Tax credits and rebates bring down the cost of an EV dramatically

The federal tax credit

The federal tax credit is based on vehicle battery size. All vehicles offered in the 2019 Sales Event qualify for the full $7,500 credit except for the Chevrolet Bolt. Its credit is $4,085. Any tax-paying entity can file for the credit, and the credit can be applied to leased vehicles as well.

However, there are a couple of factors that could cause you to get less than the full credit.

First, the federal government has allocated only a limited number of tax credits to each auto manufacturer. Credits taper off as the manufacturer approaches its specified number of vehicles. That's a good reason to move on a purchase before the end of the year.

Second, the amount of federal tax credit you get will depend on your federal income tax liability for 2019. You can claim a credit for no more than the amount of tax you owe, and the credit can be used only for the tax year in which the purchase is made.

Example 1: Jane Doe buys an EV that qualifies for a $7,500 credit. Her federal tax owed for the year of purchase (including employer withholdings and self-employment pre-payments) is $5,000. Jane will receive a $5,000 refund.

Example 2: Mary Buck buys an EV that qualifies for a $7,500 credit. Her federal tax owed for the year of purchase (including employer withholdings and self-employment pre-payments) is $20,000. Jane will receive a $7,500 refund.

Colorado's tax credit

Colorado's "Innovative Motor Vehicle" income tax credit is a flat $5,000 for the purchase of any plug-in hybrid or all-electric vehicle, and $2,500 for the lease of any plug-in hybrid or all-electric vehicle. As with the federal credit, any tax-paying entity can file for the credit.

One of the great things about the state credit is that it's fully refundable. That means you get the full credit no matter what your state tax bill is. If you owe $2,000 in state income tax, say, and you leased an EV, you'll instead get a $500 refund; and if you purchased an EV, you'll get $3,000 back.

The other great thing about the state credit is it's assignable. In 2016, legislators passed HB 1332, which allows vehicle buyers to assign the "Innovative Motor Vehicle" income tax credit to a financing entity at the time a new electric vehicle is leased, or purchased using financing.

Ask your dealer if its financing entity has signed up with the Colorado Department of Revenue. If it has, and if you chose to lease the vehicle or purchase with dealer financing, the dealer can offer the tax credit at the time of sale. Buyers don't have to wait to file their taxes the following year to benefit from the state tax credit.

Banks or credit unions providing auto loans can also offer the assigned tax credit, if they have signed up with the Colorado Department of Revenue.

The dealership's financing entity, bank or credit union will ask the buyer or lessee to sign a Colorado Department of Revenue “Election Statement” form, DR 618, to document the transaction at the time of purchase.

The financing entity may collect a fee of up to $150 from the buyer's tax credit to cover its administrative costs for processing the assignment.

Finally, there's a good reason to buy or lease an EV in 2019, because Colorado's tax credits will taper down in the coming years and end on Dec. 31, 2021:

  • Sales in 2019: $5,000 for purchase / $2,500 for lease
  • 2020: $4,000 purchase / $2,000 lease
  • 2021: $2,500 purchase / $1,500 lease

 

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Get free, neutral advice on EVs at these presentations

We're hosting a series of free workshops to get you up to speed on electric vehicles:

  • Wednesday, Aug. 14 at the Rifle Library, 5:30-7 p.m.
  • Wednesday, Aug. 21 at the Glenwood Springs Library, 5:30-7 p.m.
  • Wednesday, Aug. 28 at Carbondale’s Third Street Center, 5:30-7 p.m.
  • Wednesday, Sept. 18 at the Walking Mountains Sustainability Center in Avon, 5:30-7 p.m.

Learn about models on the market today, add up the local discounts offered for the Electric Vehicle Sales Event, pencil out state and federal tax credits, figure out EV charging, and meet current EV owners. Find out how an EV can work for you! 

Holy Cross Energy offers rebate for a Level 2 home charger

  • Holy Cross is offering its customers a ChargePoint Home Level 2 EV charger (up to two chargers if you have two EVs).
  • You hire the electrician to install the charger.
  • You can either pay your electrician for the installation, or have HCE cover your upfront costs and spread it over 3 years on your electric bill.
  • You have 60 days to install and activate your charger from the date you pick up the charger.

More details here.

Go Green with Alpine Bank 

Make your drive time greener by purchasing a more fuel-efficient vehicle. Choose any of the EV Sales Event discount vehicles and Alpine Bank will take 1/2 percent off your loan interest when you qualify for a loan. More details here.

The 2019 EV Sales Event is sponsored by