Is “going green” important to you? Do you not only want to make your home energy-efficient, but drive a green vehicle as well?
The federal government has made that desire more affordable by offering 2 different tax credits to you, depending upon the type of “green vehicle” you are purchasing.
- Alternative Motor Vehicle Tax Credit. This tax credit is available to individuals who purchase a qualifying fuel cell motor vehicle. These vehicles are propelled by the power derived from one or more cells that convert chemical energy directly into electricity. Generally, you can rely on the manufacturer’s certification that a vehicle qualifies for this credit.
In order to qualify for this tax credit, you must: 1) be the owner of the vehicle; place the vehicle into service during the tax year; 3) the vehicle must be new (its “original use” must begin with you), 4) you must purchase the vehicle to use or lease to others; and 5) you must use the vehicle primarily in the United States.
This credit is currently scheduled to expire at the end of 2016.
- Plug-In Vehicle Tax Credit. This tax credit is available to individuals who purchase or lease a qualifying, four-wheeled plug-in electric vehicle manufactured primarily for use on public streets. The value of this credit ranges from $2,500 to $7,500. The base credit is $2,500, and an additional $417 for each kilowatt hour of battery capacity starting at 5 kilowatt hours, up to a maximum of $7,500.
This credit will begin to phase out for a manufacturer’s vehicles when at least 200,000 qualifying vehicles have been sold for use in the United States, determined on a cumulative basis. However, at this time no manufacturer has come close to selling 200,000 qualifying vehicles. Click here for the IRS’s list of cumulative sales by manufacturer.
To qualify for this credit, the vehicle must: 1) be manufactured primarily for use on public roads; 2) weigh less than 14,000 pounds; and 3) be able to exceed a speed of 25 miles per hour.