Electric Car Tax Credit

In the U.S., there are several tax incentives for purchasing an electric car - be it a hybrid or a full battery electric. These incentives vary by state, but federal rebates apply to everyone.

Federal Tax Rebate for EV Buyers

Those who purchase an electric vehicle in 2011 are eligible for up to $7,500 in federal tax credits or rebates. Of course, in order to collect, you must owe at least as much as you're claiming in credit. Otherwise, the credit does not apply. So those who pay little in terms of federal tax will not likely collect anything in credits for their EV purchase.

The federal government may change this as the Obama Administration has proposed changing those tax credits into rebates that are realized immediately on the car's purchase and submitted to the government by the dealership rather than the tax payer. This solution has merit, but may lead to the type of cheating a lot of dealerships did during the "Cash for Clunkers" program in 2010.

State Tax Credits

Many states in the U.S. have tax credits and incentives for electric vehicle owners as well.

Californians who purchase an electric vehicle in their state can get up to $5,000 in rebates over and above the federal credits.

In Colorado, those who purchase an electric vehicle or convert a vehicle to electric can receive up to $6,000.

In Connecticut, Massachusetts, New Jersey, New York, Pennsylvania, Texas and Washington, there is a sales tax exemption, which is taken immediately at sale, so that is a relatively large potential rebate ($1,000 or more).

Georgia and Oregon have a $5,000 tax credit. Hawaii has a $4,500 credit, and Illinois and New Jersey have a $4,000 tax credit.

Both Louisiana and Maryland have a $3,000 tax credit and Utah has a $2,500 tax credit.

South Carolina offers up to $2,500 in tax incentives while Montana has a $500 tax credit.

Other Incentives

Many states also have other incentives for those who purchase electric cars. Most states, for instance, offer car pool lane access (HOV) for electrics, no matter how many passengers are present. Others have rebates or incentives for conversions as well as purchased factory vehicles. A lot of places like New York City have free parking and no meter fees for electric vehicles.

For Electrics Without 4 Wheels

Some states and the federal government give incentives for those who purchase electric vehicles that do not have the conventional 4 wheels (such as motorcycles and 3-wheeled cars).

Federal incentives for 2- and 3-wheelers is 10% or up to $2,500 for vehicles in this genre that qualify. This is as a tax credit on income tax.

Conversions and Charging Stations

Converted vehicles that go from internal combustion to all electric can qualify for tax credits as well. Federally, they can receive 10% or up to $4,000 for the cost of conversion. This also applies to plug-in hybrid conversions. Many states have similar offers, including Colorado and Florida, so the incentives can be large.

Charging stations, which are often a cost over-and-above the purchase price of the EV, also have credits associated with them. Federally, they are 30% or up to $1,000 for consumers and 30% or up to $30,000 for businesses.

Conclusion

All of the above, of course, apply only for 2011 and may change in 2012 and beyond. Some are contingent on funds being available and on manufacturers total sales. Be sure to check your expected incentives before you purchase.

This site follows the emergence, application and development of transportation innovation. Reference to manufacturers, makes and models, and other automotive-related businesses are provided for informational purposes only and do not constitute an endorsement by FutureCars.com.

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