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Federal Tax Credits for Plug-in Hybrids

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Federal Tax Credit Up To $7,500!

Plug-in hybrid-electric vehicles (PHEVs) purchased in or after 2010 may be eligible for a federal income tax credit of up to $7,500. The credit amount will vary based on the capacity of the battery used to fuel the vehicle.

Small neighborhood electric vehicles do not qualify for this credit, but they may qualify for another credit.

Vehicle Make & Model Full Credit Phase Out No Credit
50% 25%
BMW Jan. 1, 2010, to Present TBD TBD TBD
2014 BMW i3 Sedan w/ Range Extender2014 i3 Sedan w/ Range Extender $7,500
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Fisker Jan. 1, 2010, to Present TBD TBD TBD
Fisker Karma2012 Fisker Karma Sedan $7,500
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Ford Motor Co. Jan. 1, 2010, to Present TBD TBD TBD
Ford C-Max Energi2013–14 Ford C-Max Energi $4,007
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Ford Fusion Plug-in Hybrid2013–14 Ford Fusion Energi $4,007
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General Motors Jan. 1, 2010, to Present TBD TBD TBD
Chevrolet Volt2011–14 Chevrolet Volt $7,500
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Honda Jan. 1, 2010, to Present TBD TBD TBD
Honda Accord Plug-in Hybrid2014 Honda Accord Plug-in Hybrid $3,626
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Porsche Jan. 1, 2010, to Present TBD TBD TBD
Porsche Panamera S E Hybrid2014 Porsche Panamera S E Hybrid $4751.80
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Toyota Jan. 1, 2010, to Present TBD TBD TBD
Toyota Prius Plug-in Hybrid2012–14 Toyota Prius Plug-in Hybrid $2,500
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Requirements

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To be certified for the credit by the manufacturer, the vehicle must meet the following requirements:

  • The vehicle must be made by a manufacturer (i.e., it doesn't include conventional vehicles converted to electric drive).
  • It must be treated as a motor vehicle for purposes of title II of the Clean Air Act.
  • It must have a gross vehicle weight rating (GVWR) of not more than 14,000 lbs.
  • It must be propelled to a significant extent by an electric motor which draws electricity from a battery which
    • has a capacity of not less than 4 kilowatt hours and
    • is capable of being recharged from an external source of electricity.

The following requirements must also be met for a certified vehicle to qualify:

  • The original use of the vehicle commences with the taxpayer—it must be a new vehicle.
  • The vehicle is acquired for use or lease by the taxpayer, and not for resale. (The credit is only available to the original purchaser of a new, qualifying vehicle. If a qualifying vehicle is leased to a consumer, the leasing company may claim the credit.)
  • The vehicle is used mostly in the United States.
  • The vehicle must be placed in service by the taxpayer during or after the 2010 calendar year.

Phase Out & Termination

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The credit begins to phase out for vehicles at the beginning of the second calendar quarter after the manufacturer produces 200,000 eligible plug-in electric vehicles (i.e., plug-in hybrids and EVs) as counted from January 1, 2010. IRS will announce when a manufacturer exceeds this production figure and will announce the subsequent phase out schedule.

Diagram illustrating phaseout

Claiming the Credit

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Fill out Form 8936Adobe Acrobat Icon, Qualified Plug-in Electric Drive Motor Vehicle Credit.

For vehicles acquired for personal use, report the credit from Form 8936Adobe Acrobat Icon on the appropriate line of your Form 1040, U.S. Individual Income Tax ReturnAdobe Acrobat Icon.

For vehicles purchased in 2010 or later, this credit can be used toward the alternative minimum tax (AMT).

If the qualifying vehicle is purchased for business use, the credit for the business use of an electric vehicle is reported on Form 3800Adobe Acrobat Icon, General Business Credit.

DISCLAIMER

The information on this page should not be viewed as an official or legally binding document. Other requirements or exceptions may apply. For more detailed information, please consult an IRS tax representative and/or official IRS publications.