How to Claim the Federal Tax Credit for EV Chargers

The federal government offers a tax incentive, formally known as the Alternative Fuel Vehicle Refueling Property Credit, to encourage the adoption of electric vehicles. This credit helps offset the costs associated with purchasing and installing qualified home charging stations. The credit is available for property placed in service through December 31, 2032.

Eligibility for the Credit

To qualify for the credit, both the taxpayer and the charging equipment must meet specific requirements. For individuals, the charger must be installed at their primary residence. Businesses, including tax-exempt organizations, can also claim the credit for charging stations placed in service at their locations.

A requirement for eligibility is the location of the property. The charger must be placed in service within an eligible census tract. An eligible census tract is defined as a low-income community or a non-urban area. The IRS provides guidance and lists of qualifying census tracts, and taxpayers can use government-provided mapping tools, such as the 30C Tax Credit Eligibility Locator from Argonne National Laboratory, to determine if their address falls within one of these designated areas.

The charging equipment itself must also meet certain standards. The credit applies to new, qualified refueling property, meaning the original use of the charger must begin with the taxpayer. Eligible equipment also includes bidirectional charging stations, which enable two-way power flow between the vehicle and the grid.

Calculating the Credit Amount

The calculation of the credit differs for individuals and businesses. For an individual taxpayer, the credit is equal to 30% of the total cost of the charger and its installation, with a maximum limit of $1,000. This means if the total cost for the equipment and professional installation was $2,500, the credit would be 30% of that amount ($750), as it falls below the $1,000 cap. If the total cost was $4,000, the credit would be capped at the maximum of $1,000.

For businesses, the base credit is 6% of the cost of the depreciable property, up to a maximum of $100,000 per single item of property. The credit can increase to 30% if the business satisfies certain prevailing wage and apprenticeship requirements established by the Department of Labor. Businesses claiming the credit must also reduce the depreciable basis of the property by the amount of the credit taken, which affects future depreciation deductions.

The costs eligible for the calculation include more than just the charger itself. Taxpayers can include the expense of the charging equipment, any parts essential for its operation, and the labor costs for both construction and installation. For example, costs for a new electrical panel or wiring installed specifically to service the charger can be included in the total cost base used to calculate the 30% credit.

Required Information and Form Preparation

Before filing, gather all necessary documentation. This includes keeping detailed receipts and invoices that verify the purchase price of the charging equipment and any associated installation fees. You should also retain a copy of the filed form and supporting documents with your tax records.

The specific form used to claim this incentive is IRS Form 8911, Alternative Fuel Vehicle Refueling Property Credit. This form is where you will report your expenses and figure the exact amount of your credit.

When filling out Form 8911, you will need to provide specific details about the property. This includes the date the charger was placed in service, the full address where it was installed, and the total cost. A key piece of information required on the form is the census tract number for the property’s location, which confirms its eligibility.

How to Claim the Credit

File the completed Form 8911 with your annual tax return. For individual taxpayers, Form 8911 is submitted as an attachment to their Form 1040. Businesses will attach the form to their respective income tax returns, such as Form 1120 for corporations or Form 1065 for partnerships.

The credit amount calculated on Form 8911 is then transferred to the appropriate line on your main tax return, where it will reduce your total tax liability for the year. For most taxpayers, it is a nonrefundable credit, which means it can lower your tax bill to zero, but you will not get any of it back as a refund beyond that amount. For certain entities that do not pay federal income tax—such as tax-exempt organizations, state and local governments, and tribal governments—the credit can be received as a direct payment from the IRS through a mechanism known as “elective pay.”