Considering the purchase of a new fuel-efficient car in 2017? If you are, the IRS still offers tax credits up to $7,500 on all-electric and plug-in hybrid cars that you would claim on your 2017 tax return.
The IRS defines the vehicle requirements as follows: “This is a new vehicle with at least four wheels that Is propelled to a significant extent by an electric motor that draws electricity from a battery that has a capacity of not less than 4 kilowatt hours and is capable of being recharged from an external source of electricity.”
The U.S. Dept of Energy maintains a comprehensive list of qualifying cars by make and model that you can view: https://fueleconomy.gov/feg/taxevb.shtml
As expected, there are some items in the fine print to note:
- The vehicle must have a gross weight of less than 14,000 pounds.
- You must be the owner of the vehicle to claim the tax credit. If you’re leasing a car, the credit stays with the manufacturer that’s offering the lease, so you won’t be claiming that tax credit on your return. You should benefit as a consumer regardless, as the manufacturer generally factors the credit into reduced lease payments.
- Conventional hybrids and clean diesel cars at one time qualified for tax credits, but no longer do.
- The IRS does phase out credits for particular models as sales volume increases, so it’s always smart to make sure your make and model still qualifies before making a purchase with a tax credit in mind.
Please review this list out the qualifying electric vehicles by manufacturer that the IRS maintains to confirm that your dream electric vehicle qualifies for a valuable tax break.