If you purchase an electric vehicle (EV) charging equipment for your home, you may be eligible for a tax credit. This is a nonrefundable tax credit that was passed through the Inflation Reduction Act of 2022. This tax credit is available beginning in the tax year 2023. This is a beneficial tax credit, which was meant to help individuals and businesses finance a vehicle charger. For individuals, the credit equals 30% of the cost and installation of the charging equipment in their home or a maximum amount of $1,000. For businesses, the credit equals 6% (30% if requirements are met) of the cost of the property or a maximum amount of $100,000. Additionally, the cost of the property must be reduced by any section 179 taken for each property purchased. Some states have additional credits that you can claim on your tax return. Be sure to check with your state to see if your state has any additional credits that you can also claim at state level.
The credit would be reported on Form 8911 on your yearly tax return. To be eligible for the credit, you must meet the following requirements. The charging equipment must be placed in service during the tax year, original use of the property began with you and must also be located in an eligible census tract. For individuals, it must be installed in your main home. In addition, bidirectional EV chargers are now covered under this credit. Bidirectional EV chargers allow you to power your home or appliance with your electric car.
A qualified alternative fuel vehicle refueling property according to the IRS website is:
- To store or dispense an alternative fuel, other than electricity, into the fuel tank of a motor vehicle propelled by the fuel. This is only if the storage or dispensing is at the point where the fuel is delivered into that tank.
- To recharge an electric vehicle, but only if the recharging property is located at the point where the vehicle is recharged.This credit will be around for the next ten years, until the end of tax year 2032.
