The IRS allows taxpayers to receive a credit to those who have acquired a Qualified Plug-in Electric Motor Vehicle after December 31, 2009. This tax credit “equals $2,500 plus, for a vehicle which draws propulsion energy from a battery with at least 5 kilowatt hours of capacity, $417, plus an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours. The total amount of the credit allowed for a vehicle is limited to $7,500.”
There is a phaseout for this credit, which begins when manufacturers of the Qualified Vehicle have sold over 200,000 in the United States.
These vehicles must be purchased for use or lease and not for resale. The taxpayer must be the first one to operate this vehicle and must be in the United States.
To see if your vehicle qualifies for this IRS credit, please visit the following link: http://www.irs.gov/Businesses/Qualified-Vehicles-Acquired-after-12-31-2009
Georgia also has a similar credit. According to the GA Department of Natural Resources, a taxpayer can receive a credit of up to 20% of MSRP (regardless if it is purchased or leased) or $5,000, whichever is less for Zero Emission Vehicles (ZEV). For Low Emission Vehicles (LEV), up to 15% of MSRP (regardless if it is purchased or leased) or $2,500, which ever is less.
The credit cannot exceed the taxpayer’s income tax liability, but it can be carried forward for 5 years. It is also important to note that GA is limiting the total amount of credits allowed for each fiscal year to $10 million.
In order to receive this credit, the taxpayer must file the original copy of form LEV/ZEV and the form must be printed in color. A copy of the Bill of Sale/ Paid Invoice in the name of the taxpayer must be submitted with form LEV/ZEV.
The GA Environmental Protection Division will send all forms back to the taxpayer either denying or allowing this credit. This original approval certificate has to be attached to the GA tax return or the credit will not be given.
If you have any questions or need any additional information regarding this credit, please do not hesitate to contact us.