Aside from the knowledge you’re doing good for the environment by driving an electric vehicle, or a plug-in hybrid vehicle, there are also a number of financial benefits to doing so. In addition to the cost savings realized by using less fuel, the federal governments is offering tax credits based on the size of the battery pack in the car. These 2014 plug-in hybrid and electric car tax credits range from $2,500 to a maximum of $7,500.
In addition to the federal incentives, a number of states are offering tax credits and/or reduced licensing fees for electric cars and plug-in hybrids. Further, discounts and income tax credits are available for charging equipment as well. The states currently offering incentive programs include Arizona, California, Colorado, Delaware, Florida, Georgia, Hawaii, Illinois, Louisiana, Maryland, Montana, New Jersey, Oklahoma, Oregon, South Carolina, Tennessee, Utah, and Washington; in addition to the District of Columbia.
Vehicles currently qualifying for the Federal credit include:
2014 BMW i3 - $7500
2012 Fisker Karma - $7,500
2013 and 2014 Ford C-Max Energi - $4,007
2013 and 2014 Ford Fusion Energi - $4,007
2011 – 2014 Chevrolet Volt - $7,500
2014 Honda Accord Plug-in hybrid - $3,626
2014 Porsche Panamera SE Hybrid - $4,751.80
2012 – 2014 Toyota Prius Plug-in Hybrid - $2,500
The credit begins to phase out for vehicles at the beginning of the second calendar quarter after the manufacturer produces 200,000 eligible plug-in electric vehicles (i.e., plug-in hybrids and EVs) as counted from January 1, 2010. The IRS will announce when a manufacturer exceeds this production figure and will announce the subsequent phase out schedule.
To claim the credit, buyers should fill out IRS Form 8936, to obtain the Qualified Plug-in Electric Drive Motor Vehicle Credit. For vehicles acquired for personal use, buyers should report the credit from Form 8936 on the appropriate line of their Form 1040, U.S. Individual Income Tax Return.
For vehicles purchased in 2010 or later, this credit can be used toward the alternative minimum tax. If the qualifying vehicle is purchased for business use, the credit for the business use of an electric vehicle is reported on Form 3800, General Business Credit. For more specific information in this regard, visit https://www.fueleconomy.gov/feg/taxphevb.shtml.