Have you thought about buying a new car recently? If yes, there are significant tax incentives and rebates available for New York residents on new plug-in electric vehicles (EVs). The vehicle must be capable of being recharged from an external source of electricity to be considered an EV.
A vehicle is generally considered new if the taxpayer is the first person to claim title. You may be able to check if the car has been titled before with your insurance company or by running an online car check.
New York State Drive Clean Rebate and New Electric Vehicle Recharging Property Credit
New York State recently announced a Drive Clean Rebate for the purchase of a plug-in hybrid or full electric vehicle. The rebate ranges from $500-$2,000 based upon the max electric driving range. Electric cars with a MSRP greater than $60,000 have a maximum rebate of $500.
New York set up a fund of $55,000,000 available on a first come, first serve basis to supply the rebate.
New York State residents and businesses registered to do business in New York State are eligible for this rebate. The rebate requires a purchaser or lessee to own or lease the vehicle for a minimum of 36 months and agree to keep the vehicle in original condition, registered, and insured for the time period.
Businesses may additionally benefit with a special New York State credit up to the lesser of $5,000 or 50% of the cost of installing Electric Vehicle Recharging Property. This credit expires for tax years beginning after January 1, 2018 (i.e. for calendar year taxpayers, the credit expires after 2019).
Federal Plug-In Electric Drive Vehicle Credit (IRC 30D)
The Federal tax credit for EVs is up to $7,500 and based upon battery pack capacity. To qualify for the credit you must be the original owner of the EV and use the vehicle predominantly in the United States.
The Federal credit does not apply to lessees because the leasing company is the ‘original owner’.
The credit is claimed on your Federal income tax return. It is not refundable and does not carry-over to the next year. Taxpayers must have at least $7,500 in regular Federal tax to utilize the max credit. Taxpayers may consider converting traditional IRAs to ROTH accounts to increase tax for the credit.
The tax credit begins a phase-out once manufacturers sell 200,000 EVs. The first manufacturer expected to reach this number is General Motors sometime in 2018 followed by Tesla.
RDHB CPAs provides its clients with personalized tax, business planning, accounting, auditing, and wealth management services. For more information on motor vehicle tax incentives and rebates, please contact RDHB’s resident car guy, David Feor, CPA at firstname.lastname@example.org or visit the links below: