How to Get the Federal EV Charger Tax Credit
Learn how to lower your tax liability with the federal EV charger credit. This guide covers current requirements and the process for filing on your tax return.
The federal Alternative Fuel Vehicle Refueling Property Credit helps offset the costs of purchasing and setting up qualified charging equipment for your home or business. The Inflation Reduction Act of 2022 altered and extended this tax benefit. It is now available for property placed in service through December 31, 2032.
Eligibility Requirements
To qualify for the credit, the taxpayer and the property must meet criteria set by the IRS. The credit is available to individuals for their primary home and to businesses for commercial use. The property must be new, with its original use beginning with the taxpayer, meaning you cannot claim a credit for a used charger.
A key change from the Inflation Reduction Act is that equipment placed in service after December 31, 2022, must be in an “eligible census tract.” This is defined as a low-income community or a non-urban rural area. The Department of Energy provides a mapping tool to determine if an installation location qualifies.
The property must be placed in service, meaning fully installed and ready for use, during the tax year you claim the credit. For individuals, the charger must be installed at their principal residence. Businesses can claim the credit for chargers installed at their operational locations.
Calculating the Credit Amount
The credit is 30% of the total cost of the charger and its installation. For individuals installing a charger at their principal residence, the maximum credit is capped at $1,000 per item. The costs included in this calculation, known as the credit’s basis, cover the purchase price of the equipment and labor costs for installation, including expenses for electricians and wiring.
For example, if a home charger costs $1,800 and installation is $700, the total cost basis is $2,500. The credit would be 30% of this amount, which is $750. If the total cost were $4,000, 30% would be $1,200, but the credit would be limited to the $1,000 cap.
For businesses, the credit for property placed in service after 2022 has a base rate of 6% of the cost. This rate can increase to 30% if the project meets federal wage and apprenticeship requirements. The maximum credit is $100,000 per item. This is a nonrefundable tax credit, meaning it can reduce your tax liability to zero, but you will not receive a cash refund for any excess amount.
Information Needed to Claim the Credit
To claim the credit, you must complete IRS Form 8911. You should use the most current version of this form from the IRS website to comply with the latest regulations.
To complete Form 8911, you will need to gather several pieces of information. You must have the exact date the charger was placed in service and the full address of the property where it was installed. This is important for verifying that the location is in an eligible census tract.
You will also need the cost basis of the property, which involves the full cost of the charger and all associated installation expenses. Keep detailed receipts and invoices from the equipment vendor and any contractors who performed the installation. These documents serve as proof of your expenses.
How to File for the Credit
File the completed Form 8911 with your annual federal income tax return. The credit amount you calculated on Form 8911 is transferred to the appropriate line on Schedule 3, Additional Credits and Payments. The total credits from Schedule 3 are then carried over to the main Form 1040, where they directly reduce your calculated tax liability.
Filing electronically with tax software is a straightforward method, as the software will guide you through filling out Form 8911 and automatically transfer the credit amount. If you file by mail, you must ensure that the completed Form 8911 and Schedule 3 are included with your tax return documents.