2015 Electric Car Tax Credit Information

If you recently purchased an electric vehicle, or if you’re thinking about buying one soon, its important to know which tax credits you are eligible for. There is a federal electric car tax credit, as well as some that are available at the state level. If you are undecided as to which vehicle to buy, note that there are also some tax credits available for plug-in hybrid electric vehicles, but these are often lower than those available for fully electric cars.

To qualify for the federal electric vehicle tax credit, the car must meet a number of criteria:

1) The vehicle must be made by a manufacturer, meaning that to qualify you cannot take a conventional vehicle and covert it.
2) The vehicle must be treated as a motor vehicle for purposes of title II of the Clean Air Act.
3) The vehicle must have a gross vehicle weight rating (GVWR) of 14,000 pounds or less (all electric cars should have a GVWR less than 14,000 pounds).
4) The vehicle must be propelled to a significant extent by an electric motor which gets its energy from a battery with a capacity of 4 kilowatt hours (kWh) or more that can be recharged using an external source of electricity (in other words, it must be an electric vehicle that can be plugged-in to charge).
5) The vehicle must be new.
6) The vehicle must be acquired for use or lease by the taxpayer, and not for resale (otherwise dealers would be able to apply for the credit).
7) The vehicle must be used mostly in the United States.
8) The vehicle must be placed in service by the taxpayer during or after the 2010 calendar year.

The amount of the tax credit for is determined by the size of the battery, and the number of vehicles sold. Vehicles with a 4 kWh battery receive a credit of $2,500, plus $417 for each kWh of battery capacity over 4 kWh, up to the total maximum of $7,500. Only the first 200,000 of each model sold after December 31st, 2009 qualify for the full credit before it starts to be phased out, however as of yet no electric vehicle has reached this threshold.

Federal electric car tax credits:

Year / Make / Model Tax Credit Amount

2012 AMP Electric Vehicles GCE Electric Vehicle $7,500
2012 AMP Electric Vehicles MLE Electric Vehicle $7,500

2014 BMW i3 Sedan $7,500

2012-2014 BYD Motors e6 Electric Vehicle $7,500

2010 & 2012 CODA Automotive Sedan $7,500

2010 Electric Mobile Cars E36 7 Passenger Wagon $7,500
2010 Electric Mobile Cars E36t Pick-up Truck $7,500
2010 Electric Mobile Cars E36v Utility Van $7,500

2013–14 Fiat 500e $7,500

2012–14 Ford Focus EV $7,500
2011-2012 Ford/Azure Dynamics Transit Connect EV $7,500

2014–15 Chevrolet Spark EV $7,500

2014 Mercedes-Benz B-Class EV $7,500

2012 & 2014 Mitsubishi i-MiEV $7,500

2011–15 Nissan Leaf $7,500

2011 & 2013–15 smart fortwo electric vehicle (coupe/cabriolet) $7,500

2012–14 Tesla Model S $7,500
2008–11 Tesla Roadster $7,500

2011 Think City EV $7,500

2012–14 Toyota RAV4 EV $7,500

2015 Volkswagen e-Golf $7,500

2011 Wheego LiFe $7,500

Please note that these are non-refundable tax credits, and not a rebate. In order to claim them all, your tax liability must be more than $7,500. The credits cannot be used to generate a refund, though it may be possible to work around this by leasing the car and having the credits claimed by the company you lease from (as the leasing company would be the actual owner).

For more information on the federal tax credits, visit http://www.fueleconomy.gov/feg/taxevb.shtml and http://www.afdc.energy.gov/laws/fed_summary.

Depending on your state, there may be additional refunds or tax credits available for the purchase or lease of an electric vehicle.

Electric vehicles in Arizona are charged a lower license tax rate of $4 for every $100 in assessed value, with a minimum annual tax of $5. During the first year after initial registration, the assessed value is 1% of the manufacturer’s retail price (compared to 60% for traditional vehicles). Each succeeding year the car’s value is reduced by 15%. 

