Electric Cars Generate Sweet Tax Credits
The movement towards zero emission electric cars is gaining a tremendous amount of momentum. As we move into 2010, practical electric vehicles for the vast majority of the public will be available late in the year with the release of the Nissan Leaf.
If you plan to purchase an electric car in 2010, you can expect a healthy federal income tax credit to reward you. For plug-in electric vehicles with a gross vehicle weight of less than 14,000 pounds acquired after December 31, 2009, the maximum tax credit available will be $7,500. The base amount of the credit is $2,500. If the car has a battery capacity of at least 5kWh, then an additional $417 in tax credits will be available. For every kWh of battery capacity in excess of 5kWh, $417 will be added to the total amount. The additional amount, based on battery capacity, over the base amount is limited to a total of $5,000.
If you buy an electric car, charging it will be an obvious concern. Thanks to the Recovery Act, money has been allocated to build the necessary infrastructure in limited markets to support the growth of the electric vehicle. If you spend money putting in a charger, there is a 30% tax credit on the amount spent. The total credit amount is limited to $30,000 for commercial/retail installations and $1,000 for homeowners, and is set to sunset at the end of 2010.