Tax Credits for Buying Electric and Hybrid Cars
If you bought a new energy-efficient car in 2013, 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. In addition, the credit for qualified plug-in electric and electric vehicle credit expired at the end of 2012.
The good news is that there are two tax credits for taxpayers who bought an electric or hybrid car in 2013:
- one credit for placing a qualified fuel cell vehicle in service in 2013 and
- one credit for placing a qualified plug-in electric drive motor vehicle credit in 2013.
What is the 2013 Tax Credit for Qualified Fuel Cell Vehicles?
The Alternative Motor Vehicle Tax Credit is a credit that only applies to new cars, not to used cars. The credit may only be claimed by the original purchaser of the vehicle. In general, the amount of the credit is 100% of the manufacturer's (or domestic distributor's) certification to the IRS of the allowed, maximum credit.
How Do I Claim the Alternative Motor Vehicle Tax Credit?
To claim the credit, complete Form 8910 and attach it to Form 1040. Include your credit amount in line 53 of Form 1040. Check box c and enter "8910" on the line next to that box.
On efile.com, you can prepare and efile Form 8910, along with your Form 1040. Once you answer a few simple questions about your tax situation, the efile software will generate the forms for you and help you complete them accurately.
Is There a Tax Credit for Plug-in Electric Cars and Hybrids?
The Qualified Plug-in Electric and Electric Vehicle Credit expired at the end of 2012. You cannot claim this credit on your tax return for 2013 and later Tax Years unless you have a passive carryover from a prior year (2012 and earlier). You can enter this passive carryover amount when you prepare your return on efile.com.
However, if you bought a qualifying vehicle in 2012 and you did not claim it on your 2012 tax return, you can still get the credit by filing an amended return.
Is There a Tax Credit for Plug-in Electric Drive Motor Vehicles?
The Credit for Qualified Plug-in Electric Drive Motor Vehicles is currently worth up to $7,500 for certain two-or-three-wheeled vehicles purchased after December 31, 2011, and before January 1, 2014. The vehicle must draw propulsion energy from a battery with at least 5 kilowatt hours of capacity (worth $417), plus an additional $417 for each kilowatt hour of battery life over 5 kilowatt hours.
The credit decreases in value (initially by 50%) and begins to phase out for the qualifying cars of each manufacturer after 200,000 qualifying models are produced.
What Electric Cars Qualify for the Credit for Qualified Plug-in Electric Drive Motor Vehicles?
All of the following plug-in hybrids and electric cars qualify for the Credit for Qualified Plug-in Electric Drive Motor Vehicles:
- AMP: GCE and MLE
- Azure Dynamics Transit Connect Electric
- BMW i3 Sedan with Ranger Extender, i3 Sedan
- Boulder Electric Delivery Van DV-500, Electric Shuttle DV500, Electric Flat Bed DV-500, Electric Service Body DV-500
- BYD e6 Electric Vehicle
- Chrysler Fiat 500e
- CODA Sedan
- EVI-MD (Medium Duty) Electric truck, EVI-WI (Walk-In) Electric truck
- EMC Model E36, Model E36t, and Model E36v
- Fisker Karma
- Ford Focus Electric, Ford C-MAX Energi, Ford Fusion Energi
- GM/Chevrolet Volt, Chevrolet Spark EV
- Honda Accord Plug-In Hybrid
- Mercedes-Benz smart Coupe/Cabrio EV
- Mitsubishi i-MiEV
- Nissan Leaf
- Porsche Panamera S E Hybrid
- Smart Fortwo
- Tesla Roadster, Tesla Model S Vehicle
- Think City EV
- Toyota Prius Plug-in Electric Drive Vehicle, Toyota RAV4 EV
- Wheego LiFe
More green tax savings: find out how to get a tax credit for energy-efficient improvements to your home.
How Do I Claim the Credit for Qualifed Plug-in Electric Drive Motor Vehicles?
To claim the credit, complete Form 8936 and attach it to Form 1040.
On efile.com, you can prepare and efile Form 8936, along with your Form 1040. Once you answer a few simple questions about your tax situation, the efile software will generate the forms for you and help you complete them accurately.
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.