California offers purchase or lease rebates of up to $2,500 for CARB approved electric vehicles through the Clean Vehicle Rebate Project. Rebates are available on a first-come, first-served basis, and in order to qualify you must apply for the rebate after taking possession of the vehicle, within 18 months of the vehicle purchase or lease date, and you must retain ownership of the vehicle for a minimum of 30 consecutive months after the purchase or lease date.

California rebates for electric cars:

Year / Make / Model Rebate Amount

2014-2015 BMW i3 $2,500

2012-2014 BYD e6 $2,500

2014-2015 Chevrolet Spark EV $2,500

2013-2015 FIAT 500e $2,500

2012-2015 Ford Focus Electric $2,500

2013-2014 Honda Fit EV $2,500

2015 Kia Soul EV $2,500

2014-2015 Mercedes-Benz B-Class Electric Drive $2,500

2012 & 2014 Mitsubishi i-MiEV $2,500

2011-2015 Nissan LEAF $2,500

2011 & 2013-2015 smart ED and Electric Fortwo Cabriolet or Coupe $2,500

2012-2015 Tesla Model S $2,500
2009-2011 Tesla Roadster and Roadster Sport $2,500

2012-2014 Toyota Rav4 EV $2,500

2015 Volkswagen e-Golf $2,500

California rebates for neighborhood electric vehicles:

Year / Make / Model Rebate Amount

2010-2012 EVI eMega $900

2009-2013 GEM (e2, GEM e4, GEM eS, GEM eL, GEM eL XD) $900

2009 Miles (EV ZX40SAD, EV ZX40ST) $900

2010-2013 Vantage (EVX1000, EVC1000, EVP1000, EVR1000) $900

California rebates for zero-emission motorcycles:

Year / Make / Model Rebate Amount

2010-2014 Brammo (Enertia, Enertia Plus, Empulse, Empulse R) $900

2010-2015 Zero (S, SR, DS, XU, FX) $900

For more information, visit http://energycenter.org/clean-vehicle-rebate-project. 

Colorado offers the Innovative Motor Vehicle Credit for the purchase or lease of a qualifying vehicles. In order to qualify, the vehicle must meet the following requirements:

1) The vehicle must be titled and registered in Colorado.
2) The vehicle must be licensed for operation on Colorado’s highways.
3) The vehicle must have four wheels.
4) The vehicle’s gross vehicle weight rating (GVWR) must not exceed 8,500 pounds.
5) The vehicle must have a maximum speed of at least 55 miles per hour.
6) The vehicle must be propelled to a significant extent by an electric motor that draws electricity from a battery that has a capacity of at least four kilowatt hours and is capable of being recharged from an external source of energy.

The vehicle need not be new to qualify, but cannot have been previously registered in the state. To calculate the credit, start with the MSRP of the base model (with no added options) or the leased value of the vehicle (or the purchase price if the vehicle was bought second hand), with any other rebates, grants, and credits subtracted. Take this value and multiplying it by the capacity of the battery in kWh, and then dividing the total by 100, with a maximum allowable credit of $6,000. The tax credit for electric cars is refundable, so if the credit exceeds the tax due, the excess credit will be refunded as a tax return. 

The District Of Columbia provides an excise tax exemption and a reduced registration fee of $36 (instead of $72 to $155, depending on vehicle weight) to the purchaser of new vehicles with a city fuel economy rating of 40 miles per gallon or better (as listed on http://www.fueleconomy.gov). Subsequent purchasers of the vehicle will also qualify for the excise tax exemption, but not the reduced registration fee. 

Georgia offers an electric car tax credit of up to 20% of the purchase price of a zero emissions vehicle, to a maximum of $5,000. Any portion of the credit not used in the year when the car was purchased or leased can be carried over for up to five years. Eligible cars include the BMW i3, Fiat 500e, Ford Focus, Chevrolet Spark, Honda Fit, Kia Soul EV, Mercedes-Benz B-Class Electric, Mitsubishi MiEV, Nissan Leaf, Smart ForTwo Cabriolet, Tesla Model S, and the Scion iQ EV.

For more information, visit http://www.georgiaair.org/airpermit/html/mobilearea/engines/Alternativefuels.htm.

