Purchasing a new electric or hybrid vehicle can be a big investment, but it can also come with some big tax savings. Form 8936, also known as the Qualified Plug-in Electric Drive Motor Vehicle Credit, is a tax form used to claim a credit for purchasing a qualified plug-in electric drive motor vehicle. This includes vehicles such as electric cars and certain hybrid cars.
Am I Eligible to Claim the Qualified Electric Car Tax Credit & Which Vehicles Qualify?
To be eligible to file Form 8936, the vehicle must be purchased new and used primarily in the United States. The credit amount varies depending on the vehicle’s battery capacity and the date of purchase. For example, vehicles purchased before January 1, 2020, may be eligible for a credit of up to $7,500, while vehicles purchased on or after January 1, 2020, may be eligible for a credit of up to $4,000.
Some examples of qualifying vehicles include:
- Tesla Model S,
- Chevrolet Volt,
- Nissan Leaf,
- BMW i3,
- Ford Fusion Energi,
- Porsche Panamera S E-Hybrid,
- Toyota Prius Prime.
But it’s important to note that the qualification of certain vehicles may change over time, and It’s always better to check with the IRS or the manufacturer’s website for the latest information on which vehicles qualify for the credit.
Qualified Electric Car Phase-out Limit Explained
Another important note is that the credit amount may be subject to phase-out limits. This means that as the manufacturer sells more qualifying vehicles, the credit amount will decrease until it eventually phases out. For example, once a manufacturer sells 200,000 qualifying vehicles, the credit amount will begin to phase out. The phase-out limit and credit amount can vary depending on the vehicle, so it’s important to check with the IRS or the manufacturer for the most up-to-date information.
How to Claim the Qualified Electric Car Tax Credit
To claim the credit, the individual or business must file Form 8936 along with their federal income tax return for the tax year in which the vehicle was purchased. It’s important to note that the credit may not be available for certain types of taxpayers, such as tax-exempt entities.
In summary, Form 8936 allows individuals and businesses to claim a credit for purchasing a qualified plug-in electric drive motor vehicle. To be eligible, the vehicle must be new and primarily used in the United States and the credit amount may vary depending on the vehicle’s battery capacity and the date of purchase. The credit amount may also be subject to phase-out limits once a certain number of vehicles are sold by the manufacturer. It’s important to check your eligibility, phase-out limits, and the qualification of the vehicle before filing the form.
Don’t miss out on the opportunity to take advantage of this credit to save on your electric or hybrid vehicle purchase and make sure to file Form 8936 for maximum tax savings.
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Please note that the information provided in this blog post is for informational purposes only and should not be considered as legal or financial advice. The information provided may be subject to change or may not apply to your specific circumstances. We strongly encourage you to seek advice from a qualified professional, such as a tax advisor or financial planner, before making any decisions based on the information provided. BIBS is not responsible for any actions taken or decisions made based on the information provided in this blog post. It is the sole responsibility of the reader to ensure that the information is appropriate for their specific situation and to consult with a professional as needed.