30% Federal Tax Rebate on charger equipment and installation costs

[WhipSticks]

PSA: Anyone who drives an EV is familiar with the federal tax rebate on new or used EVs, but fewer might be aware that not only can you claim 30% of the cost of the EV charger you install, but you can also claim 30% of the labor costs involved in the installation. In general, any costs associated with the electrification of US households are qualified costs under the Inflation Reduction Act and related federal rebate programs. Last year, I had a heating system installed that placed significant loads on my electrical panel. My electrician determined that I had to increase my service level from 200A to 400A in order to safely run this system. That upgrade required hundreds of feet of trenching, conduit, and low-gauge wire to be run from the service pole on the road to the house. The trenching required that two large trees be removed. It required the power co install a new transformer (the labor costs of which I had to pay). It required a second panel to be installed inside the house, and labor costs associated with the wiring to the geothermal heat pump. It required inspections and fees be paid. All in, this was close to $30k worth of work. I was able to recover $10k of that in federal tax rebates last year.

If you buy a charger (say a FCSP) and have to pay an electrician to run wire from your basement to a 100A sub-panel in your garage to hook up your charger your total costs could run north of $3k. That is $1k that you can recover at tax time. Don't forget to keep you invoices for parts and labor!

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[WhipSticks]

Edit: Some states and power providers may also have EV charger rebates or credits. Be aware!

 

[RickLightning]

PSA: Anyone who drives an EV is familiar with the federal tax rebate on new or used EVs, but fewer might be aware that not only can you claim 30% of the cost of the EV charger you install, but you can also claim 30% of the labor costs involved in the installation. In general, any costs associated with the electrification of US households are qualified costs under the Inflation Reduction Act and related federal rebate programs. Last year, I had a heating system installed that placed significant loads on my electrical panel. My electrician determined that I had to increase my service level from 200A to 400A in order to safely run this system. That upgrade required hundreds of feet of trenching, conduit, and low-gauge wire to be run from the service pole on the road to the house. The trenching required that two large trees be removed. It required the power co install a new transformer (the labor costs of which I had to pay). It required a second panel to be installed inside the house, and labor costs associated with the wiring to the geothermal heat pump. It required inspections and fees be paid. All in, this was close to $30k worth of work. I was able to recover $10k of that in federal tax rebates last year.

If you buy a charger (say a FCSP) and have to pay an electrician to run wire from you basement to a 100A sub-panel in your garage, to hook up your charger you total costs could run north of $3k. That is $1k+ that you can recover at tax time. Don't forget to keep you invoices for parts and labor!

This is not accurate.

The EV charger installation tax credit is limited to a total of $1,000, i.e. spending of $3,333.33.

 

[WhipSticks]

Yes, the EV credit is limited to $1k, and I wrote $1k+. I'll edit that. But there are other electrification-related tax credits you can claim, some of which have no dollar limit. It's worth looking into. Last year I claimed and received more than $30k in energy efficiency tax credits that included the 10k electrical work I described. (+solar, +geothermal, +appliance).

 

[Pioneer74]

Also, be aware that there are income limits concerning the EV charger install credits. I was unable to claim anything toward my install.

 

[RickLightning]

Yes, the EV credit is limited to $1k, and I wrote $1k+. I'll edit that. But there are other electrification-related tax credits you can claim, some of which have no dollar limit. It's worth looking into. Last year I claimed and received more than $30k in energy efficiency tax credits that included the 10k electrical work I described. (+solar, +geothermal, +appliance).

That's correct.

The charger tax credit includes the charger, materials, and labor, less any rebate you might get from a utility company or your state. And it's non-refundable, just like the EV tax credit.

In 2024, there will be additional funds from states available for electrical upgrades.

 

[bmwhitetx]

All in, this was close to $30k worth of work. I was able to recover $10k of that in federal tax rebates last year.

A few things here.
First if the total was close to $30K then 30% of that is close to 9K, not 10K.
Second, as Rick pointed out the credit limit is $1,000 credit for individuals. If you got more than that it would have been for a business.
Third, there is an alternative minimum tax implication and many of us, myself included, did not get the EVSE credit in the same year we got the $7500 EV credit. That was disappointing.
But otherwise, great PSA!

 

[WhipSticks]

Also, be aware that there are income limits concerning the EV charger install credits. I was unable to claim anything toward my install.

The rebate description (here (irs website)) doesn't list income qualification limits. It does state that,

"Starting in 2023, qualifying property will be limited to property placed in service within low-income communities or non-urban census tracts."

Which is a bit weird, IMO. Still, it appears that many will qualify, but many suburban homes won't in 2023.

 

[bmwhitetx]

The rebate description (here (irs website)) doesn't list income qualification limits. It does state that,

"Starting in 2023, qualifying property will be limited to property placed in service within low-income communities or non-urban census tracts."

Which is a bit weird, IMO. Still, it appears that many will qualify, but many suburban homes won't in 2023.

I think he caught like me in the AMT clause of the regular IRS rules.

 

[Maquis]

The rebate description (here (irs website)) doesn't list income qualification limits. It does state that,

"Starting in 2023, qualifying property will be limited to property placed in service within low-income communities or non-urban census tracts."

Which is a bit weird, IMO. Still, it appears that many will qualify, but many suburban homes won't in 2023.

That section is for commercial installations, not home installations.

 

[RickLightning]

That section is for commercial installations, not home installations.

Correct.

 

[RickLightning]

I think he caught like me in the AMT clause of the regular IRS rules.

Yes, the AMT catches a lot of people.

 

[Zprime29]

So in order to claim the full $7500 from EV purchase AND the $1000 from EVSE install in the same tax year, one must have $8500 in tax liability. Is that correct?

 

[RickLightning]

So in order to claim the full $7500 from EV purchase AND the $1000 from EVSE install in the same tax year, one must have $8500 in tax liability. Is that correct?

Correct. Tax liability. Which for most is line 24. Which has no relationship to tax withholding, or tax owed after you do your tax return (which is liability minus taxes paid through withholding and estimated taxes). And you have to have income below the threshold.

 

[bmwhitetx]

So in order to claim the full $7500 from EV purchase AND the $1000 from EVSE install in the same tax year, one must have $8500 in tax liability. Is that correct?

It’s more complicated than that. My EVSE credit was only $300 and I had the extra liability but still didn’t get it. AMT is tricky.

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