Illinois offers rebates (not tax-credits) for the purchase of electric vehicles. For vehicles with a conventional gasoline or diesel counterpart, the rebate is calculated as 80 percent of the incremental cost of the alternative fuel vehicle (up to $4,000), while vehicles without conventional counterparts receive a rebate of 10% of the base MSRP, not including any additional equipment or options (again, up to $4,000). In order to qualify the vehicle must be new, and purchased from a dealership in Illinois, and the application must be submitted within 12 months of the data of vehicle purchase.

Owners of dedicated electric vehicles are also able to register for a discounted registration fee not to exceed $35 for a two-year registration period, or $18 per year.

For more information, visit http://www.illinoisgreenfleets.org.

Louisiana offers an electric vehicle tax credit of 50% of the cost premium for an electric vehicle (compared to a regular version of the same car) or 10% of the total cost of an electric vehicle, up to a maximum of $3,000. To qualify, the vehicle must be a dedicated alternative fuel vehicle and be registered in Louisiana. The vehicle must also have four wheels, a top speed of at least 55 miles per hour, a battery of at least 4 kilowatt-hours, and be primarily for on-street use.

Electric vehicles purchased or leased in Maryland between July 1st, 2013 and June 30th, 2014 are eligible for an excise tax credit of up to $1,000. Vehicles with a battery capacity of 4.0 kWh or greater, but not greater than 10.0 kWh are eligible for a Level I Excise Tax Credit of $600. Vehicles with a battery capacity of 10.1 kWh or greater, but not greater than 15.0 kWh are eligible for a Level II Excise Tax Credit of $700. Vehicles with a battery capacity of over 15.0 kWh are eligible for a Level III Excise Tax Credit of $1,000.

Electric cars purchased or leased after July 1st, 2014 may be eligible for excise tax credits of up to $3,000, subject to the availability of funds. The credit is calculated by multiplying the battery capacity in kilowatt-hours by $125. Vehicles with battery capacities of 25 kilowatt-hours and above qualify for the maximum of $3,000. In order to be eligible, the vehicle must meet the following:

1) The vehicle must be made by a manufacturer primarily for use on public streets, roads, and highways.
2) The vehicle cannot be modified from the manufacturer’s specifications.
3) The vehicle must be a new vehicle purchased from a dealer.
4) The vehicle must be acquired for use or lease by the taxpayer, and not for resale.
5) The shipping weight of the vehicle may not exceed 8,500 pounds.
6) The maximum speed capability must be at least 55 miles per hour.
7) The vehicle must be capable of being recharged from an external source of electricity.

Funds are released on a first-come, first-served basis. The credits are limited to one per individual, and may not exceed the applicant’s state income tax, are nontransferable, and may not be carried over to another tax year. 

Massachusetts offers rebates of up to $2,500 through MOR-EV (Massachusetts Offers Rebates for Electric Vehicles) for eligible electric vehicles that are purchased or leased for a term of 36 months or more. In order to qualify, the vehicle must be new, the MOR-EV application must be submitted after you have taken possession of the vehicle, within 3 months of the purchase or lease date of a new vehicle, and prior to the exhaustion of the available rebate funds ($1.86 million for the initial program year) on a first-come, first-served basis. Only vehicles purchased on or after June 18th, 2014 are eligible.

Massachusetts rebates for electric cars:

Make / Model Rebate Amount

BMW i3 $2,500

Chevrolet Spark EV $2,500

Fiat 500e $2,500

Ford Focus Electric $2,500

Honda Fit EV $2,500

Mercedes-Benz B-Class Electric Drive $2,500

Mitsubishi i-MiEV $2,500

Nissan LEAF $2,500

smart ED and Electric Fortwo Cabriolet or Coupe $2,500

Tesla Model S $2,500

Toyota RAV4 EV $2,500

Volkswagen e-Golf $2,500

Massachusetts rebates for zero-emission motorcycles:

Make / Model Rebate Amount

Brammo (Enertia, Enertia Plus, Empulse, Empulse R) $750

Zero (S, SR, DS, XU, FX) $750

For more information, please visit https://mor-ev.org. 

Zero emissions vehicles (including fully electric vehicles) sold, rented, or leased in New Jersey are exempt from state sales and use tax. ZEVs are defined as vehicles certified pursuant to the California Air Resources Board zero emissions standards for the current model year.

