Inflation Reduction Act EV Charging Station Credit
Are you considering the switch to an electric car? Or have you already started driving one and need a convenient at-home charging option? There’s never been a better time than now, thanks to the Inflation Reduction Act. This act contains multiple incentives to get Americans to switch to clean energy by electrifying their homes and vehicles. It includes provisions for tax credits and rebates for things like switching to an electric furnace or buying an electric vehicle (EV). Luckily for those in the EV camp, the IRA also offers a tax credit for charging equipment that extends through 2032. Here’s what you need to know about how to qualify for and claim that credit.
Residential Charging Station Credit
For individuals and residences, the tax credit for EV charging equipment is 30%, up to $1,000. With the average costs of a Level 2 EV charger, you’re likely to get the full 30% as the cost of the equipment and installation isn’t much higher than the dollar cap.
Commercial Charging Station Credit
For commercial entities, it’s a little more complex. The commercial use tax credit has a base of 6%, and the maximum credit has moved up from $30,000 per property to $100,000 per unit. Businesses can claim a 30% credit for projects meeting prevailing wage and registered apprenticeship requirements. For non-taxed entities like governments and nonprofits, the direct-pay option allows for a direct payment in lieu of a tax credit. For businesses with little tax liability, the transferability clause allows them to sell their credits for cash. To qualify, the equipment must be installed in a “non-urban” (less than 50,000 population) area or a low-income community. Low-income communities are defined as census tracts where the poverty rate is 20% or higher. Alternatively:
- For non-metropolitan areas, median family income is 80% of the state’s median or lower.
- For metropolitan areas, median family income is 80% of the state’s median and the metropolitan area median or lower.
Claiming the EV Charging Station Credit
One of the greatest advantages of IRA tax credits is that they’re simple to claim. If you use a tax preparer or software, you’ll just have to present or input the information from your receipts and won’t even have to think about calculations. If you’re doing taxes on your own, you’ll use Form 8911 to calculate the amount you can deduct. This method is a little more complex, with two pages of instructions to follow, but if you’re already committed to doing your own paperwork, it won’t be a heavy lift to parse the rules.
Make the Transition With Solera Energy
It’s undoubtedly the best time yet to switch to alternative energy sources, and Solera Energy is leading the way in Missouri and Arkansas. Our full-service solar company can help you learn more about how to take advantage of the Inflation Reduction Act’s benefits.