2012 Plug-in Hybrid And Electric Car Tax Credit Information
Tax Incentives for 2012 and the Plug-in Hybrid Electric Cars that Qualify for Tax Credits
2012 Electric Car and Plug-In Hybrid Tax Credit
If you've recently bought an electric car, or a plug-in hybrid, when it comes to filing your income tax return, you may have some lingering questions regarding either the Electric Car Tax Credit or the Plug-in Hybrid Tax Credit. The Energy Improvement and Extension Act of 2008, and the American Clean Energy and Security Act of 2009(ACES) established tax credits for new qualified plug-in electric and plug-in hybrid motor vehicles. If you've recently leased or purchased an electric vehicle or a plug-in hybrid , chances are you will qualify for either the tax credit for electric cars or the tax credit for plug-in hybrid cars.
The key words in that last paragraph are “new” and “qualified."
New, as the word implies, means the individual claiming the Electric Car Tax Credit or Plug-in Hybrid Tax Credit must be the original purchaser of the automobile. There was some controversy last year when some Chevrolet Volt dealers were accused of selling used Volt models and neglecting to inform buyers they would not qualify for the $7500 plu-in hybrid tax credit that the Volt carried, as they were not the original purchasers of the car.
Whether dealers actually did this or not isn’t really the point here. The point here is that to qualify for the Electric Car Tax Credit or the Plug-in Hybrid Tax Credit you must be the original purchaser of the car. Buying a used electric car or a used plug-in hybrid did not qualify you for the tax credit.
The tax credit programs for these cars exists because, as with any new technology, early adopters are always going to pay a premium to get access to the technology. Given the perceived benefits to the environment of getting as many of these cars on the road as quickly as possible, the electric car tax credit is intended to help consumers offset the cost of being one of the first to buy a qualified electric or plug-in hybrid car.
Which brings us to the key word “qualified." The tax credits will phase out as certain sales targets are reached. This was set into place under the assumption costs of production decrease as sales volumes increase. With more sales, the resulting achievement of the economies of scale brought about by necessitating larger production runs theoretically enables manufacturers to sell the cars for less—thus eventually mitigating the need for government subsidies.
In fact, for this very reason, the federal tax credits for clean diesels and conventional hybrids all expired on December 31, 2010. If you didn’t file for your hybrid or diesel car tax credit with your 2011 tax return, you’re pretty much out of luck in that regard. However, if you purchased one of the qualifying electric vehicles in 2011 or will do so in 2012, you’ll want to read on to make sure you can take full advantage of the electric car tax credit or plug-in hybrid tax credit on your 2012 or 2013 IRS tax returns.