Electric cars are more than eco-friendly and better fuel economy, they can provide you with government incentives. Buying a new electric or hybrid can qualify you for a 2009 tax credit.
Electric Cars Provide Government Incentive Tax Credits
Electric cars and certain hybrid vehicles can qualify for an auto government incentive. The tax credit is good for buying new electric cars in 2009. The available tax credits for the new cars can vary.
These tax credits are set to expire in 2012 and can offer you anywhere between $2,500 to $7,500, depending on the electric vehicle. The IRS is granting these credits on electric vehicles because they use alternative energy, or they offer fuel efficiency, which promotes a reduction in carbon emissions. While the tax credits have an expiration, it doesn’t mean that the IRS will not approve more tax incentives for next year.
According to the IRS, the new Plug-in Electric Drive Vehicle Credit modifies the credit for qualified plug-in electric drive vehicles purchased after Dec. 31, 2009. To qualify, vehicles must be newly purchased, have four or more wheels, have a gross vehicle weight rating of less than 14,000 pounds, and draw propulsion using a battery with at least four kilowatt hours that can be recharged from an external source of electricity. The minimum amount of the credit for qualified plug-in electric drive vehicles is $2,500 and the credit tops out at $7,500, depending on the battery capacity.
There is also another law, which almost the same thing, known as the Plug-In Electric Vehicle Credit. This hybrid tax credit is for certain low-speed electric vehicles (including those with two and three wheels). The amount of the credit is 10 percent of the cost of the vehicle, up to a maximum credit of $2,500 for purchases made after Feb. 17, 2009, and before Jan. 1, 2012.
To qualify for the Plug-in Electric Vehicle Credit, a vehicle must be either a low speed vehicle propelled by an electric motor that draws electricity from a battery with a capacity of 4 kilowatt hours or more or be a two- or three-wheeled vehicle propelled by an electric motor that draws electricity from a battery with the capacity of 2.5 kilowatt hours. The IRS says that a taxpayer may not claim this hybrid car tax credit if the plug-in electric drive vehicle credit is allowable, meaning you can’t use two credits.
There is also a Conversion Kits law for plug-in electric drive conversion kits. The credit is equal to 10 percent of the cost of converting a vehicle to a qualified plug-in electric drive motor vehicle and placed in service after Feb. 17, 2009. The maximum amount of the credit is $4,000. The credit does not apply to conversions made after Dec. 31, 2011.