Tax Credits:

Electric Car Credit

A tax credit may be allowed to be taken on your tax return if you have purchased a qualified electric vehicle and put it in service during the tax year. The electric car must meet the following criteria in order to be considered qualified and eligible to be used for a tax credit:

  • Have at least four wheels and be produced for the purpose of traveling on roads, public streets and highways;
  • Must originally be used by you;
  • Was acquired for the particular purpose of your personal use;
  • Is powered primarily by an electric motor that generates its power through batteries, fuel cells, or other portable sources of electricity; and
  • Is used primarily in the United States.

If the vehicle meets the above requirements, the credit that can be taken is for 10% of the cost of the vehicle up to the $4,000 limit. The credit may be claimed on IRS Form 8834, Qualified Electrical Vehicle Credit and must be attached to your Form 1040 when your tax return is submitted.

Should your qualified vehicle be modified in any way that affects the requirement standards for this deduction within three years of the date you placed the vehicle in service, the credit taken may be subject to recapture by the IRS.