What are the Best Federal Tax Credits for EV Charging Stations?
If you are in the market for an EV charging station, you may be wondering if there are any federal tax credits or rebates that can help offset the cost. The answer is yes! There is at least one federal tax credit and rebate available for qualified recipients depending on your situation and where you live. In this article, we will discuss what any Federal Tax Credits for EV Charging Stations may be, as well as how to qualify.
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What Types of Federal Tax Credits are Available for Installing EV Charging Stations?
As of October 2021, the U.S. government does offer a federal tax credit for EV charging installations. The Alternative Fuel Infrastructure Tax Credit is arguably the most popular federal tax credit specifically applicable to EV charging stations.
According to the Alternative Fuel Infrastructure Tax Credit:
“Fueling equipment for natural gas, propane, liquefied hydrogen, electricity, E85, or diesel fuel blends containing a minimum of 20% biodiesel installed through December 31, 2021, is eligible for a tax credit of 30% of the cost, not to exceed $30,000. Permitting and inspection fees are not included in covered expenses. Fueling station owners who install qualified equipment at multiple sites are allowed to use the credit towards each location.”
A tax credit of up to $1,000 may be given to consumers who buy qualifying residential fueling equipment before December 31, 2021. Unused credits that meet the IRS’s criteria for general business tax deductions can be carried backward one year and carried forward up to 20 years, applicable against future taxes. Additional information about claiming the credit may be found by reviewing IRS Form 8911. (Further citations Public Law 116-260, Public Law 116-94, Public Law 115-123, Public Law 114-113, 26 U.S. Code 30C and 38, and IRS Notice 2007-43)
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How to Apply for the Alternative Fuel Infrastructure Tax Credit
Taxpayers who install EV charging stations at their homes or businesses may be able to claim a tax credit for 30% of the cost, up to $1000. This includes installation costs and electric vehicle supply equipment (EVSE). The maximum amount which can be claimed is reduced by half if there are federal grants available for 50% of the cost of the charging station.
To apply for the Alternative Fuel Infrastructure Tax Credit, you need to complete IRS Form 8911 and attach it to your tax return. Our BizReps team knows how to navigate each part of IRS Form 8911 to make the process as hassle-free as possible for you. That said, if you have more extensive questions about your potential tax liability outside of IRS Form 8911, we highly recommend consulting with your tax preparer.
What Types of Commercial Properties May Benefit the Most from Installing EV Charging Stations?
The reality is EV infrastructure needs are no longer in the Pioneer stage of the vehicle purchasing habits’ bell curve. We are squarely in the Early Adopter stage and will transition into the Early Majority, also known as the greatest portion of the bell curve, in the next five years.
Commercial property owners and decision-makers who want to create a true competitive advantage need to embrace EV infrastructure changes, specifically installing EV charging stations. The Alternative Fuel Infrastructure Tax Credit is designed to help commercial properties make a faster transition to accommodate electric vehicle charging needs.
Where the real opportunity lies is with specific types of commercial properties, such as:
- Commercial establishments with high electrical consumption such as car dealerships, auto repair shops, and restaurants that use natural gas for cooking
- Retail locations where charging would not result in blocking access to parking spaces
- Parks and other government buildings looking to meet the needs of employees or members of the public who own electric vehicles
- Large-volume corporate office facilities, such as high-rise buildings, regional headquarters, and training facilities
- Hospitality establishments, especially hotels, restaurants, amusement and entertainment resorts, and theaters
- Large-scale healthcare facilities, such as hospitals and medical treatment centers
- Secondary education campuses, such as state universities, community colleges, and trade schools
The ability to leverage the Alternative Fuel Infrastructure Tax Credit to offset the high cost of EV charging stations and related upgrades is a huge incentive that can help your business save money.
For more information on this tax credit, as well as other incentives for electric vehicle infrastructure, such as workplace charging, connect with our BizReps team to get pricing on EV charging stations for your property.
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