owned by the taxpayer. 

There is some confusion around the tax credit, specifically when it ends. Initially, the incentive ended in 2021 but was reinstated under a different name in 2022 and will run until 2032.

It’s worth noting that state and local incentives may also be available for installing EV charging stations, so it’s also a good idea to research these opportunities.

How To Claim The Tax Credit

Claiming your tax credit is not as difficult as it may seem; however, I recommend using a professional tax consultant proficient at dealing with the IRS. That said, here are four steps you need to follow when claiming your federal tax credits for installing an electric vehicle charging station:

1️⃣ Save all of your receipts and documentation. First, ensure that whoever installs the charging station gives you receipts for the labor and parts.

2️⃣ Complete IRS Form 8911, the “Alternative Fuel Vehicle Refueling Property Credit” form, available on the IRS website.

3️⃣ Enter the amount of the credit. Remember, you can claim up to 30% of the cost of the charging station up to a maximum of $1,000 for individuals and $30,000 for businesses.

4️⃣ Submit your tax return and documentation to the IRS and await approval of your tax credit.

Once you have gone through the process, you might wait a while to get a response. The IRS advises that you do not file a second return and should not call them unless necessary. Instead, you can get an expected waiting time here.

If you use a tax professional, they should be able to give you an estimated wait time and will even be able to contact the IRS and know when necessary.

EV Charging Station Tax Credit: Commercial Vs. Residential 

The biggest difference between a commercial and residential EV charger tax credit is the amount. Instead of getting up to $1000, the commercial installation is eligible for up to $30,000.

Other than that, the charging station must still meet similar requirements to the residential EV charger. 

Not all commercial electric vehicle charges are eligible for up to $30,000 in federal tax credits.

For example, the more charging ports you have, the higher your tax credit will be, which is on top of the labor cost as well as the cost of the parts.

Incentives And Rebates

As I hinted early in the article, the federal tax credit differs from state and utility rebates.

Firstly, the federal tax credit is available in all states. However, state incentives apply to those who can prove that there reside in that specific state.

California, while being known as a tax-heavy state, has quite a few programs to incentivize those who want to purchase an electric vehicle and install a charger on their property. 

For example, if you install an electric vehicle charger on your property in California, you could be eligible for up to a $1500 rebate from the state of California.

You could also qualify for a federal tax credit and a utility rebate of up to $1000.

Again, it differs per state, and I recommend speaking with a tax professional or reading through one of our articles.

FAQs

Does Home Insurance Cover EV Chargers?

This question is tricky to answer because we cannot speak for all insurance companies. However, insurance companies typically cover home charges for your electric vehicle. 

The insurance typically covers the usual, which includes theft and damage. However, I recommend contacting your home insurance broker and talking to them about coverage while also finding out if it will increase your monthly premiums.

If your insurance company does cover the EV charger, that is another incentive to have one installed.

Key Takeaways

Having an electric vehicle already offers you several incentives; you can find out more about that in this tax credit for electric vehicles article. 

However, being incentivized to install your own EV charging equipment is simply a bonus. It is so important for you to take advantage of this infrastructure tax credit.

Not only does it put cash back into your pocket, but it also lets the government achieve the goals of the Inflation Reduction Act.

Eventually, it might push them to either increase the amount or even the duration of the incentive. But, overall, it should help make more people get an electric vehicle, and hopefully, we will have a faster adoption curve.

Now that you are ready to buy a home charging station, I recommend reading through these extensive buying guides and comparisons below:

🛒 Buying Guides:
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JuiceBox vs ChargePoint
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