By Many Americans are aware of the federal tax credit they can claim, up to $7,500, when purchasing a qualifying electric vehicle (EV). While the list of qualifying cars is currently short, it is expected to expand as more manufacturers meet the requirements.
However, what many people may not know is that the same law responsible for the tax credit structure for car purchases, the 2022 Inflation Reduction Act, has also introduced a separate tax incentive to assist drivers in installing an EV charger at home.
Charging at Home for Convenience and Savings
A significant number of EV owners prefer to charge their vehicles at home. Although public charging stations are available and useful for longer trips, they are often slower and more expensive than anticipated. To fully experience the financial benefits of driving on electricity instead of gasoline, homeowners can take advantage of lower electricity prices and the convenience of charging their vehicles while they sleep.
Installation Tax Credit Details
The charger installation tax credit allows individuals to claim 30% of the installation cost, with a maximum cap of $1,000.
It is important to note that this tax credit is not available everywhere. The law has specifically directed the Internal Revenue Service (IRS) to make the credit accessible in low-income areas and outside of cities.
In January, the IRS provided clarification on which areas would qualify for the tax credit. Prior to this guidance, it had been uncertain which locations could meet the requirements. Eligible chargers had to be installed in either low-income or non-urban areas, but it was unclear how many locations fell into these categories.
According to rules issued in late January, approximately two-thirds of Americans now have access to the Inflation Reduction Act’s 30C EV charging tax credit. To determine if you live in an eligible area, you can refer to an Energy Department map.
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