Tax Credits for Buying Electric and Hybrid Cars
If you bought a new energy-efficient car in 2012, there is good news and bad news...
The bad news is that the tax credits for the popular hybrid gas-electric cars expired at the end of 2010. But the good news is that there is a new tax credit for plug-in electric hybrids and for fully electric cars, and the credit is worth up to $7,500.
The Alternative Motor Vehicle Tax Credit only applies to new cars, not to used cars. The credit may only be claimed by the original purchaser of the vehicle.
Is There a 2012 Tax Credit for Electric Cars and Plug-In Hybrids?
The 2012 Credit for Qualified Plug-in Electric Drive Motor Vehicles is currently worth $7,500 for any of the qualifying models. The credit will decrease in value (initially by 50%) and begin to phase out for the qualifying cars of each manufacturer after 200,000 qualifying models are produced.
What Electric Cars Qualify for the 2012 Tax Credit?
All of the following plug-in hybrids and electric cars currently qualify for the Credit for Qualified Plug-in Electric Drive Motor Vehicles:
AMP GCE and MLE
Azure Dynamics Transit Connect Electric
EMC Model E36, Model E36t, and Model E36v
Ford Focus Electric
Think City EV
More green tax savings: find out how to get a tax credit for energy-efficient improvements to your home.
What about the 2010 Alternative Motor Vehicle Credit for Hybrid Cars?
Unfortunately, the old 2010 Alternative Motor Vehicle Credit for hybrid cars has expired. But if you bought a qualifying vehicle in 2010 and you did not claim it on your 2010 tax return, you can still get the credit by filing an amended return.
You may be eligible for a hybrid vehicle tax credit (an energy efficient car tax credit) if you bought a hybrid or other alternative fuel car or light truck in 2010, as long the gross weight rating of the vehicle is 8,500 pounds or less. The vehicle must have been purchased no later than December 31, 2010. For the most fuel-efficient models, the Alternative Motor Vehicle Credit can be worth up to $3,000. The exact amount of the credit depends upon the make and model of the vehicle you purchased.
To qualify as a hybrid vehicle, your car or light truck must have drive trains powered by both an internal combustion engine and a rechargeable battery. Most hybrid makes and models (over 40 models overall) do qualify for this credit.
Taxpayers may claim the credit on their 2010 tax returns or 2010 amended returns if they bought a qualified hybrid or alternative fuel vehicle in 2010. The credit is only available to the original purchaser of the vehicle and cannot be claimed by an individual who leased it or bought it used.
The credit has been phased out for some older hybrid vehicle models but is available for several new hybrid cars. After 60,000 hybrid vehicles are sold by a particular manufacturer, the tax credit is reduced and gradually eliminated. To claim the full credit, one must file by the end of the third month after the quarter in which the manufacturer sells its 60,000th hybrid vehicle.
Is there a Credit for Plug-In Vehicle Conversion Kits?
The tax credit for converting a normal car into a plug-in hybrid vehicle expired at the end of 2011. If you purchased a conversion kit and placed it into service in 2011, you may still be able to claim this credit on a 2011 amended tax return.
See what other tax credits and tax deductions for which you may qualify.