You may be eligible for a tax credit if you purchase a plug-in electric car, including a Tesla. Here’s what you need to know about the electric car tax credit.

What’s A Tax Credit?

A tax credit reduces the amount of tax you owe. It reduces your tax liability dollar-for-dollar. Non-refundable tax credits expire the year they’re used (or not used). Refundable tax credits can increase your tax refund if not used.

A tax credit and tax deduction both provide tax breaks. The difference is a deduction can reduce the amount of your taxable income.

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What Is The Electric Car Tax Credit?

The government aims to spur the electric-car industry and introduced an electric car tax credit in 2008. This financial incentive offers up to $7,500 in a non-refundable tax credit for new electric vehicles purchased by taxpayers.

How Does The Electric Car Tax Credit Work?

For electric vehicles purchased after December 31, 2009, you get a credit for at least $2,500. The tax credit can increase up to $7,500 depending on a few qualifiers:

  • the kilowatt capacity
  • how many vehicles the manufacturer sold.

You receive an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours. The credit begins to phase out after a manufacturer sells at least 200,000 vehicles. Tesla is the only company that’s hit the 200,000 threshold so far.

Are There Any Other Incentives For Buying An Electric Vehicle?

Many states also offer incentives for buying an electric vehicle. This may include tax credits, access to carpool lanes and more. The Department of Energy offers a website to find which state laws may apply to you.

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Anything Else To Know About The Electric Vehicle Tax Credit?

The electric car tax credits have a few more stipulations:

  • You must use the vehicle primarily in the United States
  • you typically cannot get the tax credit for a used vehicle
  • the tax credit cannot be passed on
  • you can’t get the credit if you buy a new vehicle to resale

Do I Get A Tax Credit For Buying a Tesla?

Yes, you can claim tax credits for a new Tesla. We’ve put together a chart letting you know what you can claim.

VehiclePurchased through 12/31/2018Purchased from 1/1/2019 through 6/30/2019Purchased from 7/1/2019 through 12/31/2019Credit available 1/1/2020
Tesla Roadster (2008-2011)$7,500$3,750$1,875$0
Tesla Model S (2012-2018)$7,500$3,750$1,875$0
Tesla Model X (2016-2018)$7,500$3,750$1,875$0
Tesla Model 3 Long Range (2017-2018)$7,500$3,750$1,875$0

How To Claim The Electric Car Tax Credit

You can claim the electric vehicle tax credit using IRS Form 8936. If it’s for personal use, you can then report the credit on your 1040 when filing your federal taxes.

Your state may also offer tax credits, so consult your tax pro before making any filings.

What Other Cars Qualify For This Federal Tax Credit?

Cars qualify for this tax credit if the vehicle draws propulsion energy from a battery with at least 5 kilowatt hours of capacity. Some cars that fit these criteria include:

MakeModelModel YearCredit Amount
AudiA3 e-tron2016-2018$4,502
AudiA3 e-tron ultra2016$4,502
BMWi3 Sedan2014-2019$7,500
BMWi3 (60Ah) Sedan2017$7,500
BMWi3s Sedan2018-2019$7,500
BMWX5 xDrive40e2016-2018$4,668
BMW740e xDrive2018-2019$4,668
BMWMini Cooper S E Countryman ALL42018-2019$4,001
Fiat500 e2013-2018$7,500
FordFocus Electric2012-2018$7,500
FordC-MAX Energi2013-2018$4,007
FordFusion Energi2013-2018$4,007
FordFusion Energi2019$4,609
GMCadillac ELR2014, 2016$7,500
6GMChevrolet Volt2011-2019$7,500
GMChevrolet Spark EV2014-201$7,500
GMChevrolet Bolt2017-2019$7,500
GMCadillac CT6 Plug-in2017, 2018$7,500
HyundaiSonata Plug-in Hybrid Electric Vehicle2016-2018$4,919
HyundaiIoniq Electric Battery Vehicle2017, 2018$7,500
HyundaiIoniq Plug-In Hybrid Electric Vehicle2018$4,543
Jaguar Land RoverJaguar I-Pace (First Edition, HSE, SE, S models)2019$7,500
Jaguar Land RoverLand Rover Range Rover PHEV (HSE)2019$7,087
Jaguar Land RoverLand Rover Range Rover Sport PHEV (HSE)2019$7,087
KiaSoul Electric2015-2018$7,500
KiaOptima Plug-in Hybrid2017-2018$4,919
KiaNiro Plug-in Hybrid2018$4,543
Mercedes-BenzB-Class EV (B250e)2014-2017$7,500
Mercedes-BenzS550e PHEV2015-2017$4,460
Mercedes-BenzGLE550e 4m PHEV2016-2018$4,460
Mercedes-BenzC350e PHEV2016-2018$3,501
Mercedes-Benzsmart Coupe EV2013-2018$7,500
Mercedes-Benzsmart Cabrio EV2013, 2014, 2015, 2017, 2018$7,500
Mitsubishii-MiEV 2012, 2014, 2016, 2017$7,500
MitsubishiOutlander PHEV2018, 2019$5,836
Porsche918 Spyder2015$3,666
PorschePanamera S E-Hybrid2014, 2015, 2016$4,752
PorscheCayenne S E-Hybrid2015-2018$5,336
SubaruCrosstrek Hybrid2019$4,502
ToyotaPrius Prime Plug-in Hybrid2017-2019$4,502
ToyotaPrius Plug-in Electric Drive Vehicle2012, 2013, 2014, 2015$2,500
ToyotaRAV4 EV2012, 2013, 2014$7,500
Volkswagene-Golf2015, 2016, 2017, 2018$7,500
VolvoXC902018, 2019$5,002
VolvoXC90 Excellence2018, 2019$5,002
VolvoXC6502018, 2019$5,002
VolvoS902018, 2019$5,002
VolvoXC-90 T8 Twin Engine Plug In Hybrid2016, 2017$4,585

A full list of eligible vehicles can be found on the IRS website.

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Marin Perez

Marin Perez

Marin is part of the marketing team at MileIQ. He's excited to see how entrepreneurs are using tools like MileIQ and Spend to be more successful. When not working, he's thinking about his next trip.
Marin Perez

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