Electric or Plug in Vehicle Tax Credit

Electric or Plug in Vehicle Tax Credit

Driving a vehicle that is good for the environment can also prove to be good for your wallet. Plug in vehicles, both cars and trucks, are available for a tax deduction on federal taxes. Vehicles with a plug in battery that hold five kilowatt hours of battery power are eligible for a $417 credit. Any additional five kilowatt hours are available for a $417 credit each. The limit of the overall car credit is $7,500 for any type of car or truck.

This credit, as known as the IRS Section 30D credit, is a part of the Energy Improvement and Extension Act. The vehicle that this tax credit applies to must be for personal use and bought through purchase or lease. The vehicle must be used in the United States to be eligible for this write off.

Any vehicles are eligible for this tax credit must be purchased or leased in full prior to the end of the tax period. For example, the plug in vehicle must be purchased and have the title completely in the taxpayer’s name before the end of the tax season. If the sale or lease is still incomplete, with regards to payment or registration, the vehicle cannot be used as a deduction for the tax season.

This Section 30D write off also applies to the two and three wheel vehicles until January 1, 2014. This means motorcycles and other vehicles that run off plug in power can be used as a tax deduction for each tax season until 2015.

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