Is there a credit for installing home recharging equipment for my client’s plug-in electric vehicle?

Question of the week: Is there a credit available for installing personal use or residential electric vehicle recharging equipment?

May 13, 2020

Q. Is there a credit for installing home recharging equipment for my client’s plug-in electric vehicle?

A client bought a plug-in electric car last year and will claim the qualified plug-in electric drive motor vehicle credit on her 2019 tax return. She was told at the dealership that she could get another tax credit if she installs the recharging equipment at her home. It would certainly be more convenient for her to recharge her car at home, but she is weighing the cost of the equipment against going to free charging stations nearby.

Is there a new credit available for electric vehicle recharging equipment? If so, is it too late to claim the credit if she installs the equipment a year after getting the car?

A. Yes. The qualified alternative fuel vehicle refueling property credit is a nonrefundable credit that was retroactively extended for 2018 through 2020. For personal use equipment the credit is the smaller of 30% of the cost or $1,000.

The dealership is referring to the §30C qualified alternative fuel vehicle refueling property credit. It is not a new credit, but it had expired at the end of 2017. The Taxpayer Certainty and Disaster Relief Act of 2019 extended the credit retroactively for 2018 through 2020.

Qualified alternative fuel vehicle refueling property is property used to:

    • Dispense an alternative fuel such as ethanol into the vehicle’s fuel tank, or
    • Recharge an electric vehicle (EV).

Note that this is a credit for the refueling property, not for the car itself, so the property need not be installed in the same year the car was purchased. It is a nonrefundable credit available for property placed in service during the year. Original use of the property must begin with the taxpayer and the property cannot be used predominately outside of the U.S.

Recharging property must be located at the point where the vehicle is recharged. For recharging property that isn’t used for business or investment purposes, that means the equipment must be installed at the taxpayer’s main home, such as in the garage.

For nonbusiness-use property, the credit is the smaller of 30% of the cost of the property or $1,000. A larger credit is available for business- or investment-use property. Assuming your client is not using the equipment for commercial purposes, home recharging equipment would be personal use property, even if her EV is partly used for business.

The alternative fuel vehicle refueling property credit is claimed on Form 8911 and on line 6 of Schedule 3, Form 1040.

See “vehicle charging” on the energy.gov website for information on types and costs of home EV supply equipment and safety considerations for proper installation.

See Form 8911 instructions for details on claiming the credit. Your client should also check with her utility company to see if there are any special incentives available, such as charging during off-peak times.

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