Alternative Fuel Vehicle Refueling Property Credit

If you install qualified vehicle refueling or electric vehicle recharging property in your home or business, you may be eligible for the Alternative Fuel Vehicle Refueling Property Tax Credit. The credit was extended and modified by the Inflation Reduction Act (IRA). The property must be installed in a qualifying location and the credit allowed is based on the placed-in-service date for the qualifying property.

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Who qualifies

The credit is available to businesses and individuals that place qualified refueling property into service during the tax year. Eligible tax-exempt and governmental entities can also claim the credit through elective pay.

Individuals

If you install qualified vehicle refueling and recharging property at your home, including electric vehicle charging equipment, you may be eligible for a credit of up to $1,000 for each item of property.

Businesses

If your business installs qualified vehicle refueling and recharging property, including electric vehicle charging equipment, it may be eligible for a credit of up to $100,000 for each qualified item of property.

Tax-exempt entities

Eligible tax-exempt and governmental entities can claim the credit through a new mechanism called elective pay (also known as “direct pay”) of up to $100,000 for each qualified item of property.

To claim the credit for your organization, you must notify the seller in writing that you intend to claim via elective pay. Otherwise, the seller can claim the credit if they clearly disclose to you the amount of the credit allowable. However, a seller that claims the credit may be willing to install the eligible property at a lower upfront cost to you by passing its tax savings to your organization.

Qualified refueling property

To qualify for the credit, refueling property must be used to store or dispense clean-burning fuel or to recharge electric motor vehicles.

In addition, the property must:

  • Be placed in service during the tax year
  • Have original use that began with the taxpayer
  • Be used primarily in the U.S. and U.S. territories 
  • If not business or investment use property, be installed on property used as a main home
  • Be in an eligible census tract (as of January 1, 2023)
  • Be depreciable property if not for personal use

As of January 1, 2023, the definition of qualified property includes charging stations for 2- and 3-wheeled electric vehicles (for use on public roads) and includes bidirectional charging equipment.

Eligible census tracts

Your business’ refueling property must be placed in service in an eligible low-income community census tract or non-urban census tract. Approximately two-thirds of Americans reside in eligible census tracts.

To determine if your business or investment property is in an eligible census tract:

  • If filing on or before November 15, 2024:
  • If filing after November 15, 2024:
    • Determine your 11-digit census tract geographic identifier (GEOID) under the 2020 census tract boundaries using the Census Bureau mapping tool. See if your identified GEOID is included in the IRS-provided list: Appendix B
    • If your property is placed in service prior to January 1, 2025, you may also determine your 11-digit GEOID under the 2015 census tracts boundaries. If you use the 2015 census tract boundaries, see if your 2015 GEOID is eligible in Appendix A.

Amount of credit

As of January 1, 2023, the credit for qualified refueling property subject to depreciation equals 6% with a maximum credit of $100,000 for each single item of property (for each charging port, fuel dispenser, or storage property).

Businesses and tax-exempt entities that meet prevailing wage and apprenticeship requirements are eligible for a 30% credit with the same $100,000 limit.

For consumers who purchase and install qualified alternative fuel vehicle refueling property for their principal residence, including electric vehicle charging equipment, between December 31, 2022, and January 1, 2033, the tax credit equals 30% of the cost with a maximum amount of $1,000 per item (for each charging port, fuel dispenser, or storage property).

For property placed in service before January 1, 2023 (including personal property), the credit is 30% of the cost of qualified refueling property with a maximum total credit allowed of $30,000 per location for depreciable property and $1,000 per location for all other property.

How to claim the credit

Use Form 8911 PDF and Instructions for Form 8911 to determine and report your credit for alternative fuel vehicle refueling property placed in service during the tax year.

Partnerships and S corporations must file Form 8911 to claim the credit. All other taxpayers are not required to complete or file the form if their only source for this credit is a partnership or S corporation. Instead, they can report this credit directly on line 1s of Part III of Form 3800, General Business Credit.

Special rules 

The portion of the credit for business or investment use of refueling property is treated as a general business credit carried from the Form 8911 to the Form 3800 and subject to the rules applicable to the general business credit.

The portion of the credit for personal use of refueling property cannot exceed the excess of the regular tax liability reduced by certain allowable credits over the tentative minimum tax (if any) for the taxable year as determined on Form 6251. The personal use part of the credit is carried from Form 8911 to the Form 1040, Schedule 3.

The basis of any refueling property for which a credit is taken must be reduced by the amount of the credit.

The credit is subject to recapture if the property the credit applied for ceases to qualify within 3 full years from the placed-in-service date.

Laws and guidance

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