Pennsylvania offers rebates for the purchase (but unfortunately not for the lease) of electric vehicles. To qualify, the car must have less than 500 miles on the odometer when purchased, and the application must be submitted within 6 months of the date of purchase. Vehicles with a battery capacity greater than or equal to 10 kWh are eligible for a $2,000 rebate, while cars with a battery capacity less than 10 kWh are eligible for a $1,000 rebate. Consumers are encouraged to submit their applications as soon as possible as rebate funds are limited and may be depleted before the rebate can be processed. The rebates of $2,000 are limited to 500 (with 80 left as of February 18, 2015), and will end on June 30, 2015. Because these are rebates, any money received is considered taxable income and may actually increase your tax liability.

For more information, visit http://www.portal.state.pa.us/portal/server.pt/community/alternative_fuels_incentive_grant/10492/alternative_fuel_vehicles/553206.

South Carolina offers a tax credit for electric cars purchased in the taxable years before 2017. To qualify, the vehicle must have an all-electric range of at least 9 miles, use an external source of energy to charge the battery, and have at least 4 kWh of battery capacity. The rebate is $667, plus $111 for every additional kWh over the minimum of 4 kWh, up to a maximum of $2,000. Low or medium speed vehicles do not qualify for the credit, and total claims for all taxpayers in one year may not exceed $200,000. Tax credits are available on a first-come, first-served basis.

Electric cars purchased in Texas on or after May 13, 2014 and on or before June 26, 2015 are eligible for a first-come, first-served rebate of up to $2,500 (limited to 2,000 rebates for electric drive vehicles). In order to qualify, the vehicle must meet the following requirements:

1) The vehicle must be purchased or leased new from a dealership or leasing company authorized to sell or lease new vehicles in Texas (not directly from the manufacturer).
2) The vehicle must have four wheels and be manufactured for use primarily on public streets, roads, and highways.
3) Have a powertrain that has not been modified from the original manufacturer’s specifications.
4) Be rated at not more than 8,5000 pounds of unloaded vehicle weight.
5) Be rated at less than 10,000 pounds gross vehicle weight rating (GVWR).
6) Have a maximum speed of at least 55 miles per hour.
7) Be propelled to a significant extent by an electric motor.
8) Have a battery with a capacity of not less than four kilowatt hours.
9) Be capable of being recharged from an external source of electricity.

For more information, visit http://www.tceq.texas.gov/airquality/terp/ld.html. 

Electric vehicles purchased in Utah are eligible for an electric vehicle tax credit. Vehicles purchased after January 1, 2014 (but before January 1, 2015) are eligible for a tax credit of $605 for the taxable year in which the vehicle was purchased. Vehicles purchased after January 1, 2015 are eligible for a $1,500 nonrefundable tax credit, as long as the vehicle is new. If the vehicle is leased, you must calculate the difference of the value of the vehicle before and after the lease, and multiply that value by 33%, with the maximum rebate being $1,500.

For more information, visit http://www.cleanfuels.utah.gov/taxcredits/taxcreditsintro.htm.

In Washington, new electric vehicles are exempt from state motor vehicle sales and use taxes. In order to qualify, the vehicle must meet the California motor vehicle emissions standards and comply with the rules of the Washington Department of Ecology. This exemption expires July 1, 2015. Any vehicles purchased before July 1, 2015 will be exempt from the use tax until it is retired or sold. 

In West Virginia an income tax credit for electric vehicles of up to 35% of the vehicle purchase price, up to a limit of $7,500, is available for new electric vehicles with a GVWR of up to 26,000 pounds purchased on or before December 31, 2017. If your tax liability is less than your credit, it can be carried forward for up to four succeeding years.

For more information on these incentives and more, visit http://www.afdc.energy.gov/laws or contact your local state government. Some states also provide other perks for electric vehicle owners, including HOV lane access, special parking spots, and rebates for the installation of charging stations. You may also wish to contact your local electricity provider to see if they offer any special incentives or rates. Even your insurance company may provide a discount for driving a green vehicle.