Understanding Tax Credits For Electric Vehicles

You have probably seen the ads offering a $7,500 tax credit for some green technology cars. Not a single one of those ads has bothered to be a little more specific about the details and only a few dealers have the scruples to be completely honest about whether your vehicle will receive a tax credit and how much. Here are a few things to keep in mind about these alternative fuel tax credits.

• Many of them have expired for gas/electric hybrids. Cars that can be plugged into the power grid are the only ones still eligible for a tax credit. The government is phasing out all remaining credits as you are reading this. Tax credits disappear after 200,000 models have been produced.
• The tax credit is only available to the first owner. NO vehicle is eligible if it has been previously owned.
• $7,500 is the maximum credit. You only receive as much as your tax burden. If your end of year tax debt is only $15, that is all you will receive as a tax credit. Uncle Sam will not issue a refund check to cover these incentive programs.
• Currently the Honda Civic GX, Chevrolet Volt, Nissan Leaf, Smart ED, Coda sedan, Tesla Roadster, and the Wheego Life are the only cars receiving tax credits. Owners can only claim the credit for vehicles purchased on or after January 1, 2010.

The best advice that can be offered is to research a vehicle before you buy. Read the fine print on the tax credit and, if you still have questions, call whoever does your taxes each year.