Who Can Claim an EV Charging Station Tax Credit?
If you have considered adding electric vehicle (EV) charging stations to your property, the cost to install EV charging stations may have prevented you from making the purchase. Fortunately, the Federal government offers the Alternative Fuel Refueling Tax Credit, also known as the “30C” tax credit or EV charging tax credit to offset the burden of installing EV charging.
Recently, this tax credit has been expanded and updated that increases its value and defines what projects are eligible. Read on for a closer look of the benefits and how your business could be eligible to claim the EV Charging Tax Credit.
What Are the Benefits of an EV Charging Station Tax Credit?
The federal tax credit covers 30% of EV charging station and installation costs, including building permit fees, upgrades to hardware, and electrician’s fees. However, the credit does not cover ongoing electricity fees and is capped at $100,000 per charger for businesses and $1,000 per charger for residential stations.
Until 2023, the benefit was capped at $30,000 for business locations (and per site, rather than per charger), so the credits are moving in a positive direction. For homeowners, the tax break was reintroduced as part of the Inflation Reduction Act and will expire (or be reviewed) at the end of 2032.
What Do You Need to Qualify?
The shift from per-site to per-charger credits is a game changer for businesses and significantly increases the money available for infrastructure improvements. Homeowners too can celebrate.
Applying as a businesses
The amendments to the 30C credit introduced by the 2022 Inflation Reduction Act carry some important provisions.
Businesses must be in a low-income or non-urban location community to qualify for the full 30% credit. You can use this decision-tree tool to find out if your business qualifies.
There is also a wage and apprenticeship requirement to satisfy. In short, the business must show that it’s paying apprentices and contractors at the Secretary of Labor-designated rate.
Where either of these requirements is not met, the business will only be eligible for a maximum 6% credit, not the full 30%.
Is anyone excluded from EV tax credits?
The Alternative Fuel Infrastructure Tax Credit, which includes EV charging stations, is generally a one-time non-refundable credit. Typically, non-refundable credits only provide a benefit if you have a tax liability, meaning you owe taxes that the credit can be applied against.
However, certain tax-exempt entities like municipalities can still take advantage of this credit even without tax liability by making an "elective payment election". This allows them to essentially receive the credit amount as a direct payment from the IRS rather than as an offset against taxes owed.
To make this election, the tax-exempt entity must follow specific procedures including a pre-filing registration process. Homeowners and renters are also eligible but will need to secure necessary permits and approvals.
Claiming this federal credit does not impact eligibility for any available state rebates–you can benefit from both. In summary, while the credit is non-refundable, certain non-taxable entities like municipalities have a workaround to benefit from it regardless of tax liability by electing to receive a direct payment instead.
How to Claim 30C Tax Credit
To claim an EV charging station tax credit, specifically the Alternative Fuel Vehicle Refueling Property credit, you simply have to complete form 8911 and attach it to the regular tax return you file each year to the Internal Revenue Service. The credit is retroactive to 2018, so you may still be able to claim credit for unused years. However, remember that the $1,000 residential credit only applies to charging stations installed from 2022 onwards.
The most important step is to get your receipts together. You’ll need to collect all your installation invoices and hardware receipts to support your claim.
How EV Connect Can Help You Apply for the Alternative Vehicle Refueling Property (§ 30C) Tax Credit
Overall, the updated EV charging station tax credit is another positive step to electrifying transportation and making charging stations available to drivers across the U.S. It’s also a big deal for property developers and businesses since they can now add charging infrastructure to their projects in the knowledge that they will recoup a significant portion of the cost.
At EV Connect, we can help you make the most of the available tax credits, rebate programs, and other funding opportunities. Our products and services are currently approved for over $2.6 billion in active utility and local government incentive programs supporting EV charging for businesses. If you’d like to find out if you are eligible for EV charging station tax credits, get in touch with us today!
Sources:
Fixr Fixr.com | 2023 Cost to Install EV Charger at Home | Electric Car Charging Station Cost
Forbes How To Get The Federal EV Charger Tax Credit – Forbes Advisor
US Dept. of Energy Alternative Fuels Data Center
US Dept. of Treasury U.S. Department of the Treasury, IRS Release Guidance to Build out U.S. Clean Vehicle Charging Infrastructure