There has been a lot of talk about the tax credits for electric-vehicle (EV) cars in 2022 and the changes in 2023 for EV tax credits. But what about an EV charger in your home?
As part of the Inflation Reduction Act, a nonrefundable tax credit is available that equal to 30% of the equipment and installation of an EV home charger or $1,000, whichever is less.
This is a nonrefundable credit, which means if you do not have enough tax to offset the credit you do not get the difference. Let us say your total tax is $800 and the tax credit is $1,000. You can only use $800. You may get a refund of the tax paid but you do not get the rest of it.
The amount of unused tax credit does not roll forward.
Tax strategy hint: Set up to use the EV home charger credit in a year in which you can take the credit.
Businesses get a much larger credit. It is the lesser of 30% of the cost or $100,000 per EV charger.
The business must reduce the basis in the EV charging station by the credit amount. Note that the amount of unused credit cannot be carried forward.
Like most tax credits, you need to do some planning. When can you best take advantage of the credit? For example, if you put the EV charging station in your home you have a much smaller credit than if your business puts it into a business location.
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