Electric Car Tax Deduction and How to Claim It

October 12, 2018

Electric cars are amazing vehicles. If you are the proud owner of an electric car or are looking to get one, you may be wondering if you can claim any tax credits. Thankfully, the Qualified Plug-In Electric Vehicle (PEV) Tax Credit can help save you some big bucks. Here’s how to find out if your vehicle meets the requirements for the credit.

How Much You Can Get Back

The maximum PEV credit is $7,500. Your credit depends on your tax situation and the battery size of your car. However, the credit gets reduced once 200,000 models of a specific vehicle have been sold. This means some popular cars may only qualify for smaller credits.

Eligible Vehicles

Here are some PEVs that are eligible for either partial or full credit:

• Audi A3 e-tron
• BMW i3
• BMW X5 xDrive40e
• Cadillac ELR
• Chevrolet Spark EV
• Chevrolet Volt
• Fiat 500e
• Ford Focus Electric
• Ford Fusion Energi
• Hyundai Sonata Plug-In Hybrid
• Kia Niro Plug-In Hybrid
• Kia Soul EV
• Mercedes-Benz B-Class EV
• Mercedes-Benz C350e
• Mitsubishi i-MiEV
• Nissan Leaf
• Porsche Cayenne S E-Hybrid
• Tesla Model S
• Tesla Model X
• Toyota Prius Prime Plug-In Hybrid

For a complete list of qualifying vehicles, contact Encino tax consultants.

How to Claim the Credit

The tax credit isn’t a rebate you receive when you buy a qualifying vehicle. Rather, you must apply for the credit when sending in your tax return. In order to apply, you must fill out IRS Form 8936, which is best accomplished with the help of Los Angeles tax preparation services. Then, simply send it in with your return. You have to wait for next year to file your return.

While electric vehicles may have a high sticker price, the significant tax incentive can help ease the financial expense. If you’re planning on filling out Form 8936, you should talk to a tax professional to ensure you follow the instructions properly.

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