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What are the tax benefits of buying an electric car?
I’ve heard that there are a number of incentives when buying an electric car. Is this just state-issued? What are the tax benefits of buying an electric car?
Allison Stone · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Many countries and different states in the US have tax benefits or tax rebates for electric car buyers and drivers. You have to look for them because not every region has them and for the ones that do, they’re not the same.
In the US, $7,500 is the maximum amount of credit for federal income tax for buyers of brand new EVs or PHEVs. Make sure you identify that you bought a new EV in that tax year and you can get a deduction up to that depending on your car. You will only get a deduction on what you owe, so if you owe less than the maximum deductible, it only applies you will not be able to use the maximum amount.
If you include this in the individual incentives given from state to state as well as any energy programs you may save yourself thousands of dollars. Before going in to buy an EV or window shop, don’t just let the dealer tell you about the deals, make sure to go in with your own research so you can tell the difference between honest advice and a sales pitch.
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