Logo of the Arizona internal revenue service (IRS), featuring a balanced scale within the "R" and enclosed by a laurel wreath.

Alternative Fuel Vehicle Refueling Property Tax Credit (Personal) – The Inflation Reduction Act

Alternative Fuel Vehicle Refueling Property Tax Credit (Personal)

Summary

Note: Section 13404 of The Inflation Reduction Act of 2022 (H.R. 5376) modified and extended the expiration date for the Alternative Fuel Vehicle Refueling Property Credit. Among other changes, it reduced the base tax credit from 30% to 6%, but allows the full 30% for projects that meet certain labor standards. The summary below described the credit as modified by H.R. 5376. 

Qualified alternative fuel vehicle refueling equipment not subject to depreciation allowances, including electric vehicle charging equipment, is eligible for a tax credit of 30% up to $1,000. These projects do not have to meet the same labor standards as commercial projects in order to qualify for the full 30% tax credit. 

Section 13801 of The Inflation Reduction Act of 2022 also established procedures for other parties to monetize certain tax credits, including this one, for equipment placed in service on or after January 1, 2023 and through December 31, 2032. 

The direct pay option allows non-taxable entities to directly monetize certain tax credits. The provisions apply to nonprofits, a state or political subdivision thereof, the Tennessee Valley Authority, Indian tribal governments (as defined in Section 30D(g)(9)), any Alaska Native Corporation (as defined in Section 3 of the Alaska Native Claims Settlement Act), or any corporation operating on a cooperative basis which is engaged in furnishing electric energy to persons in rural areas. Such applicable entities can elect to be treated as having made a tax payment equal to the value of the tax credit they would otherwise be eligible to claim. The entity can then claim a refund for the excess taxes they are deemed to have paid. The option effectively makes this tax credit refundable for these entities. 

The act also allows eligible taxpayers to transfer all or a portion of their eligible tax credits to an unrelated taxpayer. Transfers must be reported to IRS and only one transfer is permitted. Must be elected no later than the due date for tax filing for the tax year the tax credit is claimed.

Updated August 18, 2022

Leave a Reply

Keep up with all the news from EnergyOne

Sign up for our EV Charging and Renewables Newsletter. Get the latest news on everything EVSE:  The latest technology to rebates.  (one email or less per week).

Leave this field blank

Get charging today!

Plan, Engage, Launch!

Talk to our team about your project

Fill out the form below and we will get back to you within the next 24 hours.

Leave this field blank