Plug In Electric Vehicle Credit IRC 30 and IRC 30D

June 14th, 2021 by

The Plug-In Electric Drive Vehicle Credit (IRC 30D) – Internal Revenue Code section 30D provides a credit for qualified vehicles, including passenger and light trucks. To view vehicles from BMW of Escondido, please see our selection of electric vehicles or pre-order the new BMW iX and BMW i4 below. 

Plug-in Electric Drive Vehicle Credit at a Glance

But first, did you know that you can now pre-order either the BMW i4 or BMW iX with BMW of Escondido and save on an IRC 30 eligible vehicle. You’ll work with a dedicated client advisor at BMW of Escondido to design and order your all-electric BMW. Learn more and place your order today! Dual electric motors deliver incredible horsepower and efficiency, backed by electric all-wheel drive and a range of 300 miles. The First-Ever BMW iX is a modern example of minimalist elegance. The first-ever iX is 100% electric and BMW, with luxurious finishes, a spacious interior, and intelligent tech. A range of 300 miles is supported by electric all-wheel drive and two electric motors, and 200 Kilowatt Hours DC fast-charging provides seventy five miles in ten minutes (better than the Range Rover PHEV). Purchase price starts at $83,200 before incentives for eligible customers. 

BMW of Escondido has incentive programs and additional incentives if you choose to work directly with its and our expertly trained EV staff, including the previously mentioned BMW iX and the newly released BMW i4, now available for pre-order as well. With capacity in excess, you can travel comfortably with five passengers, have more power and torque than a light truck, and propulsion energy that takes you 0-60 in less than four seconds (similar to the Cayenne S E-Hybrid).

With a battery size roughly the size of the BMW iX, the BMW i4 will give you about 300 miles of range and a full AC charge in less than eight hours (better than the Ford Mustang Mach-E and miles ahead of the Kona Electric and Crosstrek Hybrid). While Vehicle Manufactures are releasing more concept cars that feature electric motors, BMW is consistently moving the ball further down the field and giving the EV audience everything they want in an electric vehicle and more. So if the financial incentives weren’t enough to convince you, perhaps the size and space, plus power and features are. Purchase price starts at $55,400 before incentives for eligible customers.

How to Qualify for Credit 

You may be eligible for a credit under Section 30D(a) and qualify for the qualified plug-in electric drive motor vehicle tax credit if your vehicle purchase satisfies a number of criteria. The credit ranges between $2,500 and $7,500, depending on the capacity of the battery. Your plug-in electric vehicle must also be brand new, made by an eligible manufacturer under the Clean Air Act, have at least four wheels, be appropriate for driving on public streets and highways, and have a weight rating of less than 14,000 pounds. And most importantly, the vehicle must have an electric motor that uses a rechargeable battery to generate at least 4 kilowatt-hours of capacity. 

Only qualified vehicles can be eligible for credit for EVs (also included: plug-in hybrid electric vehicles, but not a Conventional Vehicle that is strictly gas-powered). The credit begins to phase out for a manufacturer, when that manufacturer sells 200,000 qualified vehicles.

The qualified plug-in electric drive motor vehicle tax credit can help reduce your tax bill if you purchased a new vehicle that runs on electricity from a plug-in rechargeable battery. Qualified Plug-In Electric Drive Motor Vehicle Credit (IRC § 30D) Phase Out The qualified plug-in electric drive motor vehicle credit phases out in the second calendar quarter after the calendar quarter in which at least 200,000 vehicles manufactured by that manufacturer have been sold for use in the United States, phase-out begins for a manufacturer’s vehicles over the one-year period (andretaxco.com) To take the credit, you have to file an IRS Form 8936 with your return. All-electric plug-in hybrid cars purchased new in or after 2010 may be eligible for a federal income tax credit of up to $7,500 (fueleconomy.gov)

A listing of qualifying vehicles can be found at the IRS website.

What are EV Tax Credits?

There are EV tax credits that come from the purchase of a vehicle with a battery system that can draw power from an external power source. There are credits for plug in hybrid and pure electric cars. The credits are used to decrease taxes in a given year. If you bought an EV that was eligible for a $7500 tax credit and your total federal taxes for the year came to $8500, you wouldn’t owe a dime.

It Applies to EV, Plug-in Hybrid, and Fuel Cell Vehicles The law states that the credit applies to road-going vehicles that are charged from an external source and have battery packs with capacities of 4 kilowatt-hours or greater (kbb.com). It must have a gross vehicle weight rating (GVWR) of not more than 14,000 lbs (fueleconomy.gov). Qualified Plug-In Electric Drive Motor Vehicles (IRC 30D) Internal Revenue Code Section 30D provides a credit for Qualified Plug-in Electric Drive Motor Vehicles including passenger vehicles and light trucks (irs.gov). Depending on battery capacity, the incentives vary (ncsl.org).

Tax incentives on electric vehicles are worth the research.

Hopefully this post will encourage you to use the resources above for your benefit. Whether it’s calculating potential savings or rebates before making a new EV purchase or determining what tax credits might already be available to you for your current electric vehicle, there is much to discover. The government is willing to reward you more for your environmental efforts if you choose to continue using fossil fuels for transportation. As more and more people go electric, the government won’t need to reward drivers.

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