To be eligible for the tax credit, a vehicle must meet
the following requirements:
- It must be powered primarily by an electric motor drawing
current from rechargeable batteries, fuel cells, or other
portable sources of electrical current.
- It must have at least four wheels and be manufactured
primarily for use on public streets, roads, and highways
(vehicles exclusively used on rail or rails do not qualify).
- It must meet all federal and state emissions requirements.
- It has never been used as a nonelectric vehicle.
- You must purchase the vehicle new and for your own use,
not for resale
- You must drive it mostly in the United States.
- Government agencies, tax exempt organizations, and foreign
entities are not eligible.
If any of these conditions change within 3 years of purchase,
you may have to return some of the money saved by the deduction. |
| To claim the tax credit, you must fill out and attach
Form
8834: Qualified Electric Vehicle Credit to your tax return.
You can claim the credit by entering the amount from line
20 of Form 8834 on line 55 of Form
1040. You should check box “c” and specify
Form 8834.
Partnerships and corporations have different filing requirements.
If you bought your vehicle in a previous tax year, you must
fill out an amended tax return Form
1040X for that year. |
| Some state and local governments also provide incentives
for AFVs. Check with your state or local government or view
the U.S. Department of Energy's list of State
& Federal Incentives & Laws. |
Qualifying
electric vehicles purchased new are eligible for a one-time
federal tax credit of up to $4,000. The credit will be reduced
to $1,000 for 2006 and will expire at the end of that year.